The CHAIRMAN. Mr. Moran.

OPENING STATEMENT OF HON. JERRY MORAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF KANSAS

Mr. MORAN. Mr. Chairman, thank you.

I appreciate the opportunity of being here and I'm only able to do that because you have given us the opportunity to hear from farmers across the country.

And this is certainly my first time in this part of California. I have a probably standardized picture of what agriculture is, wheat, cattle, and corn, back in Kansas, and it's been a great opportunity for me to learn more about how diverse agriculture is, although our problems seem to very similar.

I also want to thank Mr. Ose for allowing us to be in his district and for the leadership that he's provided and the House Agriculture Committee as we've tried to figure out how to keep farmers farming and the next generation of farmers alive and well in American agriculture.

So, Mr. Chairman, thank you for this opportunity and I look forward to hearing from those who are going to testify today. The CHAIRMAN. Mr. Simpson.

OPENING STATEMENT OF MICHAEL K. SIMPSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF IDAHO Mr. SIMPSON. Mr. Chairman, I just want to thank you also for holding this hearing and look forward to listening to the witnesses testify today. It is amazing, as Mr. Ose said, that the diversity that is within this district and within the State of California. When I look at the people that are going to testify today and the different subjects and crops we are going to hear about, not a lot of these are growing in southern Idaho; I don't see anything about potatoes but I look forward to hearing the testimony from all of these different producers and the types of crops they raise and learning more about it.

So, thank you, Mr. Chairman.

The CHAIRMAN. I'll just say, having seen this area for the last 24 hours, if they decide they want to grow potatoes down here, Mr. Simpson, they're going to grow potatoes down here.

Mr. SIMPSON. Mr. Chairman, that is a concern of mine.

The CHAIRMAN. Some of you may have noticed, in our opening statements, that Mr. Stenholm talks a little differently than some of you do out here; and I talk like Mr. Stenholm does. So, I want to apologize initially before we start if I mispronounce any of your names or mispronounce the names of some of the communities that you're from. I think I understand how to say "Stockton;" but I will apologize up front. This is kind of the way we would pronounce it down in Texas. And, as long as you know who you are, that's going to be the main thing.

We would, with that, call our first panel of witnesses to the table. Mr. Jeff Colombini, who is a tree fruit grower from Stockton, CA; Mr. Michael George, who is a fruit and vegetable producer from Exeter, CA; Mr. John Giovannetti, who is a fruit and vegetable producer from Yolo, CA; Mr. Dana Merrill, who is a grape grower from

Paso Robles, CA; and Mr. David Weiss, who is a pear and wine grape producer from Kelseyville, California.

Gentlemen, thank you very much for attending today. We will take your testimony in the order of the way that you were introduced.

Mr. Colombini, please proceed.

STATEMENT OF JEFF COLOMBINI, TREE FRUIT GROWER, STOCKTON, CA

Mr. COLOMBINI. Thank you, Mr. Chairman.

Dear Mr. Chairman, members of the committee, my name is Jeff Colombini and I am a tree fruit grower in Congressman Pombo's district.

In addition to farming cherries, apples, walnuts, and wine grapes, I also serve as chairman of the California Cherry Advisory Board.

As a private grower and through my work with the Advisory Board, I have worked to help the industry open new export markets for our products.

I know first hand that the fiscal health of the California cherry industry depends upon a viable open food system. From 1992 to 1999, on average, 53 percent of California's cherry production was exported. The value of our 1999 export crop was $43 million. Of that which was exported, 20 percent went to Japan, our largest export market in 1999. Other important export markets include Taiwan, Hong Kong, Canada, and the United Kingdom.

Because of the assistance we have received from the U.S. Department of Agriculture and the U.S. Trade Representative's office, in recent years we have also been able to begin developing markets in Mexico, China, and Australia.

If the committee remembers only one message from my testimony here today, it is that trade is not a luxury for the California cherry industry, it is not a bonus that helps us be a little more profitable. The California cherry industry is integrated into the world food system and we need the support of our Congressional representatives and the U.S. administration to ensure that the global food system remains open.

In addition to this general message, in the short time we have, I would like to make six quick points. The first is that funding for the Animal Plant Health Inspection Service's international programs and export trade support teams need to be sufficient to ensure that we have, one, an adequate number of negotiators; two, that these negotiators have the administrative and scientific support that they need to eliminate foreign trade barriers; and three, funding for travel and proficient translators.

While there have been improvements in recent years, APHIS, with the exception of its overseas international services staff, still has only about nine or 10 people assigned to cover all quarantine trade issues worldwide. For the most part, the world is divided into three parts and two people are assigned to each part. This means that two APHIS negotiators are responsible for plant quarantine talks and negotiations in Asia. In some cases, they return from talks with one country with barely enough time to prepare for talks

at the next; and then, with their absence while traveling, some works have not received appropriate attention.

As I mentioned, staffing levels have increased in recent years but this is an area where minimal investment could yield significant and real returns to U.S. agricultural exporters. A strong APHIS is critical to U.S. agricultural exports, especially when so many of our agricultural trade barriers are non-tariff based. The agency must be adequately funded, preferably by mandatory, as opposed to discretionary, funds.

Second, it is very important that this committee ensure that the U.S. Congress and administration avoid any action that could jeopardize the integrity of the WTO's Sanitary and Phytosanitary Agreement. This means that the United States should ensure that its import policies be based only on sufficient and sound science. and not allow protectionist pressures to abuse our phytosanitary policies. It also means that the United States should resist any attempts by the European Union and other countries to revisit this agreement in the upcoming WTO talks.

The California cherry industry has already benefited from this agreement. Because of a WTO case, new varieties of California cherries will be more easily shipped to Japan; and other countries that have restricted the entry of California cherries, such as Korea, are now reconsidering their positions given their new multilateral obligations.

Third, the United States needs to ensure it is providing adequate support for the Codex Alimentarius and other international standards-setting organizations. It is useless for the United States to encourage its trading partners to defer to these international standards if the organizations do not have the resources necessary to develop standards for many of the new products and technologies that are becoming available to growers.

Developing a sound-based international standard for new inputs and technologies is far preferable to having each country setting its own standard and ending up with a disconnected system that unintentionally inhibits the open and free movement of food. For this reason, it is important that the United States ensure that these standards-setting bodies have the funds they need to conduct the research, evaluations, and risk assessments needed to recommend international standards for emerging agricultural inputs and technologies.

Fourth, in the course of the WTO talks, we need to ensure that European production and export and subsidies are eliminated, not only because they inhibit our ability to export to Europe, but because they provide the Europeans with an unfair competitive advantage in third markets such as the Middle East, India, and other parts of Asia.

Fifth, I would encourage the committee to maintain strong support for the agricultural research and other green box activities such as the Market Access Program. As I mentioned in my opening remarks, recently, because of support received from the U.S. Department of Agriculture and the U.S. Trade Representative's office, the California cherry industry was successful in opening new markets in Mexico, Australia, and China. The opening of these markets was made possible because of agricultural research and these new

markets are being developed with MAP funding for generic marketing efforts. Combining research with policy-level attention allows markets to open; and following a market opening with strong generic marketing program allows new export markets to be created. This provides for increased U.S. exports. That, Mr. Chairman, should be our primary goal.

On a related note, for several years, the horticultural sector has been requesting an increase in USDA's Market Access Program budget from its current level of $90 million. A recent proposal by the administration would utilize at least part of the unused $500 million in Export Enhancement Program budget, slated for wheat and barley subsidies, to be used to increase the MAP budget.

I respectfully ask the committee to support this important green box request as it will help U.S. growers compete more effectively in international markets.

Finally, a quick word on the China permanent normal trade relations vote. I cannot stress enough the importance of passing PNTR for China to U.S. agriculture. China's market potential for U.S. agricultural commodities is enormous. In our industry, as a relatively new market, we shipped 10,000 18-pound boxes of cherries between 1998 and 1999, but that number is expected to jump significantly once the current 30-percent tariff falls.

In the November WTO agreement, China agreed to lower the tariff to 10 percent by 2004 once it joins the WTO. This significant reduction will eventually mean millions of dollars in revenue for California cherries. Unfortunately, the tariff concessions to which China agreed will be lost if PNTR is not passed. China is too important a market, not only for cherries but for all of U.S. agriculture, to let this opportunity slip away.

I encourage you and members of this committee to consider the issues I have mentioned today when you are developing our Nation's agricultural policy.

Thank you.

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

The CHAIRMAN. Mr. George.

STATEMENT OF MICHAEL D. GEORGE, FRUIT AND VEGETABLE
PRODUCER, EXETER, CA

Mr. GEORGE. Thank you, Mr. Chairman. Good morning ladies and gentlemen.

My name is Mike George; I'm a 40-acre citrus producer from Lindsay, CA. In addition to my own ranch, I'm general manager for Griffith Farms and provide oversight to 2,400 acres of citrus and other permanent crops. I serve as a director for California Citrus Mutual, a citrus producers' trade organization; this year, I serve as vice chair.

The first issue I wish to touch upon is trade. Fair trade is the issue and the subsequent societal impacts resulting from a phytosanitary program in dire need of improvement. It's real easy to talk about fair trade because everybody is for it. But, do we walk the talk or turn a cheek to satisfy the State Department or the business concerns of other countries?

Let's be specific. Since the Uruguay Round of Trade Talks, a significant increase in the amount of subsidies paid to European Union member producers has occurred. According to the WTO for the marketing year 1996-97, the European citrus industry received in excess of $1.2 billion to assist in the production and marketing of oranges, lemons, and other citrus varieties.

These figures were derived from EU member countries and I have to believe the actual dollar assistance is greater. We're powerless to do anything about it since this administration agreed to a "peace clause" which prevents our Government from filing a complaint against these alleged domestic subsidies. Ever since I've been in the citrus industry, I've been told that we don't export to Europe because we can't compete. I would submit that we can't penetrate that market because my personal checking account can't compete with $1.2 billion in subsidies.

Furthermore, that type of assistance enables the EU citrus industry to be a more formidable competitor in other foreign markets. From my perspective, that is not fair trade.

How does our administration respond to this concern? The stock answer is that these are domestic programs and are not subject to Uruguay Round proceedings. I would argue that this distinction is simply a verbal tap-dance to satisfy the U.S. Trade Representative and the State Department. This distinction does not exist in the marketplace.

The EU assistance programs keeps me from competing in Europe and allows their industry to be more formidable competition in the United States and other ports of call.

A second component of concern related to trade is the tremendous strain from the influx of imports and increased consumer travel is placing on our borders and our pest and disease defenses. This Nation is being overrun by exotic-sounding problems, karnel bunt, medfly, PlumČot, canker, fire ants, Chinese long-horned beetles, Pierce's disease, and the list goes on. These are costing individuals and communities losses in terms of dollars, while creating environmental impacts because of eradication programs.

We are being penny-wise and pound-foolish. Give USDA/APHIS/ PPQ the tools to do a more efficient job. There is a reason why the President issued the Invasive Species Executive order last year. It is because the impacts of these infestations are too huge to ignore. In the upcoming farm bill, Congress will discuss a renewal of a clause that allocates user fees to USDA/APHIS.

Historically, Congress has appropriated less than collected and pigeonholed the remaining dollars for purposes unrelated to pest prevention. Remove that archaic compromise and allow APHIS to use those dollars for which they were intended, pest and disease prevention. This does not impact the general fund and it allows the user fees to be directed towards their intended purpose.

My written testimony offers comments on the crop insurance program. In the interest of time, I'm omitting them; however, I hope that you will take the time to read them.

Finally, I would like to ask this committee to go back to the Plant Quarantine Act of 1912 and use it for the future. In 1912, Congress determined that USDA shall protect domestic agriculture. We believe there has been an erosion of that mission.