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Schafer addresses farm bill, Canadian BSE and Cuban trade
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| Ed Schafer, USDA secretary |
There has been no shortage of problems or concerns to face for the U.S. Department of Agriculture's new secretary, Ed Schafer.
Since taking office in January, Schafer, the former governor of North Dakota, has been thrust into the middle of negotiations for the new farm bill, has had to address a massive meat recall in response to poor handling at a plant in California, and has been asked to respond to the latest announcement of another case of bovine spongiform encephalopathy in Canada, to name a few.
Recently, Minnesota Farm Guide was able to visit with Schafer via telephone while he participated in the National Farmers Union annual convention in Las Vegas. In this interview, Schafer talked about the ongoing negotiations on the farm bill, USDA's response to the latest BSE case in Canada, trade relations with Cuba, and about implementing Country of Origin Labeling.
PS: In regards to the farm bill - what do you think the chances are of getting a new farm bill passed by the March 15 deadline?
Schafer: I think the chances of getting one passed by the March 15 deadline are limited. There are so many details and conference sessions that have to take place that physically, you just couldn't get the work done. But I'm confident that we'll have an agreed upon framework in place and the work will be accomplished.
If we're in the midst of detail work and paragraph generation and things like that, then I think we can extend (negotiations) for a short period of time. If you look historically, the farm bill has been signed in April or around there and that would not be unusual.
PS: If a new bill isn't completed by that time, and it doesn't appear that it will, would you favor an extension of the current farm bill, or reverting back to the 1949 bill?
Schafer: Neither one of them are good options. If you look at the impact of going back to permanent law, which includes 1936 in some cases, and 1949, it's just not going to happen. Milk prices have tripled. You've got a lot of other commodity issues that take place - if you don't have allotted acreage you wouldn't get any subsidy programs. No representative of the people who is doing their job is going to allow that to happen. So, that we're not even considering.
If you look at extending the current legislation, that's not a good option either. The problem you have is - the '08 crop is in, you'd have to go through the '09 crop, so you're talking about two years of extension at a minimum, probably. And you look at leaving behind nutrition increases; you've got increased participation and higher prices in school lunch programs and nutrition assistance programs; you drop support for specialty crops; you drop support for conservation programs. And, importantly, you drop support for the energy issues, and you know, we're seeing big progress in the merging of energy in agriculture and that would get put on hold for a couple years. Extending this bill is just not a good idea.
PS: Can a permanent disaster element be part of a successful farm bill that won't be vetoed by the President?
Schafer: I think the President's been very clear that he wants to see a safety program in the legislation. What shape that safety net legislation is going to take, we don't know yet. But he's been adamant of saying no permanent disaster declaration. That's been driven by the fact that that $5 billion, or depending on your score it could be $6.5 billion - it's a big pot of money that's above and beyond the baseline increase that they have already. The spending issues here are what's driving that conversation.
The President wants a safety net program out there and will sign legislation with a good safety net program in place. Whether in the end we're going to see a permanent disaster title or we're going to see an increase in safety net programs or (something) other, for instance, as Chairman Collin Peterson has suggested... You know there are just other ways of doing it and we don't know what that final form is going to take yet.
PS: The administration has recently altered its farm program payment cap position, saying now the Adjusted Gross Income limitation must be lowered and include a hard cap at no more than $500,000. Originally it proposed an Adjusted Gross Income of $200,000. Why the change?
Schafer: It's an effort to understand some of the issues out there in that Adjusted Gross Income cap for a high valued producer in some areas of the country where you have some different input considerations, etc.
When we were looking at this last week, the administration said we need to move forward. We're trying to compromise, we're trying to come up with ways to get this farm bill on the table because the President wants to sign a new farm bill this year, so we tried to make some movement to allow that to happen.
PS: In the latest House proposal, part of the funding for the bill comes from tax enforcements that were included in the President's budget, but the President has said that isn't acceptable. Why not?
Schafer: The President, as you know, has set course for the budgets to provide a balanced budget by the year 2012. In identifying funding sources in an effort to get to that target... if we identify funding sources and continue to increase spending to increase the size and scope of government we're not going to make the goal.
PS: Do you still plan on having Country of Origin Labeling implemented by Oct. 1?
Schafer: USDA will be prepared to implement on Oct. 1. That's a policy that's driven by the Legislative Branch. It's been on hold and up and down and whatever. We've missed a couple of the rule making publishing deadlines, but we'll be in a position to have interim guidelines in place, which have the force of the guidelines, and we'll be prepared to implement Country of Origin Labeling come Oct. 1 should the Legislative Branch still allow us to do so.
PS: Canada recently announced another case of BSE (mad cow), which is its seventh since its feed ban was put into effect in 1997. It appears that policy isn't working out as they had hoped as there have been more cases of BSE after the feed ban than before.
- Do you feel this poses a significant threat to the U.S. cattle industry?
- What, if any changes, will USDA make to its OTM rule as a result of this latest finding?
- Do you feel it's appropriate that Canada and the U.S. both have a “controlled risk” designation?
Schafer: As far as you mention - ‘it appears not to be working' - actually, I think it is working, with their national ID system up there... and no designation says that you have totally no cases of BSE. As a matter of fact we know Canada has them and that's why they got the limited risk designation as a nation because the incidences is very small.
The fact that it was found, identified, contained, and did not enter the meat supply nor did it go out and get exported into the U.S. as a live animal, either way the process worked. So I would contend that the rules do make a difference, that we have started to identify the cases. And, of course, they're getting identified because we're doing testing of millions of animals instead of not even being aware of it before. So, in that case, I think the system has worked well.
As far as should the U.S. and Canada both be limited risk, the answer is yes. The limited risk designation doesn't say it's BSE-free, it says there is a limited risk of it and at the same, it's measures are in place so that it will not infect herds. We are convinced that the isolated incidences of BSE in Canada do not pose a threat or risk to the beef industry in the United States.
That leads us to the third (question) - what changes may be made - I don't anticipate that any are needed nor will be.
PS: You're well aware of the efforts put forth by the state of North Dakota to have more open trade with Cuba. In fact a North Dakota trade delegation recently completed another trade mission there. Even with the resignation of Fidel Castro the administration has said it will continue its trade embargo. Do you feel this policy has been successful?
Schafer: There are so many factors involved, the least of which is agriculture.
What we do know is that the policies of the Castro regime, including his brother, Raoul, have lent themselves to people living in poverty, to no new investments in infrastructure, to the policies that lent themselves to putting a society on hold from the 1950s with a do nothing attitude there. All those things are involved in the Cuban crisis, if you want to call it that.
The good news is agricultural imports to Cuba have been increasing. While we are limited to cash sales, the pure thing is the people need the food, (and) they can't generate it on their own. We've been very pleased to see the progress of Roger Johnson and Jack Dalrymple's efforts to go down there to open up the border because our imports are increasing to Cuba as they are on a national basis as well.
So if the real issue is can we import more down there, we are doing so. Has it been an effective containment policy, diplomatically and politically down there, I don't know.
PS: What is the difference between trading with Communist China and North Korea as compared to Cuba?
Schafer: The one difference that I can see having been in China, I have not been in Cuba, but the one difference I can see, in China the government policies are allowing a huge emergence of the middle class. People have more disposable income; they're getting better jobs; they're getting paid better; they're getting their own homes; they're moving into a more capitalistic society and away from the central control Communistic society.
That's what we feel, appropriately, is moving in the right direction - eventually giving people rights and opportunity and financial gain on their own without the government. That's not happening in Cuba. That community has been on hold. The middle class isn't emerging, it's decreasing - more people on poverty, more problems with infrastructure, more lessening of business influence. There just isn't anything happening down in Cuba, so I think that's a difference. But I'm sympathetic to the argument of how you can deal with one dictator and not another.
But if you look at the influences of the marketplace in society and the communities, they're different in China than they are in Cuba.
PS: Do you offer ideas or suggestions to the President regarding farm policy?
Schafer: You know, I've been really pleased with that. He's engaged in the farm bill issue, of course he comes from an agriculture state. And both of us being governors, had to deal with agriculture issues as it affects the communities and the economy. So he's engaged and he's very willing. When I met with him face to face on the issue, he'll ask “how about this?”
As a matter of fact, I was kind of shocked the first time I got the phone call from him through the White House operator asking me my opinion on something. That was pretty interesting.
PS: What experience from being governor of North Dakota most helps you with your position as Secretary of Agriculture?
Schafer: It's been immensely beneficial. As a matter of fact, I was telling somebody the other day I think they ought to have a requirement for all (candidates for) cabinet agencies to have been a governor first. You get a broad range perspective of operating agencies that have different missions and different viewpoints and lots of people...and trying to move it all in the right direction.
Having been a governor where you have the same...a secretary of agriculture has a whole bunch of agencies and the governor has a cabinet...I mean it's very valuable - understanding budgets, the legislative process, going through the administration policies, motivating people, responding to your customers, which is your citizens, all of that is just a thrill for me to have the background to do it.
