To the Annual Convention of the 
Independent Cattlemen of Texas

It is an honor and pleasure for me to be with you today at your annual meeting to share some thoughts I have concerning the public policy issues facing U.S. farmers and ranchers, and particularly some of the challenges that face independent cattlemen in Texas and across our great country.

The Texas Farmers Union and our national organization have a long history, which began over 100 years ago right here, in the State of Texas, of representing the interests of family farmers and ranchers. Our mission is to help ensure their importance to our economy and to the social and moral fabric of our communities is not overshadowed by the narrow interests of others.

For independent livestock producers a number of important issues that Farmers Union has been advocating for a long, long time are now at the forefront of the public policy debate in Washington, DC and across the nation. These include country of origin labeling, food safety, the effects of greater market concentration and trade. I would like to spend a few minutes discussing these with you today.

COUNTRY OF ORIGIN LABELING -

After more than a decade of discussion, debate and study, Farmers Union and other supporters were finally able to include provisions in the 2002 farm bill to implement mandatory country of origin labeling for a broad range of retail animal and crop products sold to consumers beginning September 30, 2004. The statute provides definitions, conditions, verification models and penalties that are to form the basis for USDA's implementation of the law.

Country of origin labeling is not a new phenomenon in the United States. A large number of consumer goods, including many retail-ready food products, are already labeled as to their country of origin. The labeling law also does not violate our international trade agreement commitments in that it does not impose any additional restriction in the form of tariffs, quotas or non-tariff barriers to imports and the labeling requirements apply to both domestic and imported commodities.

Unfortunately, many processors, retailers and even farm organizations that purport to represent actual producers have decided to oppose the law rather than work for a reasonable approach to make it an effective tool for producers. They are also ignoring numerous surveys and polls that indicate consumers overwhelmingly support country of origin labeling and will pay market premium for U.S. products because labeling provides additional product information, increases consumer choice and fulfills a desire to support American agriculture and industry.

We believe country of origin labeling provides U.S. producers with a powerful marketing tool by allowing them to differentiate their products in the marketplace. This is really no different than the retail product marketing used by processors and retailers when they label or brand products as a means to gain product acceptance and loyalty and increase their share of the market.

While debate over the merits of the law continues, country of origin labeling for the listed agricultural products was approved by Congress and agreed to by President Bush. It is the law of the land. We should be focused on the development of the rules and regulations to allow for the law's implementation in the most efficient and least burdensome manner possible in a way that provides accurate and appropriate information to consumers while minimizing the cost and potential liability for producers, processors and retailers. However, the law remains under attack, and this week the House Agriculture Appropriations Subcommittee took action, that if ultimately adopted, would eliminate its application to livestock and livestock products.

The Texas Farmers Union believes the implementation challenges can most easily be met by 1) adapting the requirements of existing programs that require country of origin labeling to the new law. 2) Extending the country of origin information already collected on imported agricultural products, which represents a small portion of the total product volume subject to the act, through the U.S. processing, distribution and marketing system. And, 3) allowing maximum flexibility in adapting existing record keeping and verification information to the audit provisions of the law.

FOOD SAFETY -

The discovery of BSE in Canada, potential threat of bio-terrorism and the increase in reported food-borne illness and products recalls have increased the level of concern about the safety of the U.S. food supply In the U.S., however, we fortunately have not experienced the same level of threats to our food safety that have occurred in Europe and elsewhere. We either have a far superior system for inspection and control, a less concerned consuming public or we have been extremely lucky. I suspect it is a combination of all three.

While country of origin labeling does not create additional food safety assurances, it does provide consumers with knowledge they can use to make more informed food purchase decisions.

The level of food imports continues to increase and food processors and retailers have extended their level of integration from commodity production to table-ready goods in order to maximize their profitability and market power. We must increase our capacity to inspect, test and regulate all sectors of the food industry if a potential food safety disaster is to be avoided and consumer confidence is to be maintained.

CONCENTRATION -

In addition to the impact on consumers, the level of vertical and horizontal integration within the food processing and retailing industries poses a real threat to independent producers in terms of market options, fairness, transparency and pricing.

The National Farmers Union has taken the lead in providing education about the concentration of market power throughout the input supply, processing and retailing sectors of agriculture through a series of U.S. market studies that was initiated in 1999. In cooperation with the International Federation of Agriculture Producers, IFAP, we are now beginning to focus on the level of concentration in a global context.

Domestically, the awareness we are creating is leading to broader support for new policy initiatives to begin addressing the negative effects of concentration on livestock and other agricultural producers. Country of origin labeling represents one step in the process by providing U.S. producers a way to have their products identified in the market place. NFU has been at the forefront in seeking to strengthen the enforcement of our antitrust laws and the Packers and Stockyards Act. We are seeking to expand the rights of contract producers beyond the initial efforts that were included in the recent farm bill. In addition, we are actively supporting legislation to limit the ability of large packers to own livestock that directly compete with the animals of independent producers and can be used to manipulate market prices.

TRADE -

There can be no question that all agricultural producers must now function in an increasingly global economy. Trade is an important component of the U.S. agricultural economy. However, I believe we must be vigilant in our attempts to ensure that agricultural trade and the trade rules established through the WTO, NAFTA and all the bilateral Free Trade Agreements under consideration currently, are fair and produce results that are beneficial to agricultural producers.

At the same time, I reject the notion of the free trade advocates that prosperity for farmers and ranchers will be just around the corner if only we eliminate farm subsidies and all forms of border protection.

The trade agenda of the U.S. is a large undertaking that covers a wide range of issues. Unfortunately, it continues to appear that issues important to production agriculture are, at best, secondary considerations to the wishes of other economic sectors and to our own foreign policy objectives.

Why else would we be so aggressively seeking a free trade agreement with Australia. This is a country that is a surplus agricultural producer and one of our major agricultural competitors. It offers little, if anything, in the way of new agriculture markets for U.S. producers while posing an even more serious threat to our domestic cattle market through imports.

NFU has strenuously opposed the U.S. - Australia FTA negotiation. We will oppose other trade agreements that fail to enhance the ability of U.S. farmers and ranchers to obtain reasonable prices for their commodities and continue to erode our agricultural trade balance.

Let me conclude by emphasizing that the Farmers Union is aggressively pursuing a public policy agenda that will be beneficial for independent livestock producers and all the nation's family farmers and ranchers. We look forward to working with you in every possible way to achieve our common goals not just for our members, but for our whole nation.

Thank you for the opportunity to participate in you annual convention.

Texas Farmers Union, P.O. Box 738, Sweetwater, Tx 79556