Permanent Trade Relations with China should also be granted and LDP eligibility of aflatoxin corn and grazing crops should be addressed. Congress should support ethanol as an oxygenate in gasoline, and the House and Senate should continue to conference on a crop insurance reform bill.

All that is certain is that there will be change, changes to farm programs in this vast Nation of ours are always needed to keep up with an ever-changing industry. Let's make some changes for the good.

Thank you for your time. Thank you for the opportunity to share our gratitude and our concerns in regards to your upcoming business on our behalf. We look forward to working you with you in any way that we can during this important process. Thank you.

[The prepared statement of Mr. Gilbreath appears at the conclusion of the hearing.]

The CHAIRMAN. Thank you.

Mr. Hitch.

STATEMENT OF PAUL H. HITCH, CHAIRMAN, TEXAS CATTLE FEEDERS ASSOCIATION

Mr. HITCH. Good morning, Chairman Combest, Mr. Stenholm, and members of the committee. My name is Paul Hitch, and I am here today as chairman of the Texas Cattle Feeders Association and as a rancher, cattle feeder, and grain producer from Guymon, OK. Our family corporation includes operations in Oklahoma and Kansas.

We appreciate the opportunity to provide our views on farm policy that affect the livelihood of our members. Few sectors of agriculture have been spared from low prices during the last several years. Cattle feeders in the seven major feeding States lost over $3 billion in equity during 1995 to 1999.

As you consider possible changes to current farm policy, we urge you to continue the two key concepts that we feel are embodied in the current FAIR Act. First, continue to minimize farm policy that distorts the competitive market system; second, implement no new programs that benefit one segment of agriculture at the expense of another segment.

TCFA supports reduced Government involvement in the production and marketing of agriculture commodities and we oppose Government supply management programs. Our experience in the volatile and cyclical cattle market has proven time and time again that the market provides the most efficient, although sometimes painful, signals to producers on what to produce and what not to produce.

So, what should Congress do to address the current agricultural crisis? TCFA urges Congress to aggressively pursue those additional elements of farm policy reform highlighted during the debate on the FAIR Act adoption.

First, stronger policy and financial support is needed to remove unfair trade barriers, open foreign markets, and increase exports of U.S. value-added agriculture commodities. Producers of most agriculture commodities will rely more and more on foreign markets for increased demand and therefore higher prices. Our competitors

continue to use subsidies to unfairly increase their exports and trade barriers to cheat U.S. producers out of important markets.

Mr. Chairman, we appreciate and applaud leadership efforts by you, Mr. Stenholm, and others to implement carousel retaliation in response to EU trade barriers. We also appreciate the committee's leadership in recent trade issues involving Canada and the northwest pilot project that has allowed 175,000 head of feeder cattle exports to Canada. And in keeping pressure on our neighbors to the south, to ensure that efforts by Mexican producers to close the border to U.S. beef are decided on sound science and fair trade policy rather than on politics.

We encourage the committee's continued support for full funding of the Market Access Program and the market development programs through third-party cooperators. Second, we need expanded efforts to reduce unfair and unproductive regulatory burdens on U.S. producers. Farmers, ranchers, and cattle feeders continue to face one regulatory burden after another.

We recognize the need for and support fair, cost-effective, and science-based regulations to ensure that we not only protect consumers and the environment, but do so in a cost-effective and economically viable manner. We are concerned that recent proposals such as EPA's AFO/CAFO and the TMDL programs forced upon many States exceed EPA's statutory authority and will significantly increase operating costs for producers without appreciable protection for the environment.

Mr. Chairman, we truly appreciate yours and the committee's strong oversight efforts with these and other EPA proposals. We encourage you to continue in hopes of avoiding a lengthy court battle between industry and EPA. On an another front, we also appreciate Congressional efforts to address tax inequities, especially efforts to eliminate death taxes.

Third, greater Federal investment in agricultural research is needed to increase efficiency and resolve environmental, food safety, cattle health, and other challenges faced by U.S. producers. Historically, one of our competitive advantages over foreign producers has been leading edge research and development programs supported by the Government and the private sector.

USDA must maintain the scientific expertise to protect producers from disparaging claims about the safety of our food and the quality of our environment. We applaud Congressional efforts to increase funding to help resolve food safety questions. We urge Congress to not only restore, but to increase funding for important environmental programs such as EQIP.

Mr. Chairman, turning to the issue of ensuring producer access to adequate risk management tools, TCFA supports governmental assistance, including supplemental payments for losses due to weather-related or other natural disasters. TCFA does not support federally subsidized revenue insurance for livestock because of the market distortions that result.

In summary, we would like for you to remove trade barriers, reduce regulatory burdens, invest in research, and don't subsidize revenue insurance for livestock.

I thank you for the opportunity to testify. I'll be glad to either answer or dodge any questions you may ask.

[The prepared statement of Mr. Hitch appears at the conclusion of the hearing.]

The CHAIRMAN. We appreciate your honesty, Mr. Hitch.

Mr. VonTungeln.

STATEMENT OF HENRY JO VONTUNGELN, OKLAHOMA FARM

BUREAU

Mr. VONTUNGELN. Thank you, Mr. Chairman and other honorable members of the committee. Good morning to you and a great opportunity you've given me to come here this morning and to participate in this exercise.

My name is Henry Jo VonTungeln, and I operate a wheat and stocker cattle farm near the town of El Reno, Oklahoma, and I'm here today representing the Oklahoma Farm Bureau.

I have several important issues that I would like to discuss today. First and foremost, I believe that in an effort to adequately review current Federal farm policy, we must re-examine the goals that Congress envisioned during the creation of Freedom to Farm. I believe a market-oriented, flexible, and non-intrusive Federal farm program is what Congress had in mind in 1996. Even in the light of many complaints that we've heard in the last 2 years, these terms still apply to the type of farm policy that best fits today's farmer and rancher.

I continue to support the flexibility contained in the 1996 FAIR Act. I do not, nor does the Oklahoma Farm Bureau, support a return to government supply management, including mandatory setasides, base acres, or production quota systems. However, if farmers and ranchers are to remain in business and sustain their livelihoods into the future, several changes in national farm policy need to occur.

The authors of Freedom to Farm sought to create policy in which farmers could receive a profit from the market rather than from Government payments. That philosophy seems to have been pushed aside over the last several years. With bad weather, poor prices, and a failing export market, agricultural producers have found themselves struggling to survive, as you well know.

Without the assistance provided by the Federal Government over the last 2 years, a number of producers would no longer be in the business. I want to thank each of the members of Congress who have come to the aid of producers throughout these tough times. I am sad to say that it appears inevitable that the farmers and ranchers will be in as much need for assistance in 2000 as in the previous 2 years. While direct and immediate assistance has been and continues to be extremely important, it is imperative that we not overlook the long-term changes that must occur for future generations of agricultural producers.

I believe that Permanent Normal Trading Relations with China must be a top priority of farm State representatives this session. We must establish a level of the agricultural exports as seen in the mid-1990's. China represents the largest and most viable growth market for agricultural goods.

The level of import tariff reductions achieved under the unilateral agreement for China's WTO entry is a major breakthrough for U.S. agricultural exports. I believe that the Chinese market will

prove to be a major consumer of U.S. wheat and beef supplies. Permanent NTR for China is a large piece of the international trade puzzle.

We must continue the cry to eliminate all unilateral trade sanctions. From the largest country to the smallest, agricultural producers should be afforded the opportunity to sell in every market around the world. History has taught us that the unilateral sanctions are an ineffective foreign policy tool. Elimination of the current unilateral sanctions on Cuba should be a top priority in the coming year.

Cuba will produce more than $200 million in agricultural products this year, and I have to ask what sense it makes to watch the French and Australians fill a market that lies less than 90 miles off our shore?

We must adequately fund and utilize the foreign access marketing programs that are at our disposal. If used effectively, these programs could have a major impact on creation of new international markets and for agricultural products.

Specifically, I want to ask for your attention to the continuation of full funding for the Market Access Program and the Foreign Market Development Program. These programs are utilized by nearly all exported commodities and will serve to create demand in the international market.

One immediate change that could be implemented during the 2000 growing season is the inclusion of the LDP payments for producers who choose to graze out their crop. I strongly urge the committee to support the provision contained in the Manager's Report Fiscal Year 2000 Appropriations Conference Report regarding in lieu of LDP payments for graze-out.

This language goes hand in hand with the philosophy of Freedom to Farm. Congress should make every effort to allow producers the flexibility to maximize revenue from their operations. During these times of extremely low prices, it seems imprudent to force producers to mechanically harvest a crop that can be used more effectively by grazing.

In conclusion, I want to thank the members of the committee for their efforts on behalf of the southern plains farmers in the area of agriculture research. And of special concern right now is the need for further research in the area of carbon sequestration, development of heat and drought, as well as disease and insect tolerant varieties. We know we can count on your continued support in this area.

Once again, I thank you for the opportunity to address these important issues and will be happy to answer any questions later. [The prepared statement of Mr. VonTungeln appears at the conclusion of the hearing.]

TheCHAIRMAN. Thank you very much.

Mr. Womack.

STATEMENT OF TOMMY WOMACK, PRESIDENT, TEXAS WHEAT PRODUCERS ASSOCIATION

Mr. WOMACK. Thank you, Mr. Chairman. Let me please begin by thanking the Honorable Chairman Larry Combest, the Honorable Ranking Member Charlie Stenholm, and other members of this

committee conducting these important field hearings. Your aggressive bipartisan hearings are greatly appreciated.

I am summarizing my testimony, and I would like to acknowledge also my Congressman, Mr. Thornberry. My name is Tommy Womack, and I currently serve as president of the Texas Wheat Producers Association and vice-president of the National Association of Wheat Growers.

I reside near Tulia, TX. My farming operation consists of raising cattle, producing wheat, milo, and cotton. I have farmed in Swisher County for over 30 years.

As you know, wheat producers across this Nation have suffered near record low prices. In addition to this, Texas, Oklahoma, New Mexico, and Kansas are currently experiencing severe drought conditions. These conditions put further stress on the overall farm economy.

We greatly appreciate the market loss payment that Congress has provided over the last 2 years. While this has not saved every farmer, it has extended the operation of many wheat producers who would have otherwise been forced off their land.

We are looking forward to the day when such assistance is not necessary, farmers can receive a fair price for their product. But, however, sadly to say, that day has not yet arrived. We are hopeful that we will be able to receive another assistance package even greater than the past year due to the current drought conditions, lower wheat prices, and higher fuel costs.

Some have blamed the 1996 farm bill for low wheat prices. But for the past years, Canada, Argentina, and Europe have had excellent weather, flooding the marketplace with higher wheat yields. While in the United States, a good economy and a strong dollar, the wheat producer has found themselves even holding a larger than average, near one point billion bushels of wheat in the United States, increasing price declines even further.

Texas wheat producers support the Freedom to Farm bill but it needs some changes. First, the Texas wheat producers believe that Congress must take immediate action to improve the safety net to protect farmers against low prices, disasters, helping them with tax reform, reliable crop insurance, and open international markets free of U.S. unilateral sanctions.

And, second, Texas wheat producers believe Congress should step up and increase USDA farm program baseline by doubling the AMTA payment and limits at the remainder of the 1999 farm level. Third, Texas wheat producers believe Congress should pass permanent normal trade relations with China. We producers have worked hard to overcome China's sanitary and phytosanitary concerns. It is time to grant China access to WTO normal trade relations and market assistance programs.

Fourth, Texas wheat producers believe that we must add a counter-cyclical program within the Freedom to Farm bill that wheat farmers can live with like cost of production.

On behalf of the Texas Wheat Producers and the National Association of Wheat Growers, this great Nation thanks you, and I thank you for your leadership and your concerns, for the future of agriculture depends on you. God bless you and thank you.