MR. MAKI: I've given copies to him, I hope that the panel would have them. Good morning, my name is Ken Maki, I'm President of Montana Farmers Union. I own a small ranch in the Highwood Mountains east of Great Falls. Montana Farmers Union is a division of National Farmers Union, which represents around 300,000 farm and ranch families who make their living growing fiber and livestock. And as one of these families, I know that my livelihood depends on the price and trade policy which allows me to receive a fair and honest return in exchange for my labor, my efficiency, and my resource conservation practices.

Although there have been some policy shortcomings, we at Farmer's Union appreciate the hard work of the USDR, USDA, Secretary of Agriculture, and respected staffs. We're all in the same battle here as we prepare for the WTO ministerial round in Seattle.

Now, the free trade motto that has been used to train our economists and students, including me, makes several assumptions that do not apply to the real world. For example, the motto assumes, number one, competition throughout all sectors from input to retail without the anti-competitive effects of the concentration. And I've handed out a handout by Dr. William Stringer from the University of Missouri. You can read it in your leisure, but it's 20 pages long.

Number two, no barriers to trade, or at least the elimination of barriers not predicated on science-based, health, or safety considerations.

And number three, relative economic stability and equality among all trading partners including minimal distortions caused by domestic, fiscal, and monetary policies such as currency evaluations.

Now, none of the above are true, so what are we trying to do? We're putting farmers out of business, I can tell you that. We believe that the US is committing a serious transgression by attempting to adopt a theoretical model to real-world traditions based on inaccurate assumptions. And I want to emphasize this because I know all of you here, as well as your capable staffs, were trained in this model just as I was. But I remember the professor asking, "What are those assumptions and do those assumptions apply?"

The raw material industry such as lumbering, farming, and ranching hurt first and they hurt worst when unsound policies are recklessly administered. Please pardon the cliche, but back on the ranch, the rubber meets the road. Theory is great, but that's exactly what this is is theory. And often times, it just doesn't work that way in practice.

We would caution against attempts by US negotiators to bargain away American or any other nation's domestic farm policies which, in turn, depress net farm income. Such policies will force family-sized units to go broke and decimate rural communities, and that's happening. Perhaps the large corporate farming will survive in the short run at the expense of the smaller units, but what about the long-run picture? Laissez-faire is not a beneficial policy for competitive agriculture which must operate in a price administered over time. This is inconsistent and it's irrational. A free market framework is not always the most effective way to achieve natural resource conservation or environmental protection.

Multinational food and fiber corporations who can move from country to country and profit by a trade at all costs will ultimately have to answer these questions, but by that time, the fabric, and I emphasize, the fabric that helped make this nation great will be destroyed. Trade is important, but so are our farmers and ranchers. And a lot of our members, they feel this run-away free trade train ought to be derailed. But I would give you a few general observations.

The Uruguay Round calls for decoupling of income supports for producers. We believe that decoupled income supports have not been proven to be the least trade distorting instruments in all economic admissions. For example, decoupled payments often lead to higher land values and higher cash rent regardless of the commodity grown on it. Number two, decoupled payments will not necessarily slow consolidation of the units.

Of the four types of income support payments allowed under the green box criteria, we feel there should be no restrictions on the type of income support and safety net programs designed to limit domestic price supports. And we actually prefer no further eroding of tariff rate quotas especially in beef and sugar, those are important to us here.

And finally, it seems to us there should be a green box exemption for coupled, commodity-specific, diminimous tariff and trade practice. On your form, I have listed 12 specific recommendations and I'm not going to go through them in the interest of time. But I would ask that you listen carefully to the views of farm and ranch families whose initiative, entrepreneurship, and responsibility to their land and their rural communities have helped make the US a premier grain, fiber, and livestock supplier for the world. Our conservation farming practices corroborate our commitment to restore stewardship while meeting the most comprehensive environmental standards in the world. Our labor and health practices set the standard for most nations, and our inspection and safety regulations are not even considerations in many nations. Farmers Union wants these standards kept for our producers and all US citizens. Thank you for your time and I would be happy to answer any questions.

MR. NELSON: Thank you, Ken. Panel?

MR. GALVIN: Ken, I did have a question. On your point on beef, you made the comment that we should not increase our current import quota on beef. Is that your position? And, obviously, we wouldn't want to do that on a unilateral basis, we wouldn't want to just do it without getting something in return, but if we could get something in return like lower tariffs in Asia on US beef exports, heading in that direction, would that change your view at all?

And I ask the question because right now the US is a net importer of beef on a pound basis, on a volume basis. But we're a rather substantial net exporter if you look at it on a value basis, and that's because of all the top quality beef that we're sending to Japan and Korea and elsewhere. So we are a substantial net exporter in valued terms, but we're not in volume terms. But I would just be curious in getting your reaction as to whether or not we should allow increased imports if we could get some offsetting benefits by way of reduced tariffs or increased quotas for US beef heading overseas?

MR. MAKI: My understanding is that the tariff rate quotas, we're already down in a very, very small percentage, as far as beef is concerned. And my understanding is, is that a lot of this has been negotiated away in years previous, in sessions previous. I guess what we're saying, and we don't want to see it eroded any further, the main thing is, is that here in Montana, we don't process a lot of baloney and we don't process a lot of stuff and ship it out. And it's been referred to as that great sucking sound that comes down out of the north and then on to the coast and then it goes back up. Our producers don't benefit a whole lot from that, but we sure do see a lot of those trucks coming down to the south.

We've got a different kind of an economy here, and we think that maybe we shouldn't throw the gates wide open. There ought to be some kind of a bridle on it because we don't benefit from that, we're at the expense of maybe the multinational companies who can move to either side of the board.

And, I guess, while I'm talking, I'm going to talk to you about STEs. I guess I don't have -- we, in our organization, don't have a real firm opinion on that because we know this, for example, the Canadian Wheat Board is loved by their producers in the north and is hated by their producers in the south. And I believe the transparency should be something that we work for and strive for, but who are we going to have be this big dog in the playing field? Are we going to have it be an STE or are we going to have it be Cargill or ConAgra or something like that?

So I would put my votes with maybe an American or maybe a North American Wheat Board, something like that, so we got a stabilization in the product market.