Thank you, Mr. Christ. Our next speaker this morning is David Livingston of the Family Dairies USA and he will be followed by Mark Mosio. Thank you.

MR. LIVINGSTON:

Good morning. I am David Livingston, Vice-President of Family Dairies USA and a dairy farmer from Dodge Center, Minnesota. I want to thank Secretary Glickman and Ambassador Barshefsky for holding this public hearing on agricultural trade policy for the upcoming world trade negotiations. Like me, many of my neighbors operate small to medium sized family dairy operations. The most current USDA data shows that Minnesota lost 3,000 dairy farms between 1993 and 1997. Wisconsin lost 5,000 dairy farms during that same time period. Family dairy farms are the backbone of the upper Midwest dairy industry and our rural communities throughout the upper Midwest. We need to find a way to stop the loss of dairy farms because our dairy industry in this part of the country is bleeding to death. I am concerned that unless our government changes direction and stops supporting the self-serving trade policy of the Cairns' group we will lose even more dairy farms. It’s time for the U.S. government to stop advocating the misguided trade policy of the Cairns' group of free trading nations at the expense of American family dairy farmers. The U.S. is being led by the nose by New Zealand, Australia, Canada and other members of the Cairns' Group and as surrogates in this country in setting dairy trade policies instead of looking out for the needs of its own dairy farmers. U.S. trade negotiators are making a major mistake by working to eliminate our tariff rate quotas. Internal supports and other vital safety net programs needed to keep family farmers on the land. Without TRQs our market will be open to a flood of low priced dairy imports from all over the world. Farm milk prices would fall sharply to $9.50 per hundred weight or less and even our most efficient dairy farms would be forced out of business. The free traders assure us that there will be opportunities for America dairy farmers to export into the world market once all the import barriers and export subsidies are removed. That assumption, however, ignores the realities of the ongoing global economic depression and the ability of lower cost competitors to undercut us in what few export markets will be available. The only reason we had record high milk prices last year was because dairy unlike almost other major farm commodities is not export dependent. Instead of working to lower our milk prices we need to take a different road that strengthens our dairy markets and preserves America’s family dairy farms. Our trade policy must recognize the multi-functionality of agriculture, the many benefits that strong and vibrant family farms bring to America’s consumers, our rural economy, our environment and indeed our nation. Like us, the European Union recognizes the importance of strong family farms and is opposed to the Cairns' proposal. Our government should be working to find common ground with the Europeans rather than blindly following the Cairns' group in setting U.S. dairy trade policy. Our Cooperative’s president, David Krugg, of Owen, Wisconsin, was part of the dairy trade coalition delegation that testified before the European parliament’s Agriculture Committee in Brussels on February 17. I am submitting Mr. Krugg’s Brussels' statement and ask that it be part of the record of today’s hearing. Unfortunately, our government is listening to bad advice on the zero for zero policy being pushed by countries that want unlimited access to our markets. The National Milk Producers Federation, the U.S. Dairy Export Council, the International Dairy Foods Association and other processor groups in this country support the Cairns' proposal because they’re interested in lower prices for farm milk, cheese and other raw materials. While the processors support the Cairns' proposal, American dairy farmers at the grassroots' level clearly do not. It’s time that our government understand this fact and the realities of the economics of the international trade and dairy products. Maybe then we would have a negotiating policy that doesn’t threaten to destroy our family dairy farms and the rural communities that depend on them. I also want to stress the need for more grassroots' dairy producers’ representation and farmer friendly procedures on the appointed panels that advise U.S. negotiators on trade policy, the Agriculture Policy Advisory Committee and the Agricultural Technical Advisory Committees. And I want to take this time to thank you for this opportunity to present our views. Thank you.