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AGRICULTURE RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND RELATED AGENCIES APPROPRIATIONS ACT, 2000--Continued
(Senate - August 03, 1999)
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AGRICULTURE RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND
RELATED AGENCIES APPROPRIATIONS ACT, 2000--Continued
Amendment No. 1500
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. Mr. President, I rise to support the amendment offered
on this side of the aisle because I think it meets all the income
deficiency needs of American agriculture pretty much in the same way as
the Democrat proposal does, but it also does not spend money in a lot
of other areas that do not meet the immediate needs of agriculture.
I have always thought of agriculture and the needs of food production
and the process of food and fiber production in America as kind of a
social contract between the 2 percent of the people in the United
States who earn their livelihood in farming and the rest of the 98
percent of the people, as well as a social contract of the last 60
years of some Government involvement and some Government support of
agriculture, particularly in times when income was very low.
Thinking of it as a social contract, then, I do not like to believe
there is a Democrat way of helping farmers or a Republican way of
helping farmers. I like to think of our being able to work together on
this social contract pretty much the same way we work together on
Medicare and Social Security--to get agreements when there are changes
made in those programs.
In those particular programs--and, thank God, for most agricultural
programs--there have not been dramatic changes over the years unless
there has been a bipartisan way of accomplishing those changes. So,
here we are, with a Democrat proposal and a Republican proposal. People
watching this throughout the country, then, have their cynicism
reinforced about how Congress does not cooperate.
While this debate has not been going on just today and yesterday but
over the last 2 or 3 months, there was an assumption that there would
be help for agriculture under almost any circumstances; it was just a
question of how to do it and exactly how much. While this debate was
going on, we have had different approaches, and it has brought us to a
point where we have a Republican proposal and a Democrat proposal and
we are talking past each other. I am hoping sometime before this debate
gets over today and we have a final document to vote on, that we are
able to get together in a Republican and Democrat way and have a
bipartisan solution, at least for the essential aspects of the debate
today, which is to have an infusion of income into agriculture
considering that we have the lowest prices we have had in a quarter
century.
I think there are two stumbling blocks to this. I think on the
Democrat side the stumbling block to bipartisan cooperation is a belief
among some of those Members that some of the money should find its way
to the farmers through changes in the LDP programs as opposed to the
transition payments. On our side, the stumbling block seems to be that
we are locked into no more than $7 billion to be spent on the
agricultural program.
So I hope somewhere along the line we can get a compromise on this
side and a compromise on that side of those two points of contention.
Hopefully, we on this side could see the ability to go some over $7
billion--and that the Democrats would see an opportunity to use the
most efficient way of getting all the money into the farmer's pocket
through the AMTA payments.
The reason for doing it that way is because we do have a crisis. The
best way to respond to that crisis is through that mechanism because
within 10 days after the President signs the bill, the help that we
seek to give farmers can be out there, as opposed to a convoluted way
of doing it through the LDP payment.
I do not know why we could not get a bipartisan compromise with each
side giving to that extent--Republicans willing to spend more money and
the Democrats willing to give it out in the way that most efficiently
can be done.
So I see ourselves right now as two ships passing in the night, not
speaking to each other. We ought to be able to get together to solve
this. That is my hope. I know there are some meetings going on about
that now. I'm part of some of those meetings. I hope they can be
successful.
In the meantime, talking about helping the family farmer, I think it
is very good to have a description of a family farm so we kind of know
what we are talking about. I am going to give it the way I understand
it in the Midwest, and not only in my State of Iowa.
But it seems to me there are three factors that are essential in a
family farming operation: That the family makes all the management
decisions; that the family provides all or most of the labor--that does
not preclude the hiring of some help sometimes or maybe even a little
bit of help for a long period of time; but still most of the labor
being done by the family--and, thirdly, that the capital, whether it is
self-financed or whether it is borrowing from the local bank or from
another generation within the family, is controlled by the family
farmer--the management by the family, the labor by the family, and the
capital controlled by the family.
Some people would say: Well, you have a lot of corporate farms. I do
not know what percent, but we do have corporate family farms. But that
is a structure they choose to do business in, especially if they have a
multigenerational operation to pass on from one generation to the other
and want to with a little more ease.
In addition, some people would say: Well, you have a lot of corporate
agriculture. You might have a lot of corporate agriculture in America,
but I do not see a lot of corporate agriculture, at least in grain
farming in my State of Iowa--mainly because most corporate people who
want to invest their money do not get the return on land and labor
through grain production that they normally want for a return on their
money. Of course, that strengthens the opportunity to family farm. But
at least when I talk about the family farmer, that is the definition
that I use.
In my State, the average family farm is about 340 acres. We have
about 92,000 farming units in my State. By the way, if we do not get
this agricultural economy turned around, we are going to have a lot
less than 92,000 in a few months, as well.
Nationwide, there are about 2 million family farming operations with
an average acreage of about 500 acres. So the average family farm size
nationally is bigger than in my State. But remember, whether you farm
10,000 acres as a cattle farmer in Wyoming or 2,000 or 3,000 acres as a
wheat farmer in Kansas or 350 as a corn, soybean, or livestock
operation in my State of Iowa, it still is one job or maybe two jobs
being created with all that capital investment.
Let me tell you, it takes a tremendous amount of capital--both
machinery as well as land--to create one job in agriculture compared to
a factory, and many times more than for a service job. So those are the
family farmers I am talking about whom I want to protect.
Earlier in this debate there was some hinting about the problems of
the farmers being related directly to the situation with the 1996 farm
bill. I am not going to ever say that a farm bill is perfectly written
and should never be looked at, but I think when you have a 7-year
program, to make a judgment after 3\1/2\ years that it ought to be
changed, then what was the point in having a 7-year program in the
first place?
It was that we wanted to bring some certainty for the family farmer
without politics meddling in their business. A 7-year program was
better than a 4- or 5- or 6-year program. So we wanted to bring some
certainty to agriculture.
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Obviously, a 7-year program does that more so than a shorter program.
So a family farm manager would not have to always be wondering, as he
was making decisions for the long term: Well, is Washington going to
mess this up for me as so many times decisions made by bureaucrats in
Washington have the ability to do?
So I am saying some people here are hinting at the 1996 farm bill
being that way. Others of us are saying that the trade situation is the
problem because farmers have to sell about a third of their product in
export if they are going to have a financially profitable situation.
I want to quote from Wallaces Farmer, January 1998, in which there
were tremendous prospects, even just 18 months ago, before the
Southeast Asia financial crisis was fully known, for opportunities for
exports to Southeast Asia. That situation for the farmer was further
exacerbated by the problems in Latin America. So I want to quote, then,
a short statement by a person by the name of John Otte: ``World
financial worries rock grains.''
``Expanding world demand, particularly in Asia, is the
cornerstone of the case for continued strength in corn, wheat
and soybean prices,'' points out Darrel Good, University of
Illinois economist.
Quoting further from the article:
Asian customers bought 57% of our 1995-96 corn exports, 66%
of our 1996-97 corn exports and almost 50% of our wheat
exports in both years. They [meaning Asian markets] are
important markets. No wonder Asian currency and stock market
problems bring grain market jitters.
``Signs of stability in Asian financial markets as central
banks intervened to support currency values brought a sigh of
relief to U.S. commodity markets,'' says Good.
``Whether late fall problems represent an economic hiccup
or the beginning of more serious problems is still unknown.
However, the developments underscore the importance of Asian
markets for U.S. crops.''
We know the end of that story. The end of that story is that we did
have that collapse of markets. And it very dramatically hurt our
prosperity in grains in the United States last year, and more so this
year.
Now, just to put in perspective the debate today, because there is so
much crepe-hanging going on, particularly from the other side of the
aisle, there is a quote here by Michael Barone of the August 28, 1995,
U.S. News and World Report. One sentence that will remind everybody
about the greatness of our country and our ability to overcome some of
the problems we face comes from an article called ``A Century of
Renewal.'' It is a review of the 1900s. He says:
There is something about America that makes things almost
always work out very much better than the cleverest
doomsayers predict.
So for my colleagues, particularly those on the other side of the
aisle who want to hang crepe and want to talk about the disastrous
situation we are in right now, I do not want to find fault with their
bringing to the attention of our colleagues the seriousness of that
problem. But they should not leave the impression that there is no hope
because this is America. We have gone through tough times before. All
you have to do is remember 1985 and 1986 in agriculture and the 1930s
in agriculture. Yet the American family farm that was the institution
then--probably on average back in those days of only about 150 acres
nationwide; today that is 500 acres nationwide--was a smaller
operation, but remember, it was still run by the family farmer, the
family making the management decisions, the family controlling the
capital, and the family doing the labor.
Please remember that, even the most cleverest of doomsayers here
today: Don't give up on America. Don't give up on American agriculture.
Don't give up on the family farmer. We are in a partnership during the
period of time of this farm bill. We have to meet our obligations, and
that is what this debate is about. But this debate ought to be about
hope for the family farmer as well.
I rise in support of our family farmers. Agriculture producers are in
desperate need of immediate assistance. We need to find the best
options available in these trying times. The Democrat proposal attempts
to address the problems confronting our family farmers but, I think,
falls short of our most important goal, which is providing assistance
as quickly as possible.
I realize this disaster affects farmers all across the Nation, but at
this moment I am most concerned about my friends and neighbors back
home. I am concerned that the Democrat alternative, by tying revenue
relief to the LDP payments, will delay the efficiency of delivering the
payment, unlike the transition payment which is more efficient.
The Democratic alternative offers provisions that would have a long-
term effect upon agriculture. I don't want anyone to misunderstand me
on that point. There are many things we can do to improve the
agricultural economy, but the task before us today is to develop and to
pass a short-term relief package that we can get out to those in need
as quickly as possible.
According to the Farm Service Agency's estimate, the transition
payments provided to corn growers this year will pay out at a rate of
36 cents per bushel. The supplemental transition payment Republicans
are offering will equal an additional 36-cent increase on every bushel
of corn produced this year. That is 76 cents in assistance for Iowa
family farmers, before you figure in any income through the loan
deficiency payment.
As a Senator from my State of Iowa, I believe it is also particularly
important to include language providing relief for soybean growers who
are not eligible for the transition payments. That is why our proposal
also contains $475 million in direct payments to soybean and other
oilseed producers. I am proud to say that Iowa is No. 1 in the Nation
in the production of soybeans, but our growers have been hard hit by
devastatingly low prices. Prices for soybeans are the lowest they have
been in nearly a quarter of a century, down from the $7-a-bushel range
just a couple of years ago to less than $4 today, which is way, way
below the cost of production. That is why I and other Senators
representing soybean-producing States wanted to make sure that soybean
growers were not left out of any relief package.
Finally, the Democrat proposal falls short in another very important
area. I think it undermines our U.S. negotiating objectives in the new
multilateral trade negotiations that the United States will launch
later this year. It will sharply weaken, and perhaps destroy, our
country's efforts to limit the enormously expensive European Union
production subsidies that make it impossible for our farmers to sell to
the 540 million European consumers.
I will say a brief word on that point. First, the United States just
presented four papers to the World Trade Organization in Geneva
outlining U.S. objectives for the new agriculture negotiations starting
this fall. The first of these papers deals with domestic support. It
states that the United States negotiating objective with regard to
domestic support is a negotiation that results in ``substantial
reductions in trade-distorting support and stronger rules that ensure
all production-related support is subject to discipline.''
Production-related payments are by definition trade distorting. They
are exactly the kind of payments that we want the European Union to get
rid of. I don't know how we can enter into tough negotiations with
Europeans, with their production payments our No. 1 negotiating target,
while we boost our production-related payments at the same time, which
is what is done with part of the money under the Democrat proposal.
This would undermine our negotiators and give the Europeans plenty of
reason to hang tough and to not give an inch.
My second point is closely related to the first. We will measure
success at the new world trade talks based on how well we do at
creating an open global trading system. The European Union's common
agricultural policy nearly torpedoed world trade negotiations as early
as 1990. The European Union later said it was reforming its common
agriculture policy, but farm handouts this year in the European Union
will reach $47 billion, nearly half of the entire European Union
budget. Moreover, the largely production-based European Union subsidies
still help those who least need help. Twenty percent of the European
Union's richest farmers receive 80 percent of the common agriculture
policy handout.
World farming is sliding deeper into recession with prices of some
commodities at historic lows. Now is not the
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time to give up on pressing the European Union hard to truly reform
this vastly wasteful subsidy program in their continent. But that is
exactly what we would end up doing if we go down the same road of tying
part of these payments to production, as the Democrat alternative would
do.
There are many enemies of agriculture market reform in the European
Union who are just looking for any circumstance to justify their
special pleading and to combat and counteract United States negotiators
in order for the European Union to keep their production subsidies
going. I am afraid that is exactly what the Democrat plan would do. I
think as chairman of the International Trade Subcommittee, I have a
responsibility to tell my colleagues this.
We should not hand the European Union an excuse to back away from
real reform that opens the European Union's huge agricultural markets
to American farmers.
The proposal that we pass today should be the fastest and most
efficient option available to help our family farmers. The most
important thing we can do today is to work towards providing emergency
revenue relief to our farmers as quickly as possible.
It is for that reason I urge my colleagues to vote for our Republican
alternative, to provide ample and immediate relief for hard-hit
farmers, assuming we are not able to work out some sort of bipartisan
agreement between now and that final vote.
I only ask, in closing, for people on the other side of the aisle who
are criticizing the 1996 farm bill to remember that what we call the
1996 farm bill relates mostly to agricultural programs and totally to
the subject of agriculture. We need to look beyond that basic
legislation and realize there were a lot of things promised in
conjunction with that farm bill through public policy that we have not
given the American farmer, which makes it difficult to say we have
fully given the American farmer--the family farmer--the tools he or she
needs to manage their operation in the way they should.
Yes, we have given them the flexibility to plant what they want to
plant without waiting for some Washington bureaucrat to do that. We
have given them the certainty of a certain transition payment every
year, from 1996 through the year 2002. We have told them, with the 7-
year farm program, that they have 7 years where we are going to have
some certainty, political certainty, in Washington of what our policies
are. But we also promised them more trading opportunities.
We have not made the maximum use of the Export Enhancement Program so
that we have a level playing field for our farmers. We have not given
the President fast track trading authority so that in the 24 agreements
that have been reached around the world among other countries we could
have been at the table, and haven't been at the table, and that there
is no President of the United States looking out for U.S. interests in
those negotiations; and for the sake of the American farmer, we should
be at some of those tables--at least those tables where agriculture is
being talked about.
We have not given the farmer the regulatory reform that has been
promised. And from the standpoint of taxes, we haven't given the farmer
the opportunity, through the farmers savings account, to level out the
peaks and valleys of his income by being able to retain 20 percent of
his income to tax in a low-income year, so that he is not paying high
taxes one year and no taxes another year. We haven't given him the
ability to do income averaging without running into the alternative
minimum tax. We haven't reduced the capital gains tax enough. And we
still have the death tax, the estate tax, which makes a lot of family
farmers who want to keep the farm in the family sometimes have to sell
the farm to pay the inheritance tax, instead of keeping the family farm
and passing it down from one generation to another. Sometimes, if they
can't afford to do that, they either make their operation so
inefficient that they close down business or else they have a terrific
tax burden over them as well.
So here we have an opportunity to--in the spirit of the 1996 farm
bill, when we told the farmers of America we were going to have a
smooth transition over the next 7 years, we said to them we are going
to set aside $43 billion for each of those next 7 years--not for each,
but cumulative for those 7 years. This year, it is $5.6 billion. Well,
we look back now, and in 1996 we did not anticipate the dramatic drop-
off in exports because we could not have predicted the Southeast Asian
financial crisis and the contagion that caught on in Latin America. So
we are going back now, unapologetically, on keeping a promise to the
family farmers that we are going to keep this smooth transition we
promised them, and that is what the amount of money we are talking
about here on the floor is all about.
The PRESIDING OFFICER. Under the previous order, the Senator from
North Dakota is recognized.
Mr. DORGAN. Mr. President, I have waited some while to be able to
speak on these disaster bills and on this general issue. I am very
pleased to have the opportunity for my colleague from New York who
asked if I would yield for a minute for a question. I am happy to do
that.
Mr. SCHUMER. First, I thank the Senator from North Dakota and
Senators Harkin and Daschle for the farm aid amendment, and for their
hard work. This measure will help farmers across the country, including
the farmers of New York State, who were hard hit by drought and last
year's storms.
We are in the midst of the worst drought since the Dust Bowl in my
State. There is not a penny of relief for farmers with drought
assistance. This drought is affecting farmers throughout the Eastern
United States. When I meet with farmers in New York who tell me they
are facing unprecedented losses, they are now pointing to letting
fields die off to conserve water, or other fields. We can't do anything
about the rain, but the Democratic amendment would increase section 32
funding to give farmers some relief from the devastation on the farm
and would increase funding for the disaster relief fund--something that
would help New York's apple and onion farmers who faced tens of
millions in losses last year.
In urging my colleagues to support the Democratic amendment, I simply
ask the Senator from North Dakota, am I correct in assuming that the
Democratic amendment does have this kind of drought relief, which is
not in the other bill?
Mr. DORGAN. The Senator from New York is correct. That is one of the
distinctions between these two pieces of legislation. As the drought
spreads across the eastern seaboard and other parts of the country and
begins to devastate producers there, there needs to be some disaster
relief. We have two pieces of legislation proposed today, one of which
has no disaster relief at all, even in the face of this increasingly
difficult drought.
So the Senator from New York, speaking on behalf of producers who are
hard-hit in New York, is certainly accurate to say that the amendment
we have offered provides drought relief and the alternative does not.
Mr. SCHUMER. I thank the Senator for his generosity.
Mr. DORGAN. Mr. President, this is not about Republicans and
Democrats. I start by saying to my colleague from Iowa that I hope,
whatever comes from all of this debate, at the end of the time we can,
as Republicans and Democrats, find a way to provide appropriate relief
to people who are hurting. There is not a Republican or a Democratic
way to go broke on the family farm. The destruction of hopes and dreams
on the family farm is something that is tragic and something to which
we need to respond.
This is not of the family farmers' making. They didn't cause prices
to collapse or the Asian economies to have difficulty, and they didn't
cause a wet cycle or crop disease. It is not their fault. We must, it
seems to me, respond to it. But it is appropriate, I think, for there
to be differences in the way we respond. There is a philosophical
difference in the way we respond. Also, there has been a difference in
the aggressiveness and interest in responding. I know that if this kind
of economic trouble were occurring on Wall Street or in the area of
corporate profits, we would have a legislative ambulance, with its
siren, going full speed in trying to find a solution. It has not been
quite so easy because it is family farmers.
Darrel Sudzback is an auctioneer from Minot, ND. Blake Nicholson, an
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Associated Press writer, wrote a piece the other day. He said:
Darrel Sudzback likens farm sales to funerals. He said,
``If you don't know the deceased, you are not likely to get
emotional.'' But more often than not these days, auctioneers
must help a friend or a neighbor sell off a lifetime of hard
work. Marvin Hoffman says, ``It just hurts me to do this.
When they hurt, I hurt.'' With many families [Mr. Nicholson
writes] sliding deeper into an economic nightmare, the number
of farm sales in North Dakota continues to rise. ``It used to
be,'' one auctioneer said, ``that a farm auction was kind of
like a social event, a joyful event when somebody was
retiring.'' Julian Hagen said that he conducted auction sales
for 43 years, but he said, ``Now there is a different
atmosphere at auction sales. If people know that a man is
forced out, that is not a good feeling. It is tough to deal
with when you have known a family farmer for quite a few
years, and now they have to give up a career or property
they have had in the family for generations. I try to stay
as upbeat as I can. Bankers in north-central North Dakota
say that area has been hit by 5 years of flooding and crop
disease, and many farmers have been forced off the land.
People need to think of this problem in terms of not only lost
income, but assume you are on a farm and you have a tractor; you have
some land; you have a family; you have hopes and dreams. You put a crop
in the ground and see that this is what has happened to your income--to
your price.
Then on top of that, add not only collapsed prices, but add the worst
crop disease in this century--the worst in a century in North Dakota.
On top of that, add a wet spring so that 3.2 million acres--yes, I said
3.2 million acres--of land could not be planted. It was left idle. Add
all of those things together, and you have a catastrophe for families
out there struggling to make a living.
Will Rogers was always trying to be funny. He used to talk about the
difference between Republicans and Democrats. He said on April 6, 1930,
``Even the Lord couldn't stand to wait on the Republicans forever.''
He was talking about the farm program.
There is a difference, it seems to me. There is a difference between
Republicans and Democrats in how we construct a solution to the
disaster and the crisis, and how we feel the underlying farm bill
should be changed.
Will Rogers also said, ``If farmers could harvest the political
promises made to them, they would be sitting pretty.''
I want to talk a bit about those political promises--the political
promises given farmers early on to say that we want to get rid of the
farm program as we know it in this country, get rid of the safety net
as we know it, and create something called ``transition payments''
under the Freedom to Farm bill.
I mentioned yesterday that the title was interesting to me. Sometimes
titles can change how people perceive things notwithstanding what might
be the real part of a proposal. Early on when people began to sell
insurance in this country, they called it death insurance. You know,
death insurance didn't sell too well. So they decided that they had
better rename it. So they renamed it life insurance, and it started
selling. It was a better name. It is a product that most Americans need
and use.
It is interesting. What is in a name. The name for the farm bill a
few years ago was Freedom to Farm. We passed a Freedom to Farm bill.
The wheat price slump on this chart may be unconnected, or maybe not to
Freedom to Farm.
Here are the wheat prices before--Freedom to Farm--and wheat prices
since. Chance? Happenstance? Maybe. Maybe not. Maybe we face a
circumstance in this country where the underlying farm bill was never
designed to work and allowed for collapsed prices. Maybe that is the
fact.
I want to begin with a bit of history.
About 40 years ago, a biologist by the name of Rachel Carson wrote a
book that in many ways changed our country. It was called ``The Silent
Spring.'' The book documented how the products of America's industrial
production were seeping into our country's food chain. The modern
environmental movement was also from Rachel Carson's book, ``The Silent
Spring.''
Today we face another ``silent spring'' in this country. Like the
first, it is of a human making. But it is not about birds, and it is
not about fish. It involves our country's independent family farmers
and producers. It involves our social habitat--the farm communities of
which family farmers are the base.
We know that family farmers are hurting. In fact, many would consider
it an extraordinary year if they had any opportunity at all to meet
their cost of production. I know of cases that break my heart--people
who have fought for decades, and now are losing everything they have.
What is worse is that some opinion leaders are starting to throw in the
towel. They say, well, maybe family farming is a relic of the past.
Maybe it is not of value to our country anymore. Maybe it is time to do
something else.
I don't buy that at all. I think one thing we can say about the
future is that people will be eating. The world's population is growing
rapidly. Every month in this world we add another New York City in
population. Every single month, another New York City in population is
added to our globe. We know there is no more farmland being created on
this Earth. It doesn't take a genius to put those two together.
Mr. SARBANES. Will the Senator yield?
Mr. DORGAN. I am happy to yield.
Mr. SARBANES. I want to underscore the point the distinguished
Senator from North Dakota is making.
Yesterday, I had the opportunity to go with Secretary Glickman and
Governor Glendening to visit one of the farms that has been affected by
the drought in our State. It is devastating to see. Of course, it is a
compound of two things: The low commodity prices, which the Senator is
demonstrating with his charts--this is not only wheat but the same
thing applies to other basic commodities as well--and the drought,
which is crippling certain parts of the country.
We talked to this farmer who has been farming ever since he was a
young boy. His father was a farmer. His grandfather was a farmer. He
doesn't know whether he will be in farming next year because of what
has hit them--the combination of the low commodity prices and the
drought which is now desperately affecting our country.
He is not alone. Farmers across Maryland and indeed, the nation, are
finding themselves facing similar circumstances. Nearly one fourth of
Maryland's corn crop is in poor to very poor condition. Likewise, 55
percent of pastures and hay fields are in poor or very poor condition.
Milk production has decreased because of the high temperatures. And
because pastures and field crops are in such bad shape, cattle and
dairy farmers are now faced with a dilemma, whether or not to sell
their animals or begin feeding them hay which should be utilized over
the winter.
Maryland has suffered extensive drought damage for three consecutive
years. However the drought this year is by far the worst since the
depression. Yesterday, the United States Geological Survey reported
that we may be in the midst of what could become the worst drought of
the 20th century. Rainfall throughout Maryland is currently between 40
and 50 percent below normal. Throughout Maryland, counties are
reporting losses as high as 100 percent for certain crops. Most
alarmingly, there is no end in sight.
But the crisis affecting agriculture is about more than the drought.
The dramatic drop in commodity prices, since the enactment of the
Freedom to Farm Act, has had its affect on farmers throughout the
country and the State of Maryland. The poultry industry, which is
Maryland's largest agricultural producer, has witnessed a 45-percent
decrease in exports. The situation for farmers is bleak and many are
losing their businesses.
Mr. President, Maryland depends on agriculture. Agriculture is
Maryland's largest industry contributing more than $11 billion annually
to our economy. More than 350,000 Marylanders--some 14 percent of our
State's workforce--are employed in all aspects of agriculture from farm
production of wholesaling and retaining. Forty percent of our State's
land is in agriculture--more than 2 million acres. So when our family
farmers and the farm economy start hurting--everyone suffers.
Our farmers are in trouble and they deserve our assistance. This
measure provides that assistance in the form of direct payments and low
interest loans.
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It gives nearly $11 billion in emergency assistance to farmers and
ranchers who have been affected by natural disaster and economic
crisis. $6 billion of that amount will deliver income assistance to
farmers hit hard by the economic disaster. And more than $2.6 billion
will be used to address natural disasters such as the drought. Within
the disaster funds, nearly $300 million in section 32 and disaster
reserve funds has been included to specifically address the Mid-
Atlantic drought.
Mr. President, the need for this amendment is real. Until we are able
to reform the Freedom to Farm Act or manufacture rain, these funds are
vital to the preservation of the farm industry throughout the State of
Maryland and the United States.
In my judgment, it is imperative that we pass this legislation.
I very much appreciate the Senator from North Dakota yielding. I want
to underscore the crisis nature of the situation to which he is
referring.
I want to acknowledge the consistent and effective leadership which
he has exercised on many of these farm issues. He and others of us
expressed concerns and questions at the time the 1996 act was passed.
Much of that now seems to have come around to hit us--compounded, of
course, by these serious weather circumstances which exist not in all
parts of the country but in certain parts of the country.
I thank the Senator for yielding.
Mr. DORGAN. I thank the Senator from Maryland. He is talking about a
drought which is devastating part of our country even as collapsed
prices have been devastating wheat farmers and the grain farmers in my
part of the country.
I want to respond to some things that were said earlier today that
somehow we are not as efficient as we need to be as family farmers.
In my judgment--and I think the evidence supports this--the family
farmer in our country is as productive as any in the world. It supports
our rural communities in ways that corporations never will and never
can.
Family farmers have faced hard times before. This is not something
new. The history of farming is a history of difficulty. But never
before has the Federal Government done so little to help and so much to
push the producer off the edge.
On top of the floods that we have talked about and the drought and
the slump in the foreign markets, our farmers are facing a plague of
deliberate public policies--yes, established here in Washington--that
undermine their economic interest. They face trade agreements designed
for the convenience of food processors rather than food producers. They
face a ``see-no-evil'' posture toward antitrust enforcement that has
left family farmers selling into controlled markets that dictate the
terms to them. On top of that, they face a 1996 farm bill that
fundamentally doesn't and can't work.
There is a larger issue than dollars and cents; namely, the kind of
country we are going to be.
It is not fashionable to raise all of these issues. We are supposed
to keep our mouths shut and cash in on the stock market which has done
quite well. But the Founding Fathers didn't create this country
primarily to be an engine of stock market riches or rising gross
domestic product. They created this country to promote a way of life
based on freedom and democracy and independent producers in contrast to
the aristocracy they left behind in Europe.
The concept of independence and freedom was rooted in the land, and
they couldn't conceive of these things being separate.
Wendell Berry, a farmer, testified recently in Washington at a
hearing that I chaired. He said:
Thomas Jefferson thought the small land owners were the
most precious part of state, and he thought government should
give priority to their survival. But increasingly, since
World War II our government's manifest policy has been to get
rid of them. This country is paying a price for this. That
price doesn't show up on the supermarket shelves but rather
our Nation's spirit and our character.
Independent family-based agriculture produces more than wheat, beef,
and pork. It produces a society and a culture, our main streets, our
equipment dealers, our schools, our churches, and our hospitals. It is
the ``culture'' in agriculture. Take away family-based producers and
all that is left are calories. That is a radical change in our country.
I am not talking about rural sentimentalism or nostalgia. It is
something we know from experience. Rural communities work. They have so
many of the things the Americans all over this country say they want,
including stable families, low crime rates, neighborliness, a volunteer
spirit.
In my hometown of Regent, ND, they still leave the keys in the car
when they park on Main Street. Try doing that here. Many Americans have
plenty of food on their tables, but what they feel is a growing dearth
of the qualities that they want most are the qualities that farm
communities represent. It would be insane, in my judgment, to stand by
and let these communities wither on the vine by neglecting the economic
base that sustains them.
Yes, the Nation's financial establishment is enthused about that
prospect. It can't wait to turn hog barns into agrifactories and more.
However, that will not advance this country's interests. We can't stop
bad weather and we can't stop unruly markets, but we can change Federal
policies that turn adversity into quicksand for family farmers.
I listened to a ringing defense of the current farm program. I
listened to one of my colleagues who was an economist, and I mentioned
before I used to teach economics but was able to overcome that and go
on to think clearly. There is an interesting debate among economists
about all of these issues. First, is there a crisis? Listening to part
of the debate this morning one would think there is nothing wrong on
the family farm. Is there a crisis? Would anyone in this country be
feeling there is a crisis if this is what happened to their income? If
any sector of the American economy had this happen to their income,
would they consider it a crisis? The answer is, of course.
I had a farmer come to a meeting who farmed the lands that his
granddad farmed, his dad farmed, and he farmed. He stood up and said:
For 23 years, I farmed this land. His chin began to quiver and his eyes
began to water. He could hardly speak. He said: I'm going to have to
leave this farm.
Anyone could tell he loved what he did. He was going to lose the farm
that his granddad, dad, and he had farmed for those many decades. Is
that a crisis? I think so.
In my State, add to the fact that incomes have collapsed because of
price collapses, 3.2 million acres were not planted because of wet
conditions in the spring--3.2 million acres. A young boy wrote some
while ago and said: My dad could feed 180 people and he can't feed his
family.
Is that a crisis? Of course.
Why the crisis? I mentioned collapsed prices and a wet spring and the
worst crop disease in the century in our part of the country. This
notion of a farm bill that says the free market shall determine what
happens in agriculture, by cutting the tether and turning it all loose,
finds you scratching your head and wondering, gee, why didn't this work
out the way we thought? Because the market isn't free. It never has
been free and never will be free.
That bill that says we will transition farmers out of any help, over
7 years that bill transitions farmers into a marketplace that is fixed.
Does anybody know what kind of tariff we have putting beef into Japan
at this moment? I guess it costs $30 or $35 a pound to buy T-bone steak
in Tokyo. Does anybody know what tariff exists on beef going into
Japan? Very close to 50 percent. That is a failed free market by any
definition anywhere. That is after we reached an agreement with them 10
years ago.
How about China? They consume half the world's pork. Are
we delivering a lot of hogs into China? No, we have a $50 billion to
$60 billion trade deficit with China and we are not exporting enough
hogs into China.
What about wheat in Canada? No. I drove to the border of Canada with
a truck and couldn't get the wheat into Canada. I stopped at the
border, and all the way to the border, semitruckload after
semitruckload after semitruckload was coming into this country, hauling
Canadian grain into our country and undercutting our farmer's prices.
We sit at the border trying to go north, you can't. The border coming
south is flooded by millions
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of wheat acres, unfairly subsidized, sold to us by a Canadian wheat
board. It is a state monopoly and would be illegal in this country,
with it's secret prices. Our trade officials downtown wouldn't lift a
finger--never have and never will--to deal with the unfair trade
practices.
I mention Japan, China, and Canada. I could list other countries for
an hour, but I won't. Then we say to the family farmers, operate in a
free marketplace. That is what we have created, a marketplace that is
fundamentally corrupt with respect to fairness to our family farmers.
My colleague this morning, Senator Conrad, talked about the Europeans
subsidizing exports to the tune of ten times our subsidies. Is that
fair competition? I don't think so.
Over and over and over, if it is not just unfair competition in
selling, selling into our marketplace with products that ought not be
allowed, produced with growth hormones or produced with chemicals that
we wouldn't allow to be used in this country on animals or grains--that
happens every day in every way.
We produce canola in this country and we are prevented from using a
chemical on the canola that we would purchase from Canada because that
chemical can't be allowed into the country. However, the Canadians can
use that chemical on their canola, plant the canola, harvest it, and
ship it into Belfield, ND, to put it at a crushing plant, crush it, and
put it into our food chain.
My farmers say: Why is that the case? What is going on here?
What is going on here is family farmers have been set up in every
single way, set up for failure.
I heard this morning what was being proposed here was socialism. I
heard what was being proposed here was being proposed by a bunch of
leftists. I heard what was being proposed here was being proposed by
people who don't believe in the principles of economics. I sat here and
thought, that is novel; an interesting, pithy new political debate
calling people socialists or leftists. Or maybe it isn't so new. Maybe
it is just a tired, rheumatoid, calcified debate by people who can't
think of anything else to say.
Deciding to stand up and help family farmers in a time of crisis and
trouble is socialistic? Are you kidding me? It is everything that is
right about the instincts of this country.
When part of this country is in trouble, the rest of the country
moves to help. I wasn't there, but in the old wagon train days when we
populated the western part of this country with wagon trains, one of
the first lessons learned was don't move ahead by leaving somebody
behind. That is an indelible lesson. The same is true with this country
and its economy. Don't move ahead by leaving some behind. When family
farmers are in trouble, we have a responsibility to help, not crow
about socialism and leftists. What a bunch of nonsense.
The fact is, the same kind of debate includes this: We are no longer
the most efficient in farming. I heard that this morning. We are no
longer the most efficient in farming. Nonsense. Show me who is better.
Tell me who is better. I am sick and tired of this ``blame America
first'' notion. We lose because we are no longer the most efficient.
Tell me who is more efficient anywhere else in the world. Stop blaming
this country first for everything.
If we had a free market, if we had open markets, if we had fair
competition, if we didn't have policymakers setting up family farmers
for failure, and if they paid as much attention to the family economic
unit--which apparently has no value to a lot of folks in this country--
as we do for the corporate economic unit, maybe we would see some
policies that would say to family farmers, you matter in this country's
future and we want to keep you.
I do not understand much of this debate, except we face the
requirement to do two things, and we need to do them soon. First, we
must respond to a farm crisis. That is the purpose of the two bills on
the floor of the Senate today. We do it in very different ways.
As my colleague from New York mentioned, the majority party bill
doesn't even respond to any part of the disaster; there are no disaster
provisions at all. Of course, we have a substantial part of this
country now facing a serious drought, so it is a very serious problem.
We have very different ways in which we provide income support to
family farmers. The majority party follows the Freedom to Farm bill,
which of course is a total flop, total failure. It gives payments to
people who are not producing. It says: You are not producing; you are
not in trouble; you don't have any crop; here's some money. What kind
of logic is that? It doesn't make any sense.
We propose a mechanism by which we provide help to people who are
producing and are losing money as a result of that production, trying
to provide help to shore up that family farm. Our position is simple.
When prices hit a valley, we want a bridge across that valley so family
farmers can get across that valley. We want to build a bridge, and
other people want to blow up the bridge. But if we don't take the first
step to provide some crisis and disaster relief and then follow it very
quickly in September and October, as I discussed with my colleague from
Iowa and others, with a change in the underlying farm bill, we will not
have done much for farmers.
Farmers say to me: We very much appreciate some disaster help, but it
will not provide the hope that is necessary for me to plant a crop and
believe that I can make it. We need a change in the farm bill. We need
a safety net that we think has a chance to work for us in the future.
Mr. HARKIN. If the Senator will yield?
Mr. DORGAN. I will be happy to yield.
Mr. HARKIN. First, I thank the Senator from North Dakota for his
statement, which is exemplary in its clarity. The arguments the Senator
has made, the point he made, this should crystallize clearly what this
debate is all about, what is happening, what we are all talking about.
I picked up on one thing the Senator said--that under the
Republican's proposal the payments would go out without regard to
whether someone was producing anything or not; it could actually go out
to absentee landlords, people who are not on the farm, hadn't even
planted anything.
As the Senator knows, the AMTA payments that are in their bill go out
without regard to whether they are planting anything or not. It is
based upon outdated, outmoded provisions of base acreages and proven
yields. It goes back as far as 20 years.
I wonder if it occurred to the Senator from North Dakota--I heard a
couple of Republicans this morning talk about the failed policies of
the past. Yet they are basing their payments on a policy that goes back
20 years, base acreages and proven yields, which any farmer will tell
you has no basis in reality as to what is going on in the farm today.
I am curious. Does the Senator have any idea why they would want to
make payments based on something that is not even happening out there
today? It is not even based on production, not helping the family
farmer. I am still a little confused as to why they would suggest that
kind of payment mechanism rather than what we are suggesting, which
goes out to farmers based on the crops they bring in from the fields.
Mr. DORGAN. The payment mechanism is called an AMTA payment or a
transition payment. This would actually enhance the transition payment.
The purpose of a transition payment, by its very name, is to transition
family farmers out of a farm program. It said: Whatever your little
boat is, let it float on whatever marketplace exists out there. The
problem is, they declare it a free market when in fact it is a market
that is totally stacked against family farmers. So family farmers
cannot make it in this kind of system.
This farm bill that provides transition payments is a faulty concept.
Yet even for disaster relief, they cling to this same faulty concept of
moving some income out largely because, I think, they are worried, if
they do not cling to that, somehow they will be seen as retreating from
the farm bill. I would say: Retreat as fast as you can from a farm bill
that has put us in this position on wheat prices.
You may think it is totally unfair to say wheat prices have anything
to do with the farm bill. I don't know. Maybe this is pure coincidence.
Maybe it is just some sort of a cruel irony that we
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passed a new farm bill and all these prices collapsed. But the point
is, I was hearing this morning discussions from people who were
standing up to say things are really good on the family farm. I did not
look closely at their shoes to see whether they had been on a family
farm recently. They looked as if they were wearing pretty good pants
and shirts and so on. It occurred to me, if things are so good on the
family farm, why are we seeing all these farm auctions and all this
misery and all this pain and agony with family farmers losing their
lifetime of investment? Why? Because prices have collapsed. Things are
not good on the family farm. The current farm bill doesn't work.
People stand here--I guess I can listen to them--they stand here for
hours and tell us how wonderful things are and how much income the
current farm bill is spreading in rural America. I would say, however
much income that is, it does not make up for the radical, total
collapse of the grain markets. What has happened is, we have a payment
system that says, under Freedom to Farm, when prices are high, you get
a payment that you do not need, and when prices are low, you don't get
a payment that is sufficient to give you the help you need.
Mr. HARKIN. If the Senator will yield further, the Senator has stated
it absolutely correctly. I was interested in the chart there of wheat
prices. I ask the Senator if he would put it back up there again, on
wheat prices. It just about mirrors corn and soybeans, all the major
production crops in the Southwest.
I have an article from the Wichita Eagle, from 1995, I believe. It is
an article written by the distinguished Senator from Kansas. I think he
was a House Member at the time, Senator Roberts. So this article says:
Good Bill for Farm Reality, by Pat Roberts.
The first sentence says:
My Freedom to Farm legislation now before Congress is a new
agricultural policy for a new century.
``My Freedom to Farm. . . .'' That is by Pat Roberts, now Senator
Roberts. I want to read to the Senator from North Dakota this paragraph
in there. He says:
Finally, Freedom to Farm enhances the farmer's total
economic situation. In fact, the bill results in the highest
net farm income over the next seven years of any proposal
before Congress.
He says:
The AMTA payment cushions the Nation's agriculture economy
from collapse during the 7-year transition process.
I have to ask my friend from South Dakota, are your farmers receiving
the highest net farm income that they have received ever in any farm
program? Are they receiving the highest farm income? And are your
farmers being cushioned by the Freedom to Farm bill?
Mr. DORGAN. I say to the Senator from Iowa, the answer to that
question is, clearly, farm income is collapsing. It is collapsing with
grain prices, with commodity prices generally, and family farmers are
put in terrible trouble as a result of it. Many of them are facing
extinction.
I have here a report from the Economic Policy Institute that
describes the almost complete failure of the current farm bill and
current strategy. It is written by Robert Scott. It is about an eight-
page report. I ask unanimous consent to have that printed in the Record
following my remarks.
The PRESIDING OFFICER (Ms. Collins). Without objection, it is so
ordered.
(See Exhibit 1.)
Mr. DORGAN. Let me make one final point, and then I will relinquish
the floor. I know my colleagues wish to speak.
This is a map of the United States. This map shows in red the
counties of our country that have lost more than 10 percent of their
population. It shows where people are moving out, not coming in. We
have cities growing in various parts of America, but in the center of
our country, in the farm belt of our country, we are being depopulated.
People are leaving. My home county, which is about the size of the
State of Rhode Island, was 5,000 people when I left, in population. It
is now 3,000. The neighboring county, which is about the same size, the
size of the State of Rhode Island, had 920 people last year. The fact
is, people are moving out. Why? Because family farmers cannot make a
living.
We have had other farm policies that have not worked. I mean we have
had Democratic and Republican failures. Both parties have failed in
many ways in farm policy.
It is just the circumstance today where we have farm prices, in
constant dollars, that are at Depression level; and we have a farm
program that, like it or not, was offered by the majority party that
does not work. It does not work at all in the context of what our needs
are to try to save family farmers.
We will have two votes today: One on a disaster package or a price
relief package that offers more help, and one that offers less; one
that offers some help for disaster relief, and one that does not.
A whole series of differences exist between these proposals. My hope
is that at the end of this day the Senate will have agreed to the
proposal that Senators Daschle, Harkin, Conrad, myself, and others have
helped draft and that we will be able to send a message of hope to
family farmers, to say, we know what is happening, we know we need
change. This is the first step. The second step, in September or
October, will be to force a fundamental change in our underlying farm
policy.
Madam President, I yield the floor.
Exhibit 1
Exported to Death
the failure of agricultural deregulation
(By Robert E. Scott)
In 1996, free market Republicans and budget-cutting
Democrats offered farmers a deal: accept a cut in farm
subsidies and, in return, the government would promote
exports in new trade deals with Latin America and in the
World Trade Organization (WTO) and eliminate restrictions on
planting decisions. In economic terms, farmers were asked to
take on risks heretofore assumed by the government in
exchange for deregulation and the promise of increased
exports.
This sounded like a good deal to many farmers, especially
since exports and prices had been rising for several years.
Many farmers and agribusiness interests supported the bill,
and it was in keeping with the position of many farm
representatives and most members of Congress from farm states
who already supported the WTO, the North American Free Trade
Agreement (NAFTA), and the extension of fast-track trade
negotiating authority, usually in the name of supporting
family farmers.
But for family farmers, the Omnibus Farm Bill--and the
export-led growth strategy upon which it was based--has been
a massive failure. The U.S. farm trade balance declined by
more than $13 billion between 1996 and 1998, and prices have
plummeted. August U.S. corn prices fell from $4.30 per bushel
in 1996 to $1.89, or 56%. Wheat prices fell from $4.57 per
bushel in 1996 to $2.46 in 1998, a drop of 46%.
The combination of export dependence and deregulation have
left increased numbers of family farmers facing extinction.
At the same time, U.S. agriculture becomes more centralized
in the hands of large farms and national and multinational
companies.
Contrary to the Department of Agriculture's rosy
predictions, the plight of farmers is likely to get worse
under current policies. Expanding supplies are likely to
outpace the growth in demand for U.S. farm products;
restricted access to foreign markets will continue; and the
strong dollar, actively supported by the U.S. Treasury, will
further depress the prices farmers receive for their goods.
It is time to end this cruel hoax on the American family
farmer. The U.S. government should: reduce the value of the
dollar in order to boost farm prices; shift subsidies away
from large farms and corporate farmers to independent,
family-run farms; increase expenditures for research,
development, and infrastructure; and support new uses for
farm products.
freedom to fail: the omnibus 1996 farm bill
For more than a half-century after the Great Depression,
government policies helped create a highly successful U.S.
agricultural sector by reducing risks to family farmers. Crop
insurance and disaster programs reduced production risk, and
a variety of price and income support programs, plus set-
aside programs that paid farmers to remove excess land from
production, reduced price risks. But the Omnibus 1996 Farm
Bill eliminated price and income supports and replaced them
with annual income payments, to be phased out, on a fixed
declining schedule, over seven years (Chite and Jickling
1999, 2). The 1996 farm bill also eliminated the set-aside
program, thus giving farmers, in the words of one
commentator, ``the freedom to plant what they wanted, when
they wanted. . . . With prices rising and global demand
soaring, lawmakers and farmers were happy to exchange the
bureaucratic rulebook for the Invisible Hand'' (Carey 1999).
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The rapid growth in U.S. agricultural exports--they more
than doubled between 1985 and 1996--encouraged many farmers
to buy into the deregulation strategy. But rising exports
have not translated into rising incomes. Due to globalization
and relentless declines in the real prices of basic farm
products, the structure of American agriculture has been
transformed, and, as a result, real U.S. farm income has been
steady or declining for many years despite the long-run trend
of rising exports.
In the two decades from 1978 to 1997, real grain prices
were slashed in half. Then, in 1998, prices fell an
additional 10-20%, pushing many family farmers to the brink
of bankruptcy.\1\ In this environment, only the largest and
most capital intensive farms are able to survive and prosper.
Growing concentration throughout the food chain
There are about 2 million farms in the U.S., but three-
quarters of those generate minimal or negative net incomes
(USDA 1996). Since farms with less than $50,000 in gross
revenues tend to be primarily part-time or recreational
ventures, this section analyzes working farms that generate
gross revenues in excess of $50,000 per year.
Within this group, the number of large farms is growing
while small farms are disappearing at a rapid pace, as shown
in Table 1. There were 554,000 working farms in the U.S. in
1993. More than 42,000 farms with revenues of less than
$250,000 per year disappeared between 1994 and 1997, a
decline of about 10%. Nearly 20,000 farms with revenues in
excess of $250,000 per year were added in this three-year
period, an increase of about 17%. Thus, the U.S. experienced
a net loss of about 22,000 farms between 1994 and 1997 alone.
TABLE 1.--CHANGES IN THE DISTRIBUTION OF WORKING FARMS, 1993-98
--------------------------------------------------------------------------------------------------------------------------------------------------------
Size class (annual sales)
--------------------------------------------------------------------------------------------------
$1,000,000
or more $500,000-$999,999 $250,000-$499,000 $100,000-249,999 $50,000-$99,999 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
1993................................................. 14,980 30,876 70,982 224,823 212,531 554,192
1997................................................. 18,767 34,764 82,984 207,058 187,831
Major Actions:
All articles in Senate section
AGRICULTURE RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND RELATED AGENCIES APPROPRIATIONS ACT, 2000--Continued
(Senate - August 03, 1999)
Text of this article available as:
TXT
PDF
[Pages
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AGRICULTURE RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND
RELATED AGENCIES APPROPRIATIONS ACT, 2000--Continued
Amendment No. 1500
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. Mr. President, I rise to support the amendment offered
on this side of the aisle because I think it meets all the income
deficiency needs of American agriculture pretty much in the same way as
the Democrat proposal does, but it also does not spend money in a lot
of other areas that do not meet the immediate needs of agriculture.
I have always thought of agriculture and the needs of food production
and the process of food and fiber production in America as kind of a
social contract between the 2 percent of the people in the United
States who earn their livelihood in farming and the rest of the 98
percent of the people, as well as a social contract of the last 60
years of some Government involvement and some Government support of
agriculture, particularly in times when income was very low.
Thinking of it as a social contract, then, I do not like to believe
there is a Democrat way of helping farmers or a Republican way of
helping farmers. I like to think of our being able to work together on
this social contract pretty much the same way we work together on
Medicare and Social Security--to get agreements when there are changes
made in those programs.
In those particular programs--and, thank God, for most agricultural
programs--there have not been dramatic changes over the years unless
there has been a bipartisan way of accomplishing those changes. So,
here we are, with a Democrat proposal and a Republican proposal. People
watching this throughout the country, then, have their cynicism
reinforced about how Congress does not cooperate.
While this debate has not been going on just today and yesterday but
over the last 2 or 3 months, there was an assumption that there would
be help for agriculture under almost any circumstances; it was just a
question of how to do it and exactly how much. While this debate was
going on, we have had different approaches, and it has brought us to a
point where we have a Republican proposal and a Democrat proposal and
we are talking past each other. I am hoping sometime before this debate
gets over today and we have a final document to vote on, that we are
able to get together in a Republican and Democrat way and have a
bipartisan solution, at least for the essential aspects of the debate
today, which is to have an infusion of income into agriculture
considering that we have the lowest prices we have had in a quarter
century.
I think there are two stumbling blocks to this. I think on the
Democrat side the stumbling block to bipartisan cooperation is a belief
among some of those Members that some of the money should find its way
to the farmers through changes in the LDP programs as opposed to the
transition payments. On our side, the stumbling block seems to be that
we are locked into no more than $7 billion to be spent on the
agricultural program.
So I hope somewhere along the line we can get a compromise on this
side and a compromise on that side of those two points of contention.
Hopefully, we on this side could see the ability to go some over $7
billion--and that the Democrats would see an opportunity to use the
most efficient way of getting all the money into the farmer's pocket
through the AMTA payments.
The reason for doing it that way is because we do have a crisis. The
best way to respond to that crisis is through that mechanism because
within 10 days after the President signs the bill, the help that we
seek to give farmers can be out there, as opposed to a convoluted way
of doing it through the LDP payment.
I do not know why we could not get a bipartisan compromise with each
side giving to that extent--Republicans willing to spend more money and
the Democrats willing to give it out in the way that most efficiently
can be done.
So I see ourselves right now as two ships passing in the night, not
speaking to each other. We ought to be able to get together to solve
this. That is my hope. I know there are some meetings going on about
that now. I'm part of some of those meetings. I hope they can be
successful.
In the meantime, talking about helping the family farmer, I think it
is very good to have a description of a family farm so we kind of know
what we are talking about. I am going to give it the way I understand
it in the Midwest, and not only in my State of Iowa.
But it seems to me there are three factors that are essential in a
family farming operation: That the family makes all the management
decisions; that the family provides all or most of the labor--that does
not preclude the hiring of some help sometimes or maybe even a little
bit of help for a long period of time; but still most of the labor
being done by the family--and, thirdly, that the capital, whether it is
self-financed or whether it is borrowing from the local bank or from
another generation within the family, is controlled by the family
farmer--the management by the family, the labor by the family, and the
capital controlled by the family.
Some people would say: Well, you have a lot of corporate farms. I do
not know what percent, but we do have corporate family farms. But that
is a structure they choose to do business in, especially if they have a
multigenerational operation to pass on from one generation to the other
and want to with a little more ease.
In addition, some people would say: Well, you have a lot of corporate
agriculture. You might have a lot of corporate agriculture in America,
but I do not see a lot of corporate agriculture, at least in grain
farming in my State of Iowa--mainly because most corporate people who
want to invest their money do not get the return on land and labor
through grain production that they normally want for a return on their
money. Of course, that strengthens the opportunity to family farm. But
at least when I talk about the family farmer, that is the definition
that I use.
In my State, the average family farm is about 340 acres. We have
about 92,000 farming units in my State. By the way, if we do not get
this agricultural economy turned around, we are going to have a lot
less than 92,000 in a few months, as well.
Nationwide, there are about 2 million family farming operations with
an average acreage of about 500 acres. So the average family farm size
nationally is bigger than in my State. But remember, whether you farm
10,000 acres as a cattle farmer in Wyoming or 2,000 or 3,000 acres as a
wheat farmer in Kansas or 350 as a corn, soybean, or livestock
operation in my State of Iowa, it still is one job or maybe two jobs
being created with all that capital investment.
Let me tell you, it takes a tremendous amount of capital--both
machinery as well as land--to create one job in agriculture compared to
a factory, and many times more than for a service job. So those are the
family farmers I am talking about whom I want to protect.
Earlier in this debate there was some hinting about the problems of
the farmers being related directly to the situation with the 1996 farm
bill. I am not going to ever say that a farm bill is perfectly written
and should never be looked at, but I think when you have a 7-year
program, to make a judgment after 3\1/2\ years that it ought to be
changed, then what was the point in having a 7-year program in the
first place?
It was that we wanted to bring some certainty for the family farmer
without politics meddling in their business. A 7-year program was
better than a 4- or 5- or 6-year program. So we wanted to bring some
certainty to agriculture.
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Obviously, a 7-year program does that more so than a shorter program.
So a family farm manager would not have to always be wondering, as he
was making decisions for the long term: Well, is Washington going to
mess this up for me as so many times decisions made by bureaucrats in
Washington have the ability to do?
So I am saying some people here are hinting at the 1996 farm bill
being that way. Others of us are saying that the trade situation is the
problem because farmers have to sell about a third of their product in
export if they are going to have a financially profitable situation.
I want to quote from Wallaces Farmer, January 1998, in which there
were tremendous prospects, even just 18 months ago, before the
Southeast Asia financial crisis was fully known, for opportunities for
exports to Southeast Asia. That situation for the farmer was further
exacerbated by the problems in Latin America. So I want to quote, then,
a short statement by a person by the name of John Otte: ``World
financial worries rock grains.''
``Expanding world demand, particularly in Asia, is the
cornerstone of the case for continued strength in corn, wheat
and soybean prices,'' points out Darrel Good, University of
Illinois economist.
Quoting further from the article:
Asian customers bought 57% of our 1995-96 corn exports, 66%
of our 1996-97 corn exports and almost 50% of our wheat
exports in both years. They [meaning Asian markets] are
important markets. No wonder Asian currency and stock market
problems bring grain market jitters.
``Signs of stability in Asian financial markets as central
banks intervened to support currency values brought a sigh of
relief to U.S. commodity markets,'' says Good.
``Whether late fall problems represent an economic hiccup
or the beginning of more serious problems is still unknown.
However, the developments underscore the importance of Asian
markets for U.S. crops.''
We know the end of that story. The end of that story is that we did
have that collapse of markets. And it very dramatically hurt our
prosperity in grains in the United States last year, and more so this
year.
Now, just to put in perspective the debate today, because there is so
much crepe-hanging going on, particularly from the other side of the
aisle, there is a quote here by Michael Barone of the August 28, 1995,
U.S. News and World Report. One sentence that will remind everybody
about the greatness of our country and our ability to overcome some of
the problems we face comes from an article called ``A Century of
Renewal.'' It is a review of the 1900s. He says:
There is something about America that makes things almost
always work out very much better than the cleverest
doomsayers predict.
So for my colleagues, particularly those on the other side of the
aisle who want to hang crepe and want to talk about the disastrous
situation we are in right now, I do not want to find fault with their
bringing to the attention of our colleagues the seriousness of that
problem. But they should not leave the impression that there is no hope
because this is America. We have gone through tough times before. All
you have to do is remember 1985 and 1986 in agriculture and the 1930s
in agriculture. Yet the American family farm that was the institution
then--probably on average back in those days of only about 150 acres
nationwide; today that is 500 acres nationwide--was a smaller
operation, but remember, it was still run by the family farmer, the
family making the management decisions, the family controlling the
capital, and the family doing the labor.
Please remember that, even the most cleverest of doomsayers here
today: Don't give up on America. Don't give up on American agriculture.
Don't give up on the family farmer. We are in a partnership during the
period of time of this farm bill. We have to meet our obligations, and
that is what this debate is about. But this debate ought to be about
hope for the family farmer as well.
I rise in support of our family farmers. Agriculture producers are in
desperate need of immediate assistance. We need to find the best
options available in these trying times. The Democrat proposal attempts
to address the problems confronting our family farmers but, I think,
falls short of our most important goal, which is providing assistance
as quickly as possible.
I realize this disaster affects farmers all across the Nation, but at
this moment I am most concerned about my friends and neighbors back
home. I am concerned that the Democrat alternative, by tying revenue
relief to the LDP payments, will delay the efficiency of delivering the
payment, unlike the transition payment which is more efficient.
The Democratic alternative offers provisions that would have a long-
term effect upon agriculture. I don't want anyone to misunderstand me
on that point. There are many things we can do to improve the
agricultural economy, but the task before us today is to develop and to
pass a short-term relief package that we can get out to those in need
as quickly as possible.
According to the Farm Service Agency's estimate, the transition
payments provided to corn growers this year will pay out at a rate of
36 cents per bushel. The supplemental transition payment Republicans
are offering will equal an additional 36-cent increase on every bushel
of corn produced this year. That is 76 cents in assistance for Iowa
family farmers, before you figure in any income through the loan
deficiency payment.
As a Senator from my State of Iowa, I believe it is also particularly
important to include language providing relief for soybean growers who
are not eligible for the transition payments. That is why our proposal
also contains $475 million in direct payments to soybean and other
oilseed producers. I am proud to say that Iowa is No. 1 in the Nation
in the production of soybeans, but our growers have been hard hit by
devastatingly low prices. Prices for soybeans are the lowest they have
been in nearly a quarter of a century, down from the $7-a-bushel range
just a couple of years ago to less than $4 today, which is way, way
below the cost of production. That is why I and other Senators
representing soybean-producing States wanted to make sure that soybean
growers were not left out of any relief package.
Finally, the Democrat proposal falls short in another very important
area. I think it undermines our U.S. negotiating objectives in the new
multilateral trade negotiations that the United States will launch
later this year. It will sharply weaken, and perhaps destroy, our
country's efforts to limit the enormously expensive European Union
production subsidies that make it impossible for our farmers to sell to
the 540 million European consumers.
I will say a brief word on that point. First, the United States just
presented four papers to the World Trade Organization in Geneva
outlining U.S. objectives for the new agriculture negotiations starting
this fall. The first of these papers deals with domestic support. It
states that the United States negotiating objective with regard to
domestic support is a negotiation that results in ``substantial
reductions in trade-distorting support and stronger rules that ensure
all production-related support is subject to discipline.''
Production-related payments are by definition trade distorting. They
are exactly the kind of payments that we want the European Union to get
rid of. I don't know how we can enter into tough negotiations with
Europeans, with their production payments our No. 1 negotiating target,
while we boost our production-related payments at the same time, which
is what is done with part of the money under the Democrat proposal.
This would undermine our negotiators and give the Europeans plenty of
reason to hang tough and to not give an inch.
My second point is closely related to the first. We will measure
success at the new world trade talks based on how well we do at
creating an open global trading system. The European Union's common
agricultural policy nearly torpedoed world trade negotiations as early
as 1990. The European Union later said it was reforming its common
agriculture policy, but farm handouts this year in the European Union
will reach $47 billion, nearly half of the entire European Union
budget. Moreover, the largely production-based European Union subsidies
still help those who least need help. Twenty percent of the European
Union's richest farmers receive 80 percent of the common agriculture
policy handout.
World farming is sliding deeper into recession with prices of some
commodities at historic lows. Now is not the
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time to give up on pressing the European Union hard to truly reform
this vastly wasteful subsidy program in their continent. But that is
exactly what we would end up doing if we go down the same road of tying
part of these payments to production, as the Democrat alternative would
do.
There are many enemies of agriculture market reform in the European
Union who are just looking for any circumstance to justify their
special pleading and to combat and counteract United States negotiators
in order for the European Union to keep their production subsidies
going. I am afraid that is exactly what the Democrat plan would do. I
think as chairman of the International Trade Subcommittee, I have a
responsibility to tell my colleagues this.
We should not hand the European Union an excuse to back away from
real reform that opens the European Union's huge agricultural markets
to American farmers.
The proposal that we pass today should be the fastest and most
efficient option available to help our family farmers. The most
important thing we can do today is to work towards providing emergency
revenue relief to our farmers as quickly as possible.
It is for that reason I urge my colleagues to vote for our Republican
alternative, to provide ample and immediate relief for hard-hit
farmers, assuming we are not able to work out some sort of bipartisan
agreement between now and that final vote.
I only ask, in closing, for people on the other side of the aisle who
are criticizing the 1996 farm bill to remember that what we call the
1996 farm bill relates mostly to agricultural programs and totally to
the subject of agriculture. We need to look beyond that basic
legislation and realize there were a lot of things promised in
conjunction with that farm bill through public policy that we have not
given the American farmer, which makes it difficult to say we have
fully given the American farmer--the family farmer--the tools he or she
needs to manage their operation in the way they should.
Yes, we have given them the flexibility to plant what they want to
plant without waiting for some Washington bureaucrat to do that. We
have given them the certainty of a certain transition payment every
year, from 1996 through the year 2002. We have told them, with the 7-
year farm program, that they have 7 years where we are going to have
some certainty, political certainty, in Washington of what our policies
are. But we also promised them more trading opportunities.
We have not made the maximum use of the Export Enhancement Program so
that we have a level playing field for our farmers. We have not given
the President fast track trading authority so that in the 24 agreements
that have been reached around the world among other countries we could
have been at the table, and haven't been at the table, and that there
is no President of the United States looking out for U.S. interests in
those negotiations; and for the sake of the American farmer, we should
be at some of those tables--at least those tables where agriculture is
being talked about.
We have not given the farmer the regulatory reform that has been
promised. And from the standpoint of taxes, we haven't given the farmer
the opportunity, through the farmers savings account, to level out the
peaks and valleys of his income by being able to retain 20 percent of
his income to tax in a low-income year, so that he is not paying high
taxes one year and no taxes another year. We haven't given him the
ability to do income averaging without running into the alternative
minimum tax. We haven't reduced the capital gains tax enough. And we
still have the death tax, the estate tax, which makes a lot of family
farmers who want to keep the farm in the family sometimes have to sell
the farm to pay the inheritance tax, instead of keeping the family farm
and passing it down from one generation to another. Sometimes, if they
can't afford to do that, they either make their operation so
inefficient that they close down business or else they have a terrific
tax burden over them as well.
So here we have an opportunity to--in the spirit of the 1996 farm
bill, when we told the farmers of America we were going to have a
smooth transition over the next 7 years, we said to them we are going
to set aside $43 billion for each of those next 7 years--not for each,
but cumulative for those 7 years. This year, it is $5.6 billion. Well,
we look back now, and in 1996 we did not anticipate the dramatic drop-
off in exports because we could not have predicted the Southeast Asian
financial crisis and the contagion that caught on in Latin America. So
we are going back now, unapologetically, on keeping a promise to the
family farmers that we are going to keep this smooth transition we
promised them, and that is what the amount of money we are talking
about here on the floor is all about.
The PRESIDING OFFICER. Under the previous order, the Senator from
North Dakota is recognized.
Mr. DORGAN. Mr. President, I have waited some while to be able to
speak on these disaster bills and on this general issue. I am very
pleased to have the opportunity for my colleague from New York who
asked if I would yield for a minute for a question. I am happy to do
that.
Mr. SCHUMER. First, I thank the Senator from North Dakota and
Senators Harkin and Daschle for the farm aid amendment, and for their
hard work. This measure will help farmers across the country, including
the farmers of New York State, who were hard hit by drought and last
year's storms.
We are in the midst of the worst drought since the Dust Bowl in my
State. There is not a penny of relief for farmers with drought
assistance. This drought is affecting farmers throughout the Eastern
United States. When I meet with farmers in New York who tell me they
are facing unprecedented losses, they are now pointing to letting
fields die off to conserve water, or other fields. We can't do anything
about the rain, but the Democratic amendment would increase section 32
funding to give farmers some relief from the devastation on the farm
and would increase funding for the disaster relief fund--something that
would help New York's apple and onion farmers who faced tens of
millions in losses last year.
In urging my colleagues to support the Democratic amendment, I simply
ask the Senator from North Dakota, am I correct in assuming that the
Democratic amendment does have this kind of drought relief, which is
not in the other bill?
Mr. DORGAN. The Senator from New York is correct. That is one of the
distinctions between these two pieces of legislation. As the drought
spreads across the eastern seaboard and other parts of the country and
begins to devastate producers there, there needs to be some disaster
relief. We have two pieces of legislation proposed today, one of which
has no disaster relief at all, even in the face of this increasingly
difficult drought.
So the Senator from New York, speaking on behalf of producers who are
hard-hit in New York, is certainly accurate to say that the amendment
we have offered provides drought relief and the alternative does not.
Mr. SCHUMER. I thank the Senator for his generosity.
Mr. DORGAN. Mr. President, this is not about Republicans and
Democrats. I start by saying to my colleague from Iowa that I hope,
whatever comes from all of this debate, at the end of the time we can,
as Republicans and Democrats, find a way to provide appropriate relief
to people who are hurting. There is not a Republican or a Democratic
way to go broke on the family farm. The destruction of hopes and dreams
on the family farm is something that is tragic and something to which
we need to respond.
This is not of the family farmers' making. They didn't cause prices
to collapse or the Asian economies to have difficulty, and they didn't
cause a wet cycle or crop disease. It is not their fault. We must, it
seems to me, respond to it. But it is appropriate, I think, for there
to be differences in the way we respond. There is a philosophical
difference in the way we respond. Also, there has been a difference in
the aggressiveness and interest in responding. I know that if this kind
of economic trouble were occurring on Wall Street or in the area of
corporate profits, we would have a legislative ambulance, with its
siren, going full speed in trying to find a solution. It has not been
quite so easy because it is family farmers.
Darrel Sudzback is an auctioneer from Minot, ND. Blake Nicholson, an
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Associated Press writer, wrote a piece the other day. He said:
Darrel Sudzback likens farm sales to funerals. He said,
``If you don't know the deceased, you are not likely to get
emotional.'' But more often than not these days, auctioneers
must help a friend or a neighbor sell off a lifetime of hard
work. Marvin Hoffman says, ``It just hurts me to do this.
When they hurt, I hurt.'' With many families [Mr. Nicholson
writes] sliding deeper into an economic nightmare, the number
of farm sales in North Dakota continues to rise. ``It used to
be,'' one auctioneer said, ``that a farm auction was kind of
like a social event, a joyful event when somebody was
retiring.'' Julian Hagen said that he conducted auction sales
for 43 years, but he said, ``Now there is a different
atmosphere at auction sales. If people know that a man is
forced out, that is not a good feeling. It is tough to deal
with when you have known a family farmer for quite a few
years, and now they have to give up a career or property
they have had in the family for generations. I try to stay
as upbeat as I can. Bankers in north-central North Dakota
say that area has been hit by 5 years of flooding and crop
disease, and many farmers have been forced off the land.
People need to think of this problem in terms of not only lost
income, but assume you are on a farm and you have a tractor; you have
some land; you have a family; you have hopes and dreams. You put a crop
in the ground and see that this is what has happened to your income--to
your price.
Then on top of that, add not only collapsed prices, but add the worst
crop disease in this century--the worst in a century in North Dakota.
On top of that, add a wet spring so that 3.2 million acres--yes, I said
3.2 million acres--of land could not be planted. It was left idle. Add
all of those things together, and you have a catastrophe for families
out there struggling to make a living.
Will Rogers was always trying to be funny. He used to talk about the
difference between Republicans and Democrats. He said on April 6, 1930,
``Even the Lord couldn't stand to wait on the Republicans forever.''
He was talking about the farm program.
There is a difference, it seems to me. There is a difference between
Republicans and Democrats in how we construct a solution to the
disaster and the crisis, and how we feel the underlying farm bill
should be changed.
Will Rogers also said, ``If farmers could harvest the political
promises made to them, they would be sitting pretty.''
I want to talk a bit about those political promises--the political
promises given farmers early on to say that we want to get rid of the
farm program as we know it in this country, get rid of the safety net
as we know it, and create something called ``transition payments''
under the Freedom to Farm bill.
I mentioned yesterday that the title was interesting to me. Sometimes
titles can change how people perceive things notwithstanding what might
be the real part of a proposal. Early on when people began to sell
insurance in this country, they called it death insurance. You know,
death insurance didn't sell too well. So they decided that they had
better rename it. So they renamed it life insurance, and it started
selling. It was a better name. It is a product that most Americans need
and use.
It is interesting. What is in a name. The name for the farm bill a
few years ago was Freedom to Farm. We passed a Freedom to Farm bill.
The wheat price slump on this chart may be unconnected, or maybe not to
Freedom to Farm.
Here are the wheat prices before--Freedom to Farm--and wheat prices
since. Chance? Happenstance? Maybe. Maybe not. Maybe we face a
circumstance in this country where the underlying farm bill was never
designed to work and allowed for collapsed prices. Maybe that is the
fact.
I want to begin with a bit of history.
About 40 years ago, a biologist by the name of Rachel Carson wrote a
book that in many ways changed our country. It was called ``The Silent
Spring.'' The book documented how the products of America's industrial
production were seeping into our country's food chain. The modern
environmental movement was also from Rachel Carson's book, ``The Silent
Spring.''
Today we face another ``silent spring'' in this country. Like the
first, it is of a human making. But it is not about birds, and it is
not about fish. It involves our country's independent family farmers
and producers. It involves our social habitat--the farm communities of
which family farmers are the base.
We know that family farmers are hurting. In fact, many would consider
it an extraordinary year if they had any opportunity at all to meet
their cost of production. I know of cases that break my heart--people
who have fought for decades, and now are losing everything they have.
What is worse is that some opinion leaders are starting to throw in the
towel. They say, well, maybe family farming is a relic of the past.
Maybe it is not of value to our country anymore. Maybe it is time to do
something else.
I don't buy that at all. I think one thing we can say about the
future is that people will be eating. The world's population is growing
rapidly. Every month in this world we add another New York City in
population. Every single month, another New York City in population is
added to our globe. We know there is no more farmland being created on
this Earth. It doesn't take a genius to put those two together.
Mr. SARBANES. Will the Senator yield?
Mr. DORGAN. I am happy to yield.
Mr. SARBANES. I want to underscore the point the distinguished
Senator from North Dakota is making.
Yesterday, I had the opportunity to go with Secretary Glickman and
Governor Glendening to visit one of the farms that has been affected by
the drought in our State. It is devastating to see. Of course, it is a
compound of two things: The low commodity prices, which the Senator is
demonstrating with his charts--this is not only wheat but the same
thing applies to other basic commodities as well--and the drought,
which is crippling certain parts of the country.
We talked to this farmer who has been farming ever since he was a
young boy. His father was a farmer. His grandfather was a farmer. He
doesn't know whether he will be in farming next year because of what
has hit them--the combination of the low commodity prices and the
drought which is now desperately affecting our country.
He is not alone. Farmers across Maryland and indeed, the nation, are
finding themselves facing similar circumstances. Nearly one fourth of
Maryland's corn crop is in poor to very poor condition. Likewise, 55
percent of pastures and hay fields are in poor or very poor condition.
Milk production has decreased because of the high temperatures. And
because pastures and field crops are in such bad shape, cattle and
dairy farmers are now faced with a dilemma, whether or not to sell
their animals or begin feeding them hay which should be utilized over
the winter.
Maryland has suffered extensive drought damage for three consecutive
years. However the drought this year is by far the worst since the
depression. Yesterday, the United States Geological Survey reported
that we may be in the midst of what could become the worst drought of
the 20th century. Rainfall throughout Maryland is currently between 40
and 50 percent below normal. Throughout Maryland, counties are
reporting losses as high as 100 percent for certain crops. Most
alarmingly, there is no end in sight.
But the crisis affecting agriculture is about more than the drought.
The dramatic drop in commodity prices, since the enactment of the
Freedom to Farm Act, has had its affect on farmers throughout the
country and the State of Maryland. The poultry industry, which is
Maryland's largest agricultural producer, has witnessed a 45-percent
decrease in exports. The situation for farmers is bleak and many are
losing their businesses.
Mr. President, Maryland depends on agriculture. Agriculture is
Maryland's largest industry contributing more than $11 billion annually
to our economy. More than 350,000 Marylanders--some 14 percent of our
State's workforce--are employed in all aspects of agriculture from farm
production of wholesaling and retaining. Forty percent of our State's
land is in agriculture--more than 2 million acres. So when our family
farmers and the farm economy start hurting--everyone suffers.
Our farmers are in trouble and they deserve our assistance. This
measure provides that assistance in the form of direct payments and low
interest loans.
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It gives nearly $11 billion in emergency assistance to farmers and
ranchers who have been affected by natural disaster and economic
crisis. $6 billion of that amount will deliver income assistance to
farmers hit hard by the economic disaster. And more than $2.6 billion
will be used to address natural disasters such as the drought. Within
the disaster funds, nearly $300 million in section 32 and disaster
reserve funds has been included to specifically address the Mid-
Atlantic drought.
Mr. President, the need for this amendment is real. Until we are able
to reform the Freedom to Farm Act or manufacture rain, these funds are
vital to the preservation of the farm industry throughout the State of
Maryland and the United States.
In my judgment, it is imperative that we pass this legislation.
I very much appreciate the Senator from North Dakota yielding. I want
to underscore the crisis nature of the situation to which he is
referring.
I want to acknowledge the consistent and effective leadership which
he has exercised on many of these farm issues. He and others of us
expressed concerns and questions at the time the 1996 act was passed.
Much of that now seems to have come around to hit us--compounded, of
course, by these serious weather circumstances which exist not in all
parts of the country but in certain parts of the country.
I thank the Senator for yielding.
Mr. DORGAN. I thank the Senator from Maryland. He is talking about a
drought which is devastating part of our country even as collapsed
prices have been devastating wheat farmers and the grain farmers in my
part of the country.
I want to respond to some things that were said earlier today that
somehow we are not as efficient as we need to be as family farmers.
In my judgment--and I think the evidence supports this--the family
farmer in our country is as productive as any in the world. It supports
our rural communities in ways that corporations never will and never
can.
Family farmers have faced hard times before. This is not something
new. The history of farming is a history of difficulty. But never
before has the Federal Government done so little to help and so much to
push the producer off the edge.
On top of the floods that we have talked about and the drought and
the slump in the foreign markets, our farmers are facing a plague of
deliberate public policies--yes, established here in Washington--that
undermine their economic interest. They face trade agreements designed
for the convenience of food processors rather than food producers. They
face a ``see-no-evil'' posture toward antitrust enforcement that has
left family farmers selling into controlled markets that dictate the
terms to them. On top of that, they face a 1996 farm bill that
fundamentally doesn't and can't work.
There is a larger issue than dollars and cents; namely, the kind of
country we are going to be.
It is not fashionable to raise all of these issues. We are supposed
to keep our mouths shut and cash in on the stock market which has done
quite well. But the Founding Fathers didn't create this country
primarily to be an engine of stock market riches or rising gross
domestic product. They created this country to promote a way of life
based on freedom and democracy and independent producers in contrast to
the aristocracy they left behind in Europe.
The concept of independence and freedom was rooted in the land, and
they couldn't conceive of these things being separate.
Wendell Berry, a farmer, testified recently in Washington at a
hearing that I chaired. He said:
Thomas Jefferson thought the small land owners were the
most precious part of state, and he thought government should
give priority to their survival. But increasingly, since
World War II our government's manifest policy has been to get
rid of them. This country is paying a price for this. That
price doesn't show up on the supermarket shelves but rather
our Nation's spirit and our character.
Independent family-based agriculture produces more than wheat, beef,
and pork. It produces a society and a culture, our main streets, our
equipment dealers, our schools, our churches, and our hospitals. It is
the ``culture'' in agriculture. Take away family-based producers and
all that is left are calories. That is a radical change in our country.
I am not talking about rural sentimentalism or nostalgia. It is
something we know from experience. Rural communities work. They have so
many of the things the Americans all over this country say they want,
including stable families, low crime rates, neighborliness, a volunteer
spirit.
In my hometown of Regent, ND, they still leave the keys in the car
when they park on Main Street. Try doing that here. Many Americans have
plenty of food on their tables, but what they feel is a growing dearth
of the qualities that they want most are the qualities that farm
communities represent. It would be insane, in my judgment, to stand by
and let these communities wither on the vine by neglecting the economic
base that sustains them.
Yes, the Nation's financial establishment is enthused about that
prospect. It can't wait to turn hog barns into agrifactories and more.
However, that will not advance this country's interests. We can't stop
bad weather and we can't stop unruly markets, but we can change Federal
policies that turn adversity into quicksand for family farmers.
I listened to a ringing defense of the current farm program. I
listened to one of my colleagues who was an economist, and I mentioned
before I used to teach economics but was able to overcome that and go
on to think clearly. There is an interesting debate among economists
about all of these issues. First, is there a crisis? Listening to part
of the debate this morning one would think there is nothing wrong on
the family farm. Is there a crisis? Would anyone in this country be
feeling there is a crisis if this is what happened to their income? If
any sector of the American economy had this happen to their income,
would they consider it a crisis? The answer is, of course.
I had a farmer come to a meeting who farmed the lands that his
granddad farmed, his dad farmed, and he farmed. He stood up and said:
For 23 years, I farmed this land. His chin began to quiver and his eyes
began to water. He could hardly speak. He said: I'm going to have to
leave this farm.
Anyone could tell he loved what he did. He was going to lose the farm
that his granddad, dad, and he had farmed for those many decades. Is
that a crisis? I think so.
In my State, add to the fact that incomes have collapsed because of
price collapses, 3.2 million acres were not planted because of wet
conditions in the spring--3.2 million acres. A young boy wrote some
while ago and said: My dad could feed 180 people and he can't feed his
family.
Is that a crisis? Of course.
Why the crisis? I mentioned collapsed prices and a wet spring and the
worst crop disease in the century in our part of the country. This
notion of a farm bill that says the free market shall determine what
happens in agriculture, by cutting the tether and turning it all loose,
finds you scratching your head and wondering, gee, why didn't this work
out the way we thought? Because the market isn't free. It never has
been free and never will be free.
That bill that says we will transition farmers out of any help, over
7 years that bill transitions farmers into a marketplace that is fixed.
Does anybody know what kind of tariff we have putting beef into Japan
at this moment? I guess it costs $30 or $35 a pound to buy T-bone steak
in Tokyo. Does anybody know what tariff exists on beef going into
Japan? Very close to 50 percent. That is a failed free market by any
definition anywhere. That is after we reached an agreement with them 10
years ago.
How about China? They consume half the world's pork. Are
we delivering a lot of hogs into China? No, we have a $50 billion to
$60 billion trade deficit with China and we are not exporting enough
hogs into China.
What about wheat in Canada? No. I drove to the border of Canada with
a truck and couldn't get the wheat into Canada. I stopped at the
border, and all the way to the border, semitruckload after
semitruckload after semitruckload was coming into this country, hauling
Canadian grain into our country and undercutting our farmer's prices.
We sit at the border trying to go north, you can't. The border coming
south is flooded by millions
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of wheat acres, unfairly subsidized, sold to us by a Canadian wheat
board. It is a state monopoly and would be illegal in this country,
with it's secret prices. Our trade officials downtown wouldn't lift a
finger--never have and never will--to deal with the unfair trade
practices.
I mention Japan, China, and Canada. I could list other countries for
an hour, but I won't. Then we say to the family farmers, operate in a
free marketplace. That is what we have created, a marketplace that is
fundamentally corrupt with respect to fairness to our family farmers.
My colleague this morning, Senator Conrad, talked about the Europeans
subsidizing exports to the tune of ten times our subsidies. Is that
fair competition? I don't think so.
Over and over and over, if it is not just unfair competition in
selling, selling into our marketplace with products that ought not be
allowed, produced with growth hormones or produced with chemicals that
we wouldn't allow to be used in this country on animals or grains--that
happens every day in every way.
We produce canola in this country and we are prevented from using a
chemical on the canola that we would purchase from Canada because that
chemical can't be allowed into the country. However, the Canadians can
use that chemical on their canola, plant the canola, harvest it, and
ship it into Belfield, ND, to put it at a crushing plant, crush it, and
put it into our food chain.
My farmers say: Why is that the case? What is going on here?
What is going on here is family farmers have been set up in every
single way, set up for failure.
I heard this morning what was being proposed here was socialism. I
heard what was being proposed here was being proposed by a bunch of
leftists. I heard what was being proposed here was being proposed by
people who don't believe in the principles of economics. I sat here and
thought, that is novel; an interesting, pithy new political debate
calling people socialists or leftists. Or maybe it isn't so new. Maybe
it is just a tired, rheumatoid, calcified debate by people who can't
think of anything else to say.
Deciding to stand up and help family farmers in a time of crisis and
trouble is socialistic? Are you kidding me? It is everything that is
right about the instincts of this country.
When part of this country is in trouble, the rest of the country
moves to help. I wasn't there, but in the old wagon train days when we
populated the western part of this country with wagon trains, one of
the first lessons learned was don't move ahead by leaving somebody
behind. That is an indelible lesson. The same is true with this country
and its economy. Don't move ahead by leaving some behind. When family
farmers are in trouble, we have a responsibility to help, not crow
about socialism and leftists. What a bunch of nonsense.
The fact is, the same kind of debate includes this: We are no longer
the most efficient in farming. I heard that this morning. We are no
longer the most efficient in farming. Nonsense. Show me who is better.
Tell me who is better. I am sick and tired of this ``blame America
first'' notion. We lose because we are no longer the most efficient.
Tell me who is more efficient anywhere else in the world. Stop blaming
this country first for everything.
If we had a free market, if we had open markets, if we had fair
competition, if we didn't have policymakers setting up family farmers
for failure, and if they paid as much attention to the family economic
unit--which apparently has no value to a lot of folks in this country--
as we do for the corporate economic unit, maybe we would see some
policies that would say to family farmers, you matter in this country's
future and we want to keep you.
I do not understand much of this debate, except we face the
requirement to do two things, and we need to do them soon. First, we
must respond to a farm crisis. That is the purpose of the two bills on
the floor of the Senate today. We do it in very different ways.
As my colleague from New York mentioned, the majority party bill
doesn't even respond to any part of the disaster; there are no disaster
provisions at all. Of course, we have a substantial part of this
country now facing a serious drought, so it is a very serious problem.
We have very different ways in which we provide income support to
family farmers. The majority party follows the Freedom to Farm bill,
which of course is a total flop, total failure. It gives payments to
people who are not producing. It says: You are not producing; you are
not in trouble; you don't have any crop; here's some money. What kind
of logic is that? It doesn't make any sense.
We propose a mechanism by which we provide help to people who are
producing and are losing money as a result of that production, trying
to provide help to shore up that family farm. Our position is simple.
When prices hit a valley, we want a bridge across that valley so family
farmers can get across that valley. We want to build a bridge, and
other people want to blow up the bridge. But if we don't take the first
step to provide some crisis and disaster relief and then follow it very
quickly in September and October, as I discussed with my colleague from
Iowa and others, with a change in the underlying farm bill, we will not
have done much for farmers.
Farmers say to me: We very much appreciate some disaster help, but it
will not provide the hope that is necessary for me to plant a crop and
believe that I can make it. We need a change in the farm bill. We need
a safety net that we think has a chance to work for us in the future.
Mr. HARKIN. If the Senator will yield?
Mr. DORGAN. I will be happy to yield.
Mr. HARKIN. First, I thank the Senator from North Dakota for his
statement, which is exemplary in its clarity. The arguments the Senator
has made, the point he made, this should crystallize clearly what this
debate is all about, what is happening, what we are all talking about.
I picked up on one thing the Senator said--that under the
Republican's proposal the payments would go out without regard to
whether someone was producing anything or not; it could actually go out
to absentee landlords, people who are not on the farm, hadn't even
planted anything.
As the Senator knows, the AMTA payments that are in their bill go out
without regard to whether they are planting anything or not. It is
based upon outdated, outmoded provisions of base acreages and proven
yields. It goes back as far as 20 years.
I wonder if it occurred to the Senator from North Dakota--I heard a
couple of Republicans this morning talk about the failed policies of
the past. Yet they are basing their payments on a policy that goes back
20 years, base acreages and proven yields, which any farmer will tell
you has no basis in reality as to what is going on in the farm today.
I am curious. Does the Senator have any idea why they would want to
make payments based on something that is not even happening out there
today? It is not even based on production, not helping the family
farmer. I am still a little confused as to why they would suggest that
kind of payment mechanism rather than what we are suggesting, which
goes out to farmers based on the crops they bring in from the fields.
Mr. DORGAN. The payment mechanism is called an AMTA payment or a
transition payment. This would actually enhance the transition payment.
The purpose of a transition payment, by its very name, is to transition
family farmers out of a farm program. It said: Whatever your little
boat is, let it float on whatever marketplace exists out there. The
problem is, they declare it a free market when in fact it is a market
that is totally stacked against family farmers. So family farmers
cannot make it in this kind of system.
This farm bill that provides transition payments is a faulty concept.
Yet even for disaster relief, they cling to this same faulty concept of
moving some income out largely because, I think, they are worried, if
they do not cling to that, somehow they will be seen as retreating from
the farm bill. I would say: Retreat as fast as you can from a farm bill
that has put us in this position on wheat prices.
You may think it is totally unfair to say wheat prices have anything
to do with the farm bill. I don't know. Maybe this is pure coincidence.
Maybe it is just some sort of a cruel irony that we
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passed a new farm bill and all these prices collapsed. But the point
is, I was hearing this morning discussions from people who were
standing up to say things are really good on the family farm. I did not
look closely at their shoes to see whether they had been on a family
farm recently. They looked as if they were wearing pretty good pants
and shirts and so on. It occurred to me, if things are so good on the
family farm, why are we seeing all these farm auctions and all this
misery and all this pain and agony with family farmers losing their
lifetime of investment? Why? Because prices have collapsed. Things are
not good on the family farm. The current farm bill doesn't work.
People stand here--I guess I can listen to them--they stand here for
hours and tell us how wonderful things are and how much income the
current farm bill is spreading in rural America. I would say, however
much income that is, it does not make up for the radical, total
collapse of the grain markets. What has happened is, we have a payment
system that says, under Freedom to Farm, when prices are high, you get
a payment that you do not need, and when prices are low, you don't get
a payment that is sufficient to give you the help you need.
Mr. HARKIN. If the Senator will yield further, the Senator has stated
it absolutely correctly. I was interested in the chart there of wheat
prices. I ask the Senator if he would put it back up there again, on
wheat prices. It just about mirrors corn and soybeans, all the major
production crops in the Southwest.
I have an article from the Wichita Eagle, from 1995, I believe. It is
an article written by the distinguished Senator from Kansas. I think he
was a House Member at the time, Senator Roberts. So this article says:
Good Bill for Farm Reality, by Pat Roberts.
The first sentence says:
My Freedom to Farm legislation now before Congress is a new
agricultural policy for a new century.
``My Freedom to Farm. . . .'' That is by Pat Roberts, now Senator
Roberts. I want to read to the Senator from North Dakota this paragraph
in there. He says:
Finally, Freedom to Farm enhances the farmer's total
economic situation. In fact, the bill results in the highest
net farm income over the next seven years of any proposal
before Congress.
He says:
The AMTA payment cushions the Nation's agriculture economy
from collapse during the 7-year transition process.
I have to ask my friend from South Dakota, are your farmers receiving
the highest net farm income that they have received ever in any farm
program? Are they receiving the highest farm income? And are your
farmers being cushioned by the Freedom to Farm bill?
Mr. DORGAN. I say to the Senator from Iowa, the answer to that
question is, clearly, farm income is collapsing. It is collapsing with
grain prices, with commodity prices generally, and family farmers are
put in terrible trouble as a result of it. Many of them are facing
extinction.
I have here a report from the Economic Policy Institute that
describes the almost complete failure of the current farm bill and
current strategy. It is written by Robert Scott. It is about an eight-
page report. I ask unanimous consent to have that printed in the Record
following my remarks.
The PRESIDING OFFICER (Ms. Collins). Without objection, it is so
ordered.
(See Exhibit 1.)
Mr. DORGAN. Let me make one final point, and then I will relinquish
the floor. I know my colleagues wish to speak.
This is a map of the United States. This map shows in red the
counties of our country that have lost more than 10 percent of their
population. It shows where people are moving out, not coming in. We
have cities growing in various parts of America, but in the center of
our country, in the farm belt of our country, we are being depopulated.
People are leaving. My home county, which is about the size of the
State of Rhode Island, was 5,000 people when I left, in population. It
is now 3,000. The neighboring county, which is about the same size, the
size of the State of Rhode Island, had 920 people last year. The fact
is, people are moving out. Why? Because family farmers cannot make a
living.
We have had other farm policies that have not worked. I mean we have
had Democratic and Republican failures. Both parties have failed in
many ways in farm policy.
It is just the circumstance today where we have farm prices, in
constant dollars, that are at Depression level; and we have a farm
program that, like it or not, was offered by the majority party that
does not work. It does not work at all in the context of what our needs
are to try to save family farmers.
We will have two votes today: One on a disaster package or a price
relief package that offers more help, and one that offers less; one
that offers some help for disaster relief, and one that does not.
A whole series of differences exist between these proposals. My hope
is that at the end of this day the Senate will have agreed to the
proposal that Senators Daschle, Harkin, Conrad, myself, and others have
helped draft and that we will be able to send a message of hope to
family farmers, to say, we know what is happening, we know we need
change. This is the first step. The second step, in September or
October, will be to force a fundamental change in our underlying farm
policy.
Madam President, I yield the floor.
Exhibit 1
Exported to Death
the failure of agricultural deregulation
(By Robert E. Scott)
In 1996, free market Republicans and budget-cutting
Democrats offered farmers a deal: accept a cut in farm
subsidies and, in return, the government would promote
exports in new trade deals with Latin America and in the
World Trade Organization (WTO) and eliminate restrictions on
planting decisions. In economic terms, farmers were asked to
take on risks heretofore assumed by the government in
exchange for deregulation and the promise of increased
exports.
This sounded like a good deal to many farmers, especially
since exports and prices had been rising for several years.
Many farmers and agribusiness interests supported the bill,
and it was in keeping with the position of many farm
representatives and most members of Congress from farm states
who already supported the WTO, the North American Free Trade
Agreement (NAFTA), and the extension of fast-track trade
negotiating authority, usually in the name of supporting
family farmers.
But for family farmers, the Omnibus Farm Bill--and the
export-led growth strategy upon which it was based--has been
a massive failure. The U.S. farm trade balance declined by
more than $13 billion between 1996 and 1998, and prices have
plummeted. August U.S. corn prices fell from $4.30 per bushel
in 1996 to $1.89, or 56%. Wheat prices fell from $4.57 per
bushel in 1996 to $2.46 in 1998, a drop of 46%.
The combination of export dependence and deregulation have
left increased numbers of family farmers facing extinction.
At the same time, U.S. agriculture becomes more centralized
in the hands of large farms and national and multinational
companies.
Contrary to the Department of Agriculture's rosy
predictions, the plight of farmers is likely to get worse
under current policies. Expanding supplies are likely to
outpace the growth in demand for U.S. farm products;
restricted access to foreign markets will continue; and the
strong dollar, actively supported by the U.S. Treasury, will
further depress the prices farmers receive for their goods.
It is time to end this cruel hoax on the American family
farmer. The U.S. government should: reduce the value of the
dollar in order to boost farm prices; shift subsidies away
from large farms and corporate farmers to independent,
family-run farms; increase expenditures for research,
development, and infrastructure; and support new uses for
farm products.
freedom to fail: the omnibus 1996 farm bill
For more than a half-century after the Great Depression,
government policies helped create a highly successful U.S.
agricultural sector by reducing risks to family farmers. Crop
insurance and disaster programs reduced production risk, and
a variety of price and income support programs, plus set-
aside programs that paid farmers to remove excess land from
production, reduced price risks. But the Omnibus 1996 Farm
Bill eliminated price and income supports and replaced them
with annual income payments, to be phased out, on a fixed
declining schedule, over seven years (Chite and Jickling
1999, 2). The 1996 farm bill also eliminated the set-aside
program, thus giving farmers, in the words of one
commentator, ``the freedom to plant what they wanted, when
they wanted. . . . With prices rising and global demand
soaring, lawmakers and farmers were happy to exchange the
bureaucratic rulebook for the Invisible Hand'' (Carey 1999).
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The rapid growth in U.S. agricultural exports--they more
than doubled between 1985 and 1996--encouraged many farmers
to buy into the deregulation strategy. But rising exports
have not translated into rising incomes. Due to globalization
and relentless declines in the real prices of basic farm
products, the structure of American agriculture has been
transformed, and, as a result, real U.S. farm income has been
steady or declining for many years despite the long-run trend
of rising exports.
In the two decades from 1978 to 1997, real grain prices
were slashed in half. Then, in 1998, prices fell an
additional 10-20%, pushing many family farmers to the brink
of bankruptcy.\1\ In this environment, only the largest and
most capital intensive farms are able to survive and prosper.
Growing concentration throughout the food chain
There are about 2 million farms in the U.S., but three-
quarters of those generate minimal or negative net incomes
(USDA 1996). Since farms with less than $50,000 in gross
revenues tend to be primarily part-time or recreational
ventures, this section analyzes working farms that generate
gross revenues in excess of $50,000 per year.
Within this group, the number of large farms is growing
while small farms are disappearing at a rapid pace, as shown
in Table 1. There were 554,000 working farms in the U.S. in
1993. More than 42,000 farms with revenues of less than
$250,000 per year disappeared between 1994 and 1997, a
decline of about 10%. Nearly 20,000 farms with revenues in
excess of $250,000 per year were added in this three-year
period, an increase of about 17%. Thus, the U.S. experienced
a net loss of about 22,000 farms between 1994 and 1997 alone.
TABLE 1.--CHANGES IN THE DISTRIBUTION OF WORKING FARMS, 1993-98
--------------------------------------------------------------------------------------------------------------------------------------------------------
Size class (annual sales)
--------------------------------------------------------------------------------------------------
$1,000,000
or more $500,000-$999,999 $250,000-$499,000 $100,000-249,999 $50,000-$99,999 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
1993................................................. 14,980 30,876 70,982 224,823 212,531 554,192
1997................................................. 18,767 34,764 82,984 207,058 18
