MR. SCHMITT: I'm just going to skip most of the trade because you covered it today already. I just wanted to take the 8th line down where it says the current problem with agriculture grain prices is that free enterprise is being circumvented by trade policies between countries and bargaining power between the farmer and grain buyer. For these reasons, the price of raw materials should be regulated at a level consistent with the economy that is consuming them while maintaining free enterprise on our farms. We aren't saying enough about big corporations like Cargill, et cetera, et cetera, there's only a handful left.

Let's go to that picture now. Anyway, if you look at the bottom, we're the peed on peons down there at the bottom, farmer/producers. And as soon as our production crosses that dotted line, we've lost complete control of that. There's no control by us anymore, we have no say so in price or anything. They discount us, they do everything. It hits the grain elevator, he doesn't have a lot to say about it, but when it hits above that, my production goes right. It goes to the grain company exporter, foreign process, et cetera, to the foreign wholesaler/distributor. Those people on the right side are determining what I get paid on the left side on the bottom and that is not right.

We met with the Secretary of Agriculture two months ago in Washington, we pointed this stuff out, he was impressed with the ideas we have here. I'm going to skip all that trade stuff, and just leave this picture here for a minute. Us farmers/producers, we take all the risk, nobody takes risk like us. And we have to take all the crap that they dish out to us up there. We have no say so at all for determining the price for our commodity, that is absolutely not right. I think it is totally unfair that us producers are not on this negotiating team out there doing the negotiations.

Another point I want to make, just several years ago, there was news in some of the magazines that by the year 2000, all negotiations of sales of grain will be done by the grain companies, themselves, by the year 2000 -- I should say 80 percent will be. That means that Cargill will be selling to Cargill and wherever, to Cargill there, to Cargill there, to Cargill there. There is no competition left anymore. I don't know how this fits in with your trade talks or how that's going to happen, but we are totally left out of that picture. And we are the most important people in this picture and we're being left out.

Now, I want to go to the next one, which is the plan that we introduced quite a while ago and we rewrote it last week. I'll give you copies of all this stuff. I don't know if it's going to fit on here, federal budget, USDA. Okay, I'm going to read it.

We got a three-point plan, and this plan can be a sample of what other countries could use, it's a domestic policy only. And if we would do something like that here, other countries could follow suit and do the same thing. The established price index, the Freedom to Farm Act retains the 49 permanent law. And that's the most important thing about the Freedom to Farm Act is that permanent law, which is the parity formula, which we -- people don't like the word "parity" so we call it the "Established Price Index." It's been there for a hundred years or whatever, and it is an accurate calculated balance between agriculture and other industry. So that EPI will be the basis for setting the minimum prices to be paid out of the federal budget.

Our original plan called for the processors to pay this bill, but since they're too powerful, we're going to forget it. Uncle Sam is giving us money now, let's run this thing through the general fund. This plan is only in effect when there needs to be a correction between the average market price and the current established price index. That price index would put wheat today at $9.60 some cents a bushel. We're saying we don't probably need that, let's go with 60 percent. We informed the Secretary of Agriculture about this, let's use that as a basis, it's pretty accurate, let's go with that.

When a correction is needed, all the grain purchases for domestic usage exclusively will be recorded with USDA at the end of the year. The grain companies that use grain here that we use here in our country will be recorded, just the bushels amount or whatever. USDA allocates funds for that, that goes into the Commodity Credit Corporation. Now we figured out a way we can get it back.

Imported grain can be treated the same. Once it's bought and paid for here, it should be considered domestic and follow the same -- it won't hurt the grain companies at all, it shouldn't make no difference. Since Uncle Sam is paying us all this emergency funding all the time now the last couple of years and they're going to give us a bunch this year, why don't we go with a business plan? This is what we call the business. Let's go to the next one.

The farmer/producer gets it back, we figured out a way you can do it. The farm can remain in effect, this can be just added on, do the same process he's going through now and just keep going with that. Let's go to the last one.

We got it figured out so the USDA and FSA can handle it properly, just get paid out of the CCC account only when we market grain as farmers. Don't need anything else, we'll get paid just for what we use in our country and that's about half, roughly. Why can't this be a guide for other countries to follow the same thing? It's a domestic plan. That's all I got to say right now.

MR. NELSON: Thanks, Alfred. We want to make sure that those slides get part of your stuff that Alan gets here, too.

MR. SCHMITT: I've got copies of all this for anybody that wants them.

MR. NELSON: Panel, questions or comments for Alfred?

MR. SCHMITT: I just have one question. Why are these grain companies like a hands-off policy? We don't dare touch them, these big companies.

MR. GALVIN: That's not a matter that I can really speak to here today. As you know, on the Cargill purchase of ConAgra, that went before the Justice Department, Secretary Glickman sent a letter to the Justice Department urging that whole purchase be closely examined. Other than that, there's not much more I can say about it today.

Just to clarify, though, you said earlier that the grain companies are part of the negotiations or whatever and I just want to reassure you that only government officials are actually a part of the actual negotiations. We do have advisory committees that help us, just like these public hearings help us, in setting our policy. But we have a number of individual producers that serve on what we call our Agricultural Policy Advisory Committee, as well as, these agricultural advisory committees that we have for a number of specific commodities like grains and livestock and sweeteners and that sort of thing. So we have plenty of direct input from producers as we put together negotiating positions.

MR. SCHMITT: On trade imbalance, we've got a 20 billion dollar trade imbalance the last month that was calculated out. This too much. We need five things: Balance, equality, fairness, justice, and private ownership. Those are five things that have to be dealt with when we trade.

MR. GALVIN: That's one positive thing about agriculture, I think, is that we still have that positive net trade balance in the case of agriculture. So that helps to compensate for the very huge deficits in other sectors.