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Conner: co-ops, trade, antitrust concerns, and the new farm bill

Chuck Conner, former USDA under- and acting-secretary, now president of the National Council of Farmer Cooperatives. Co-op issues as next farm bill approaches. Co-ops watching DOJ and potential antitrust/Capper-Voldstead Act changes.

Having sat through strife-filled hearings and town hall meetings as a former USDA acting- and under-secretary, Chuck Conner is used to taking heat over farm policy positions. This time around, though, instead of taking heat, Conner will be giving it in his role as president and CEO of the National Council of Farmer Cooperatives.

Considering the rush to finish the last farm bill, the problems with implementation (which continue to this day), and regional problems with certain programs (see: Southern row crop farmers and SURE), Conner says it is wise to start the next farm bill debate so early.

For more, see Chuck Conner.

Conner spoke with Delta Farm Press on Sept. 17 about the importance of co-ops, the need for agricultural factions to stick together, the necessity of expanding agricultural trade, and antitrust concerns. Among his comments:

As we enter the next farm bill debate – and, obviously, you’ve had great experience with the machinations that go into making a farm bill – I wonder if you would contrast (your former job at USDA) with your position now?

“I’m now president and CEO of the National Council of Farmer Cooperatives. We represent all the farmer-owned cooperatives in the country that have a great, very diverse, stake in the farm bill debate. (Concerns) range from the cotton, rice and grain interests who have always had a big stake in Title 1 (dealing with price supports for farm commodities).

“We also represent all the producers of specialty crops who market their produce through farmer-owned cooperatives. They have a big interest in making sure fruits and vegetables are treated fairly in the debate.

“I’d also add all our producers are interested in sustainability and conservation. That farm bill title is huge for them, as well.

“The trade title (is also important). I represent commodities like some of the tree nuts where 70 percent of their output is exported.

“So, we have a huge stake in the farm bill debate. This will be my seventh farm bill. I’m anxious to get into it and look at it from the perspective of the co-ops.”

On the push-and-pull between the specialty crops and row crops (traditionally those most dealt with in the farm bill)…

“We hope the relationship is a positive one.

“Broadly speaking, I think in the next farm bill debate, commercial and family farm agriculture really need to stick together. We’re under attack in commercial agriculture from a number of outside interests. We don’t need a lot of family fights and feuds to divide us.

“There are a number of threats to agriculture, in general, going on in the world and we need to work together to fight against (them).

“In terms of the conflict, certainly specialty crop producers I talk to and those we represent aren’t interested in getting into the Title 1 debate in terms of farm price supports.

“Historically, where there has been some conflict is just the dollars allocated to each title. Do we use Title 1 dollars for other purposes including help for specialty crops?

“I don’t know we can predict how that’ll play out because we just don’t know the budget situation for the farm bill yet. And we won’t know for a while.”

Writing farm bill with huge deficit

“It’s no secret that we have a $1.6 trillion debt in this country. I don’t think anyone believes that is sustainable. So, there will be a lot of pressure on the new Congress, no matter who is in power, to reduce the deficit and control spending. We don’t know how that will impact the farm bill’s available resources let alone how those will be allocated between each title.

“I will say that, from our standpoint, we’ll be quick to point out that the cost of the farm portion of the farm bill versus the nutrition portion is down substantially from historical levels. The early farm bills I worked on, help for farmers – no matter what they were growing – accounted for a substantial percentage of the farm bill. Now, it’s a very, very small percentage. The cost of the farm programs has come down and most of (the savings) have been consumed by the nutrition titles.

“So, we’ll point that out so that, when Congress does deal with the deficit, they give some (weight) to the fact that the farm program portion has already taken huge reductions in spending. That’s kind of unprecedented in the federal budget because most everyone has seen substantial increases (in spending), which is why we have the current deficit.”

Speaking of the deficit, President Obama has told the USDA to increase ag exports. Do y’all have a position on the opening of trade with Cuba and the trade deals pending with Columbia, South Korea and Panama? I know those deals were a topic of conversation when you were at the USDA.

“They were, indeed. When I was at USDA, I led a delegation to Columbia after the signing of the U.S./Columbia free trade agreement.

“Exports are an important part of what co-ops are up to and important to the farmer-owners we represent. Whether it’s cotton, almonds or wheat, exports account for a substantial percentage of what we’re already selling.

“And our membership does take note that there will be a big population boom on the planet, most not in the United States. So, the future growth potential for American agriculture and co-ops will be overseas.

“We’d like to see an easing of trade restrictions with Cuba. There’s an opportunity there to increase sales of commodities, particularly rice. There’s a great competitive advantage for the United States to ship products to Cuba and we’ve been unable to do that…

“With regard to the individual free trade agreements, our membership generally favors (them). We wish we could have a multilateral round of successful trade negotiations. There, all the world players would be required to trade under the same set of rules.

“We favor, first and foremost, trade agreements that everyone participates in. Having said that, we’re aware that the Doha Round is stuck in the mud.

“I think in the cases of Panama and Columbia, we’ve acknowledged as an organization that those (deals) represent only upside potential in terms of exports. Any easing of restrictions on their imports into the United States has already been implemented. By passing those agreements you’re only providing the same benefits to our growers that their growers already have.”

Cooperation between farm groups…

“I don’t think there’s any question that there’s been an attempt to get an early start on this farm bill. The last one was put in place way too late.

“After all the dust settled, implementation was fast and furious. That isn’t how the process should work.

“The (last farm bill) should have been passed earlier. USDA should have more time to do a better job of implementing (farm bills) without pressure to deliver benefit within a few months. That isn’t the way the system is supposed to work.

“So, it’s understandable that a lot of groups have gotten out there early on the farm bill. (Minnesota Rep.) Collin Peterson, chairman of the House Agriculture Committee, has led the charge to get an early start. His committee has already held a number of hearings on that.

“There are two problems.

“First, we don’t know what the makeup of the House and Senate agriculture committees will be next year. Obviously, there’s an election coming up in about six weeks. The makeup and heads of those committees could well change. Even if the leadership doesn’t change, there will be a lot of new committee members who have never been through a farm bill debate. There will be a huge education associated with those new members.

“Second, again, is the budget and resources available for the farm bill. That will be determined by broader macro-economic policy for the country.

“Serious farm bill debate can’t begin until those two issues are settled. Despite wanting to get an early start, despite hearings and getting out the chute early, there’s only so much that can be done without those two issues settling out.

“My guess is, once again, we’ll be right up against the deadline before finishing the next farm bill.”

Capper-Volstead Act

“From the co-op standpoint, we’ll be very careful to watch for anything in the area of competition – or a competition section of the farm bill.

“The Department of Justice and USDA have been having workshops all over the country to review competition issues in agriculture. Part of that review has (involved) provisions under the Capper-Volstead Act, which is the very limited antitrust exemption that enables co-ops to form without fear of prosecution under U.S. antitrust laws.

“Obviously, any effort to change Capper-Volstead or get into a big debate on competition issues is something we take very seriously. It goes to the heart of co-ops. Without some of the antitrust immunity we’re unable to bring farmers together as a group and market products (collectively).

“We hope the workshops lead to an affirmation that co-ops are doing a good thing versus any recommendations coming out of the DOJ, or elsewhere, that say we need to look at changes in these competition issues.”

Any indication when a decision or statement from the DOJ is coming down?

“Not yet. They’ve held four workshops, so far, in Iowa, Wisconsin, Alabama and Colorado. They’ll hold the fifth, and final, workshop in Washington, D.C., in December. After the last workshop, we assume we’ll begin to hear what they intend to do.”

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