VIEWPOINT
Congress addresses issues of consolidation, trade with China
By Don Copenhaver, MFA Incorporated President and CEO
At the annual Washington, D.C., conference of the National Council of Farmer Cooperatives in early June, the legislative committee of the MFA Incorporated Board of Directors heard from members of Congress as well as members of the Clinton Administration. The legislative committee, chosen by MFA Incorporated's corporate board, includes Keith Schnarre of Centralia, Mo., chairman of the corporate board, District 6; David Cottrill of Albany, Mo., vice chairman, District 1; Ron Heins, Concordia Mo., District 5; Frank Samek, Bolivar, Mo., District 11; and me.
Believe me, this annual pilgrimage is not a vacation; it's a chore. Packing up and heading to Washington, D.C., to interact with political leaders is not a good way to spend three days in June; it is, however, necessary. Every year, NCFC holds this conference to allow those of us in farmer cooperatives to speak with and listen to our political leaders. During parts of the general session, we heard from Senate Majority Leader Trent Lott (R-MS), Secretary of Agriculture Dan Glickman and a number of senators and representatives.
In addition, the legislative committee and I also made eight non-partisan visits to members of the Missouri delegation. Our mission was to talk with everyone who stands to have influence on agricultural issues. We visited with John Ashcroft and Kit Bond in the Senate and Roy Blunt, Pat Danner, Jo Ann Emerson, Kenny Hulshof, Ike Skelton and Jim Talent in the House.
Several issues surfaced as topics of conversation, both in the NCFC conference and in our meetings with the Missouri delegation. The topics include concentration in agriculture and Permanent Normal Trade Relations (PNTR) with China. Concentration is one of those topics that always seems to draw much heat and little light. Passions run deep. Senators Chuck Grassley (R-IA) and Tom Daschle (D-SD) have concerns that the U.S. Department of Justice is ignoring concentration in agriculture. They spoke of their concerns that current laws are not sufficient to address today's agricultural marketplace.
I share their concerns. As you'd expect, we at your cooperative benefit from a wide variety of buyers and sellers. But my inherent distrust of constantly increasing the size of government was raised by the solutions they proposed. They want to create another division within the Department of Agriculture to oversee agriculture and approve mergers. I agree that consolidation is a concern that people in agriculture and government should take seriously. But after hearing that the two senators also want oversight of mergers between cooperatives, I have to strongly disagree.
First of all, I don't understand their intention in terms of cooperatives. Cooperatives have farmer boards who oversee the cooperative. In addition, it takes two-thirds of the members of the cooperative to decide whether or not the cooperative should merge with another cooperative. If two-thirds of the farmers served by each cooperative agree that the merger is a good idea, why in the world would the U.S. Department of Agriculture have a say in the matter? Just this past winter we saw how the cooperative system works in that respect when the members of Cenex and Farmland voted not to merge. It looks to me like the current system works. Government is not needed, thank you very much, and would do nothing but create bureaucratic messes and the always-ballooning costs.
In terms of trade with China, I can see no down side to the issue. Yet several members on the House side mentioned they had taken a number of calls from irate farmers. We assured them many people in agriculture support the issue. We already allow China unfettered access to our markets. Why wouldn't we want access to theirs? That's what PNTR is all about. The U.S. House of Representatives passed the issue early this summer. By the time this magazine is printed, the U.S. Senate should have voted on China trade. I hope they will pass it. The agreement lowers tariffs on U.S. agricultural products, eliminates China's State Trading Entities and accepts USDA inspection standards as equal to its own.
China, with a population of 1.2 billion people, is home to one out of every five humans. It has a rapidly growing middle class and an economy that is growing at the rate of 7 to 10 percent a year. All of the mainstream agricultural organizations from the Corn Growers to Farm Bureau to the National Cattlemen's Beef Association are urging Congress to pass PNTR with China. The Chinese people have enormous appetites for U.S. products. True, their incomes do not allow tremendous purchases individually. But taken as a whole, small gains in per capita consumption add up to tremendous national statistics. As the Cattlemen point out, an annual 2.2-pound per capita increase in beef consumption in China totals 2.64 BILLION pounds in U.S. export expansion. That's more than the total of all 1999 U.S. beef exports. China poses a tremendous opportunity for U.S. farmers. That's why all of the former U.S. Secretaries of Agriculture (both Republican and Democrat) support it. We should too.