Committee Overview

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Committee Overview
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Our Defining Beliefs

• We believe in the farmers and ranchers of the
  United States
• We believe in their capabilities, adaptability,
  and willingness to tackle problems and thrive
• We think American farmers and ranchers can
  compete head-to-head with any other farmer in the
  world

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Our Goal

• To see American farmers and ranchers operating in
  a market-orientated environment
• With the government serving only as a safety net,
  NOT a primary source of revenue

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Structure of Agriculture
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Structure Paradigm Shift

• The structure of agriculture has moved away from
  the middle
• In 2002, there were 2.1 million farms producing
  200 billion of agricultural output

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Total Farm Numbers
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Collapse of the Middle

• Minimum number of farms to produce between 25
  and 75 of the value of agricultural output

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Rural Life
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Rural Life Paradigm Shift

• Rural communities are less dependent on farms
  than farms are dependent on rural communities

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Farm Family Income by Source Type
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Population Loss Counties
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U.S. Interstate System
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Trade
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Trade Paradigm Shift

• Global trade will be a key vehicle for future
  agricultural profitability, but the United States
  wont necessarily be the driver
• The WTO obligations will not let the United
  States take a business as usual approach to
  future farm policy

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Exports Share of Cash Receipts
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Increase in Middle Class Consumers
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Historical U.S. Agricultural Trade
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Marketing
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Marketing Paradigm Shift

• Agricultural marketing goals will shift as
  farmers and ranchers learn to produce what they
  can sell, and not simply sell what they produce

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Sources of Agricultural Income

• Food
• Fiber
• Fuel
• Fun
• Fertilizer
• Biomass
• Filter strip
• Scenery

• Place for
• Hunting
• Fishing
• Bird watching
• Photography
• Other Recreation
• Pharmaceuticals
• Carbon Credits
• Habitat Funding

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Adjustments in Agricultural Exports
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Marketing and Risk Management

• Risk management can be very important in
  agricultural marketing strategies

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Environmental Issues
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Environmental Paradigm Shift

• Market-driven actions are used to achieve
  environmental benefits
• Specifically, through public and private funding

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The Environmental Concern Curve
Rich Dirty
Poor Dirty
Rich Clean
PoorClean
Environmental Degradation
Super Rich Clean
Economic Development
Source Sandra Batie, Michigan State University
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Environmental Legislation
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Environmental Activism
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Research Technology
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Research Tech Paradigm Shift

• Research and technology are becoming increasingly
  global
• The United States does NOT have a monopoly on
  agricultural research
• Agricultural research and technology has provided
  the United States sector with its competitive
  advantage

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Growth in Ag Productivity, Output and Inputs
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Rates of Return on Agricultural Research
Development
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Historic U.S. Fuel Ethanol Production
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Government Support
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Govt Support Paradigm Shift

• Federal government involvement in the agriculture
  sector will not exist as it does today
• Due to growing domestic budget pressures
• Due to structural changes in the agricultural
  industry
• Due to international trade agreements

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Total Federal Debt
Does NOT Include Katrina, Permanent Tax Relief,
Fixing AMT, Additional Defense
Your Share as of September 19 26,663 Your
Grandkids Share in 2015 44,171
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Historical Govt Support of Agriculture
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Hired Farm Workers Wage Rates
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What If?
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What If

• Other countries open their markets
• Substantially reduce tariffs
• Eliminate export subsidies
• Effectively eliminate production distorting
  subsidies
• Domestic policies are adjusted to allow producers
  to take advantage of these opportunities
• And isnt that what were ultimately all looking
  for?

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Then

• How would we justify our own subsidies and
  protections?

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The MAAPP Vision...

• A world where farmers are allowed to compete
  with farmers

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What It Is Not

• We are NOT proposing unilateral disarmament
• Reduction in support only in concert with opening
  of markets and reductions in trade distorting
  support elsewhere around the world
• We are NOT proposing 2007 Farm Bill policies or
  recommendations

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What Does There Look Like?

• We also remove our protections and our production
  distorting supports
• However, reform must address other main areas
• Safety net
• The business environment
• Other environmental services
• Healthy rural America

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The Safety Net

• Actuarially sound revenue and production
  insurance, consistent with WTO rules
• Provide WTO-allowed insurance at minimal producer
  cost
• Provide federally funded reinsurance for other
  buy-up, but again, at actuarially sound rates

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The Business Environment

• If were going to compete, then lets make sure
  our own government doesnt put up roadblocks
• Regulatory concerns
• Labor, immigration and infrastructure
• Tax probably most important
• Create environment for agricultural business
  firms to thrive
• We want all up and down food chain to look to the
  United States first

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Providing Environmental Services

• Environmental activities should be pushed more
  toward the market place
• If there is a demand for a specific environmental
  service, agriculture can provide the service

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A Vibrant Rural America

• We recognize need for strong rural economies
• Also recognize two distinct faces of rural
  America and the very different needs for each
  region
• Depopulating areas
• Each region brings own qualities/challenges and
  regulatory and tax issues are the most critical
• Urban encroachment areas
• Need to engage early, be willing to discuss
  zoning, and include education efforts
• We want to create environment where entrepreneurs
  can thrive

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How Do We Get There

• Transition is a very important thing
• Do not see this as an overnight shift
• Three options
• Phased reduction of current program
• Buy-out
• Monetize, freeze and phase-out

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The Meaning of Our Vision..

• We recognize what producers need most is ability
  to make their own choices
• To make decisions based on the marketplace, not
  government direction
• It recognizes that some producers will fail and
  some will decide to leave farming. We are after
  a system that will allow producers to compete,
  not a system that guarantees us a living.

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And Recognize the Fundamental Question for Farm
Bureau

• Some seek to change the future,
• Some have the future thrust upon them
• We talked about
• shaping the future

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Questions?
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To Get the Report

• Copies available here, at the exits
• Copies available in our booth in the Showcase, so
  stop by
• Electronic copies will be available on the AFBF
  website (www.fb.org) next week
• Additional copies available for purchase on the
  AFBF website (www.fb.org)