MARVIN YOST: My name is Marvin Yost, and I would like to express the appreciation of the Nebraska wheat grower for the opportunity to present our thoughts to this listening session today.

Mark the importance we place on the seriousness with which we approach the coming trade negotiations. We would like to open our discussion by stressing that the overriding concern that must guide all of the negotiations during the coming trade talks is the need to make doubly sure no additional domestic farm support programs are traded away.

The most recent Uruguay Round and the predecessor bilateral negotiations ended up sharply reducing available options for offsetting unfair trade practices and has led to the disastrous farm income we have witnessed over the recent years.

The Nebraska Wheat Board is not against trade in any sense of the word. We fully recognize the importance that the international trade plays for the agriculture community. In fact the Nebraska Wheat Board is one of the pioneers in wheat promotion, having been the second entity to organize on behalf of the wheat industry.

However, we are convinced that the level playing field will never exist in rural agricultures. As an example, specifically Nebraska producers here can't even compete against producers in adjoining states due to the Nebraska excessive property tax.

Furthermore, we know that food security is a top priority of any nation, and this basic public policy will drive nations to make every attempt to over produce those commodities they can grow for their own food supply. The net result in this desire to feed their own people which prevails across the world is that the nations will always strive for excess production capacity to produce food regardless of price levels needed to assure viable economic return for those growing the crops.

As long as this ability to over produce exists, is that an economic fact of life that producers will not receive an adequate price to meet production costs and still support their families. Thus the focus of our comments will recognize that markets will almost never provide adequate prices to assure producers sufficient returns to stay in business.

There have been only two periods since the end of World War II reconstruction that market prices were at levels to fully compensate farmers. One was in 1973 and 1974 period. An unexpected USSR buying and another was just a few years ago in 1995 and 1996, when a series of short crops impacted much of the world. Therefore we want to stress the importance of tempering any trade agreement to permit complimentary income to facilitate the needs of productive agriculture.

As part of negotiations, we feel that the following conditions are imperative for the benefit of producers.

The authority to conduct domestic programs such as are defined by the blue box provisions of the Uruguay Round agreement, and our agriculture absolutely must remained. We know full well that Europe will continue to support their farmers with production set asides for a system of direct payments. It will be critical that we should not tie our hands in terms of future farm policy by restricting any appropriate option including production control measures when use of them may be dictated by economic conditions.

Secondly, we must be assured that provisions are included to enable implementing an adequate crop insurance program using fully adequate contribution from the USDA, specifically the crop revenue coverage provisions. Present risk management agency insurance programs should clearly be defined as a green box permitted concept and remain unrestricted in any manner.

It seems to be a far-fetched interpretation to assume that a program which is based on an open market price discovery and covers less than 100 percent of producers' production costs can in any way be trade distorting.

Third, we need to clarify the role of the loan deficiency payment in terms of how it was judged under trade agreement rules. It is crucial that LDP based on uncapped loan rates is considered to be within green box permitted farm program provisions. Due to the red light, I'll conclude my remarks.

MICHAEL LEPORTE: Thank you, Marv.

JAMES SCHROEDER: I earlier tried to explain fast track in case anybody didn't understand it, and I hesitated to get into the green box and the blue box and the amber box. I don't think I'll do that. But just to say that on the area of domestic subsidies, what we tried to do was to break those apart and on the basis that we -- all countries have programs to support our farmers and help our domestic agriculture, and the question is, okay, can we agree that some of these types of programs are okay and shouldn't be -- we shouldn't worry about those like money into research and then some are questionable? But what we're really trying to do is identify programs that are distortive of trade and tied into price and production. And those are the ones that we were trying to get a handle on and bring those down. The ones that are most trade distorting.

So that's what we're talking about when we talk about green boxes and blue boxes and amber boxes. And that whole area is going to be an area of negotiation in the next round I'm sure because, again, our effort here is to recognize that all countries will continue to support their farmers in some way or another but to try to identify and reduce those types of programs which are the most distortive to the world trading and price system.