Another way to state this is we're very proud to live on a century farm in western Iowa that has in three generations, six four-year bachelor's degrees with two more in progress; a master's degree with another one of those in progress. In Iowa we have 25 percent of the class 1 and 2 land in the world based on the NRCS classifications. On these soils, as Secretary Judge indicated, we produce 17 to 20 percent of the corn and beans in the U.S. Besides the soils, we have the climate to support it and the people with the expertise to manage this renewable resource to its best advantage. Agriculture is being measured by some policy and trade people by using income as a measure of its economic importance at a time when 20 to 80 percent of the capital investment of some of our counties in Iowa and the surrounding states are generating negative income. That capital investment is (inaudible) land. An income measure of economic importance leads evaluators to conclude that agriculture is of no consequence. A capital investment measure of agriculture in Iowa and surrounding states shows an important asset in terrible financial distress. Agriculture is dealing with many deterrents such as monetary policy which generates low exports with a high-value dollar, increased interest rates which increased production costs, exclamation mark. Selling our production on a minimum-cost basis to corporations that process and resell our production on a value basis. Only their advantage is not passed through. And a price discovery system that may erroneously suggest that trading 25 times the annual production of the commodity is beneficial to the income of the producer of that commodity.

Price for cash corn was 5.15 per bushel July 12th, 1996 in Coon Rapids, Iowa. September 11th, 26 months later, it is $1.49 a bushel. This morning cash corn is $1.43. Mr. Secretary, this is like the Dow Jones Industrial Average showing a decline from a high around 11,500 points to 3220 points in 26 months with all signs headed lower. Perhaps the best investment if this occurred would be more (inaudible). But the old economic rule of thumb still applies that as agriculture goes, so goes the general economy. The general economy should not be feeling secure about its future.

In 1996, seven years of agricultural programs and ag trade policy were based on what looks like a one-year anomaly of financial fantastically increased exports of grain to China and Southeast Asia, the amounts of which haven't occurred before or since. Congress needs to revisit these assumptions made in 1996 just as ag producers are being asked by lenders to reassess their financial plans on 1996 assumptions.

The negative income and negative network consequences of these decisions are now having their effect. Even with the advance of FSA loan payments for one year, cash flow schedules are still negative. Is FSA willing or statutorily able to do this again next year? The National Commission on Small Farms Study from the USDA indicates that in an occupation that works with the unpredictability of bulls that may weigh up to 3,000 pounds or transfer of tractors up to 400 horsepower, handling hazardous materials, and the general stress of timeliness of planting and harvest and other unchangeable biological limitations, suicide seems to be the main cause of death.

The social cost of land transfer through bankruptcy rather than land transfer through positive income are very high. Senator Conrad, proposing a new approach to U.S. ag policy indicates that European Union farmers are receiving government price work up to 10 times of the level of the U.S., and they are writing for more. The U.S. producer is facing huge deficits in net income that transfers his net worth to some of the largest corporations in the world to keep the prosperity of our economy sustained. So far U.S. farmers have received an 80 percent drop in price support levels plus criticism from their government for not managing agricultural assets to a better advantage. Projections of $1.70 bushel December border trade prices for corn on a harvest basis of up to 80 cents a bushel can be incurred on wheat in Illinois and Indiana during the current wheat harvest suggests an income level so low for corn and soybeans this fall, it will not meet crop input costs. Without help, machinery costs, labor costs, and land cost will not be met at any end.

It's hard to separate trade policy and ag policy because of the fact that ag policy rules and funding dictate what trade policy will become (inaudible). Advantageous trade is profitable trade for the producers and commodity involved. Presently we are trying to export commodities that are generating negative income for the producer and the importer as in the case of beans each way in Brazil. But not the trade income. The trade income profit doesn't add up to the comparative advantage for all parties involved.

To level the playing field, ag negotiators need continuing education and course training in 101. We have already given away the store, and other negotiations where U.S. farmers gave up around 80 percent of government support they were receiving and got nothing in concessions from the Europeans and other countries except continuing support for their own producers at sometimes increasing levels. Then the ERSOM (inaudible) indicates that U.S. producer is not competitive.

MR. BLOUIN: We need to wrap it up.

MR. BRUTSCHE: This assessment is wearing thin at farmer commodity shops around Iowa where "fair" is recognized as a bad four-letter word. Mr. Secretary, the general economic conditions of the U.S.A. from a producer's standpoint suggests using a good four-letter word, "help". Thank you.