Thank you. Charles Ottem, Beth Nelson, Barry Coleman will be next.

MR. OTTEM:

Good morning. I’m Charles Ottem a farmer from Osnabrock, North Dakota, and chairman of the North Dakota Barley Council. My brother and I raise barley, wheat, canola, sunflower and flax on a 3,000 acre farm that my grandfather established 117 years ago. Interestingly enough, Marc says whether a future generation of farmers will be financially able to continue our operation greatly depends on the success of negotiations for agricultural trade reforms. My Governor mentioned that there was a lot of farmland needing to be still planted in North Dakota. Interestingly enough I finished seeding yesterday at noon and at three -- three o’clock yesterday a thunderstorm came through and dumped ten inches of rain on my farm and I had fully 1,500 acres under water when I left to come here. So, I don’t know, I might have to go back and start all over again. The North Dakota Barley Council representing the state’s 10,000 barley producers is grateful for the opportunity today to tell you how current U.S. trade policy and trade policies of other countries affect North Dakota barley producers. Barley has suffered perhaps more from trade inequities than any other agricultural commodity. Barley is historically a major source of farm income in North Dakota, second only to wheat in total acres planted and crop income. Although North Dakota remains the leading barley producing -- production state, it’s barley acreage has decreased nearly 1 million acres or about 31 percent between 1993 and 1998. USDA projects that North Dakota’s acreage will continue its downward slide dropping from 2 million acres planted last year to 1.5 million this year. Barley acreage in other states is showing similar trends. Many market forces are precipitating these acreage reductions, but none play a more significant role than our nation’s current trade policy and the trade practices of other nations. The Barley Council has adopted a comprehensive list of recommendations for trade reform and believes that these recommendations if implemented would substantially improve an agricultural industry that has been weakened largely because of poorly conceived trade agreements. The Barley Council’s trade reform policy is attached at the end of my statement for your -- for your reading. To keep my statements brief, however, I will only address what must be the two highest priority in agricultural trade reform; the elimination of export subsidies and the elimination of trade distorting practices used by state trading enterprises. I will quickly identify other trade issues that must be resolved. Since 1994 exports of U.S. barley have declined about 60 percent while EU exports have increased by about 70 percent accomplished exclusively through the use of export subsidies. We simply cannot compete with the EU when it subsidizes its barley sales at a $1.50 more a bushel. The EU barley export subsidies amount to about 30 cents a bushel more than what I receive today at my local elevator. Export subsidies must be eliminated immediately. Any proposals for a long-term phase out such as another ten-year phase in strictly and simply cannot be accepted. The EU has already had working into this agreement ten years to ratchet down its export subsidies and in that time it has literally bought the world barley market. While the EU’s exports have risen dramatically, unfortunately U.S. trade policy has been to walk away from subsidized competition. The Barley Council also has great concern with EU’s agenda 2000. U.S. negotiators must not allow the EU’s agenda 2000 to be implemented unless it decouples production requirements from government support. The EU is undoubtedly our largest concern regarding trade -- regarding fair trade, but the trade distorting practices of the Canadian Wheat Board and the Australian Barley Boards have also taken a great toll on U.S. barley producers. Canada’s barley exports to the United States have increased from 6 million bushels prior to the Canadian/U.S. trade agreement to as high as 71 million bushels during the 93-94 year and 40 million bushels last year. Not only have U.S. barley producers lost significant export sales under current trade agreements but we also have lost much of our own domestic market because of trade distorting practices of state trading enterprises. And while we sit here today, cars loaded with Canadian barley are crossing the border flooding our market, yet our government has yet to address the difficulties associated with merging two completely, very divergent and incompatible trading systems. The state run Canadian Wheat Board uses our free and transparent market to its advantage dumping barley and other grains into the United States at undisclosed prices. The Canadian government distorts trade further by exercising great control over freight rates, licensing and varieties, price pooling, freight pooling and a host of other market sensitive forces. Quite simply, we must not only require price transparency from state trading enterprises but also address other underlying governmental regulations and support mechanisms that provide STEs with unfair marketing advantages. The market and trade distorting practices including the underlying governmental support mechanisms of STEs must be eliminated. Other trade reforms -- I have a list of slide items for your review and -- and they’re all included in the -- in my trade policy position which is at the end. There are those who believe agriculture should not be the number one priority in the upcoming WTO. That sentiment is dead wrong. North Dakota agriculture and perhaps the entire nation’s agricultural industry can no longer afford any less than significant worldwide agriculture trade reforms. It is imperative that you, our trade negotiators, use information gathered here today and at these sessions around the nation to make substantial improvements in trade policy during the upcoming round of WTO. I thank you for your time.