[Senate Hearing 107-254]
[From the U.S. Government Publishing Office]
S. Hrg. 107-254
AGRICULTURAL AND RURAL COMMUNITY ISSUES
=======================================================================
HEARING
before the
COMMITTEE ON AGRICULTURE,
NUTRITION, AND FORESTRY
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
__________
MARCH 24, 2001
__________
Printed for the use of the
Committee on Agriculture, Nutrition, and Forestry
Available via the World Wide Web: http://www.agriculture.senate.gov
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77-324 PDF WASHINGTON : 2002
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COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY
RICHARD G. LUGAR, Indiana, Chairman
JESSE HELMS, North Carolina TOM HARKIN, Iowa
THAD COCHRAN, Mississippi PATRICK J. LEAHY, Vermont
MITCH McCONNELL, Kentucky KENT CONRAD, North Dakota
PAT ROBERTS, Kansas THOMAS A. DASCHLE, South Dakota
PETER G. FITZGERALD, Illinois MAX BAUCUS, Montana
CRAIG THOMAS, Wyoming BLANCHE L. LINCOLN, Arkansas
WAYNE ALLARD, Colorado ZELL MILLER, Georgia
TIM HUTCHINSON, Arkansas DEBBIE A. STABENOW, Michigan
MICHEAL D. CRAPO, Idaho BEN NELSON, Nebraska
MARK DAYTON, Minnesota
Keith Luse, Staff Director
David L. Johnson, Chief Counsel
Robert E. Sturm, Chief Clerk
Mark Halverson, Staff Director for the Minority
(ii)
C O N T E N T S
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Page
Hearing(s):
Agricultural and Rural Community Issues, Lewis, Iowa............. 01
Agricultural and Rural Community Issues, Spencer, Iowa........... 111
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Saturday March 24, 2001, Lewis, Iowa
STATEMENTS PRESENTED BY SENATORS
Harkin, Hon. Tom, a U.S. Senator from Iowa, Ranking Member,
Committee on Agriculture, Nutrition, and Forestry.............. 01
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WITNESSES
Askew, John, President, Iowa Soybean Association................. 07
Aust, Erwin, Shenandoah, Iowa.................................... 33
Bentley, Rod, President of Pottawattamie County Cattlemen's
Association.................................................... 36
Brownlee, Adair County........................................... 37
Carney, Sam, Vice President, Iowa Pork Producers Association..... 11
Duffy, Micheal, Professor of Economics, Iowa State University.... 03
Fox Ridge Farms, Carson, Iowa.................................... 36
Frederiksen, Shirley, Golden Hills Resource Conservation and
Development District........................................... 09
Hanson, Jim, New Market, Iowa.................................... 40
Hopkins, Gayl.................................................... 27
Jorgensen, Dan, Farmer, Audubon, Iowa............................ 34
Lehman, Aaron Heley, Iowa Farmers Union.......................... 13
Morgan, Dan, Farmer, Corning, Iowa............................... 39
O'Brien, Denise, Atlantic, Iowa.................................. 23
Ortner, Bill, Farmer, Danbury, Iowa.............................. 38
Shulte, Joyce, Southwest Community College....................... 30
Swanson, Harold.................................................. 28
Williams, David, Farmer and Wallace Foundation Learning Center,
Page County, Iowa.............................................. 05
Zellmer, Alan, Farmer/Producer................................... 30
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APPENDIX
Prepared Statements:
Harkin, Hon. Tom............................................. 44
Askew, John.................................................. 69
Aust, Erwin.................................................. 93
Carney, Sam.................................................. 78
Duffy, Micheal............................................... 45
Frederiksen, Shirley......................................... 76
Lehman, Aaron Heley.......................................... 83
O'Brien, Denise.............................................. 87
Shulte, Joyce................................................ 92
Swanson, Harold.............................................. 91
Williams, David.............................................. 64
Document(s) Submitted for the Record:
American Coalition for Ethanol............................... 109
Center for Rural Affairs..................................... 105
Iowa Pork Producers Association News Bulletin................ 106
McGiven, Ed, EJM Farms, Inc.................................. 103
Oswald, Stanley, GMO, Starlink, Surplus Corn................. 107
Vilsack, Thomas, Governor of Iowa............................ 108
Williams, David, Statement Given to the National Research,
Extension, Education and Economics Advisory Board.......... 96
Watershed Information Sheet.................................. 101
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Saturday, March 24, 2001, Spencer, Iowa
STATEMENTS PRESENTED BY SENATORS
Harkin, Hon. Tom, a U.S. Senator from Iowa, Ranking Member,
Committee on Agriculture, Nutrition, and Froestry.............. 111
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WITNESSES
Blundall, Joan, Executive Director of the Seasons Center for
Community Mental Health........................................ 117
Hamilton, Mark H., Positively Iowa............................... 122
Harl, Neil E., Professor of Economics, Iowa State University..... 114
Mason, Don, President-Elect of the Iowa Corn Growers Association. 119
Sand, Duane, Iowa Natural Heritage Foundation of Des Moines...... 124
Sundblad, Phil, Iowa Farm Bureau Federation...................... 126
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APPENDIX
Prepared Statements:
Harkin, Hon. Tom............................................. 154
Blundall, Joan............................................... 175
Hamilton, Mark H............................................. 182
Harl, Neil E................................................. 155
Mason, Don................................................... 178
Sand, Duane.................................................. 193
Sundblad, Phil............................................... 195
Document(s) Submitted for the Record:
Bernhard, David.............................................. 211
Biederman, Bruce............................................. 204
Jensen, Carl................................................. 201
Naylor, George............................................... 212
Sexton, Keith................................................ 205
Sokolowsi, Lori.............................................. 214
Tigner, Ron.................................................. 203
Vilsack, Thomas.............................................. 200
HEARING ON AGRICULTURAL AND RURAL COMMUNITY ISSUES
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SATURDAY, MARCH 24, 2001, LEWIS, IOWA
U.S. Senate,
Committee on Agriculture, Nutrition, and Forestry,
Washington, DC.
The hearing was held, pursuant to notice, at 9 a.m., at the
Wallace Foundation Learning Center, Lewis, Iowa, Senator Tom
Harkin, ranking member on the committee, presiding.
Present or submitting a statement: Hon. Tom Harkin.
STATEMENT OF HON. TOM HARKIN, A U.S. SENATOR FROM IOWA, RANKING
MEMBER, COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY
Senator Harkin. Thank you very much. The meeting of the
U.S. Senate Committee on Agriculture, Nutrition, and Forestry
will come to order.
I thank you all for being here. I apologize for being just
a little bit late, a little bit of headwinds out there this
morning.
This field hearing on agriculture and rural community
issues at the Wallace Foundation Learning Center is the first
in a series of hearings that we will be having here in Iowa, in
the Midwest, and other parts of the country, in order to get
ready for the rewrite of the Farm bill, which expires next
year.
Some of the work will be done this year. We will be having
hearings, getting input, advice and suggestions from different
commodity groups and individuals around the country. There was
some thought that we might do a farm bill this year, but I do
not think that will happen.
Senator Lugar from Indiana is the ranking Minority Member
on the Committee. As you know, we have a unique situation in
the Senate where it is 50-50, but Senator Lugar and I have a
good relationship. We are working together to establish an
extensive hearing record as to what we ought to be doing in the
next Farm bill. We want to cover all aspects of it.
This is the first outline. I am going to make a short
opening statement and I then am going to recognize the panel of
witnesses. I am going to ask them to keep their comments
relatively short, 5 to 10 minutes. Their statements will all be
made a part of the official record, the hearing record. Then I
would like to open it to questions from the audience.
We have an official reporter. I would ask you to take the
mic, state your name, and if it is a really complicated name
like Smith, just tell her so that the reporter can get the
accurate name down for the record. I would like to have a
fairly open discussion and suggestions from any of you who are
here.
First, I am told that we have a couple of other public
servants here: Bob Anderson, who is a Page County supervisor is
here. Please stand and be recognized. Also in attendance is Bob
Anderson, Page County supervisor, and Bob Brown Union County
supervisor. Bob Brown, thank you for being here.
Now, again, are there any other elected officials that I
should recognize that we just did not catch when you came in?
Clyde Jones, Montgomery County supervisor. Anyone else?
OK. I have one other person I will recognize. Secretary of
Agriculture Patty Judge could not be here, so she has a staff
person here. Mitch Gross who is with Secretary Judge's office
is here. I do not know where he is.
I will just make a couple of opening statements, and we
will sit down for our panel.
I am pleased to be holding two hearings in Iowa today--one
here, and then another one this afternoon in Spencer--of the
U.S. Senate Committee on Agriculture, Nutrition, and Forestry.
The testimony from our panelists and from the audience will
become a part of the official hearing record. Your comments,
ideas, and recommendations will be a great help to me and my
colleagues as we work to write new legislation and we hope
improve programs affecting agriculture and rural communities.
Let me also introduce my staff who is here. On my
agriculture committee staff, Mark Halverson, who is my chief of
staff on our side, on the Senate Ag Committee, and next to him
is Alison Fox. Alison is also on our ag committee. This is her
second visit to the Wallace Center here. She was here last
summer. Some of you may remember.
Also someone who worked on my staff for a long time and for
the last 8 years has been the state director of our Farm
Service Agency. She is back on my staff doing rural development
work, Ellen Huntoon. Ellen is here. A lot of you know Ellen.
She has done a great job in rural development and agriculture.
Also on my Iowa staff is John Moreland who is working with
agriculture and rural development issues as well. John Moreland
is back there, and next to him, Pam Ringleb. Pam, hold up your
hand so everyone knows you.
Those are my staf. If you need to get anything to me as we
run out of here to try to get up to Spencer, just speak to
them. I am sorry that Congressman Leonard Boswell could not be
here; but his staff member, Sally Bowzer is here. Sally, where
are you?
I just saw Leonard the other day, and he knew about the
hearing. He could not make it. As you know, he is one of our
great, strong supporters on the House side.
Farm families and rural communities in Iowa and across our
nation need new directions in Federal policies. They have not
shared in our nation's prosperity. Although Freedom to Farm has
positive features, it had serious shortcomings that I think are
obvious.
We have got to learn from this experience and make
necessary improvements. We have got to start by restoring a
built-in, dependable system of farm income protection that does
not require annual emergency appropriation.
We must also remember that farmers are the foremost
stewards of our nation's natural resources for future
generations. We should strengthen our present conservation
programs and adopt new ones to support both farm income and
conservation.
I have authored legislation to create a new, wholly
voluntary program of incentive payments for conservation
practices on land in agriculture production. That approach--
improving both farm income and conservation--should be at the
heart of the next Farm bill.
To meet these challenges, the next Farm bill must address
the broad range of farm and rural issues. We have got to do
more to promote new income and marketing opportunities--whether
that is through value-added processing cooperatives, creating
new products through biotechnology, developing niche and direct
marketing, and, of course, overseas trading.
I see tremendous potential for farm income, jobs, and
economic growth through clean, renewable energy from farms:
ethanol, biodiesel, biomass, wind power, and even down the way,
hydrogen fuel cells. We must also ensure that agricultural
markets are fair, open, and competitive, and transparent.
We cannot have healthy rural communities unless both farms
and small towns are doing well. We have to do more in the next
Farm bill to revitalize economics and improve quality of life
in rural communities. That includes support for education,
health care, telecommunications, closing the digital divide,
water supplies, transportation, as well as access to investment
capital for rural businesses.
That completes my opening statement. I thank you all for
being here this morning. I will now turn to our panel.
Our first witness is Dr. Michael Duffy. I will just go down
the line. Dr. Michael Duffy, professor of economics at Iowa
State University, Dr. Duffy.
Oh, excuse me, before you start, I am sorry, just a minute,
Mike. I have got a letter here from Governor Vilsack that I
want to be made a part of the record, dated yesterday. The
Governor states, ``I encourage you to develop the next Farm
bill to help farmers produce conservation commodities, improve
their bottom line, and renew the public commitment to
agriculture.'' Basically he focuses on conservation, but I just
want to make that a part of the record. Thank you.
[The prepared statement of Senator Harkin can be found in
the appendix on page 44.]
STATEMENT OF MICHAEL DUFFY, PROFESSOR OF ECONOMICS, IOWA STATE
UNIVERSITY
Mr. Duffy. Good morning. I appreciate the opportunity to be
here. As an extension comment, you know that five minutes is
going to be very hard for me, so I will try to talk as fast as
I can.
What I would like to do is cover two areas. One is the
current situation, as I see it, in Iowa agriculture and to give
you what I think are some issues that should be considered in
the new Farm bill.
First issue with respect to the current situation is with
respect to our income. We had the highest net income in 1996.
Since then it has dropped every year. In 1999, it was 1.45
billion. In 2000, it appears that it will be up, although this
is still preliminary, but I think it is very important for us
to realize that the government payments have been the backbone
of that net farm income.
In the 1990's, net government payments averaged 55 percent
of the net, and in 2000, it appears as they will be very close.
Second issue that I think is important with respect to the
current situation is in our agronomics. We have a very narrow
crop and income base in Iowa. Ninety-two percent of the
cropland is devoted to just two crops. Two-thirds of the entire
state is covered with just two crops, corn and soybeans.
Eighty-nine percent of the cash sales comes from corn, beans,
hogs, or cattle. This lack of diversity creates problems, pest
problems, environmental problems, and so forth.
Also in the agronomic area, we have seen a change in
production practices that have resulted in more yields,
increased sales, but less income for the farmers.
Net income as a percent of the gross in the 1950's was 35
percent. Today it is 20 percent, and if we take the government
payments out, it drops to 12 percent. That means farms must
have three times the sales just to stay even.
It is important to note that size and efficiency should not
be confused. The cost per bushel dissipates. The lowest cost is
about three to six hundred acres. Farms are getting bigger
because they have to earn an income, not because they are more
efficient.
Turn now to the demographics that I think are also
important to the current situation. The average age of farmers
is 52.4 years old, which is up a full 3 years from just a
decade earlier.
Today we have more farmers over the age of 65, Twenty-two
percent, than we do under the age of 35, at 10 percent. We have
more nonfarm rural residents than we do farmers, and I think
this is a source of--can be a source of conflict, but I think
it could also be a source of benefits, if we choose to move
that way.
Changing structure of agriculture is another area that we
are all familiar with, but I think it is important for us to
realize 50 percent of the farmers in Iowa had sales of less
than 50,000. Another 37 percent had sales between 50 and
150,000, which means that 87 percent of the farms in Iowa are
small farms by the USDA's definition.
What is happening now is that we have a few very large
farms and a lot of small farms that, in my opinion, we are
losing the heart of what made Iowa what it is, and that is the
average family size farm. This is happening in all sectors,
including processing, retailing, and so forth.
Another area is the environment. We continue to have odor,
water, soil erosion, a series of problems in spite of the
record government payments. What we need to do is address some
of these issues, recognize that the current system is seriously
flawed.
I would like to move on then to some issues that I think
need to be considered for the Farm bill. First of these is
energy.
We have had a serious impact on the cost of production. My
estimates for Iowa is that it was a 6-percent increase in 2000
to 2001 for corn, and I concur with what you said, Senator
Harkin, about we need to continue to look at alternative uses,
alternative crops.
We need to look at how on our farms we can make ourselves
self-supporting in energy, and I think that what we need to do
is to make sure that we continue to look at energy as we move
into the future, because it is going to be even more important
and we are not going to go back to where we were with the cheap
fuel.
Second major issue that I think needs to be addressed in
the Farm bill is a change in the definition of a farm. The
$1,000 of sales is antiquated, and I feel that it hurts
everyone.
In Iowa, 10 percent of our farms had sales of less than
ten--or less than $1,000, and I think that is just ridiculous
to call them farms, and then we have programs that are directed
and, as I said, I think that it hurts everyone.
Payment policies, I think we need to start looking at
programs that are going to pay to support people, not
commodities. To that end, I support the Conservation Security
Act that you put forward.
I have also submitted into the record a proposal, a modest
proposal that we have, looking at some type of a guaranteed
minimum wage for farmers.
Regardless, we need to do something to support people and
not just commodities. I am very concerned that what we are
doing is bickering, and we are going to end up going to the
lowest common denominator and not seeing any real changes. I am
about out of time, so I will talk fast.
Level of payments, I think it is extremely important for us
to look at. That 55 percent has been factored into rents, land
values, and even the infrastructure. If we go cold turkey, we
are going to have a lot of problems, so whatever we do, I hope
we proceed with caution.
I would also like to encourage you to continue to look at
programs for small and beginning farmers, but do not just throw
money at them.
Look at alternatives and options that concentrate on their
resources. For too long we have tried to get rid of people, and
now we need to try to help people in agriculture. A lot of
people say this is inevitable, but nothing is. We just have to
decide what type of agriculture we want and to go for it. More
than just raw products should be in our future.
Thank you.
[The prepared statement of Mr. Duffy can be found in the
appendix on page 45.]
Senator Harkin. Thank you very much, Mr. Duffy. Great
statement. Thank you.
Next we will have David Williams, a long-time friend and
conservationist and farmer from Villisca, Iowa. Dave.
STATEMENT OF DAVID WILLIAMS, FARMER AND WALLACE FOUNDATION
LEARNING CENTER, PAGE COUNTY, IOWA
Mr. Williams. Thank you. Good morning. Welcome to the
Wallace Foundation for Rural Research and Development. I am
David Williams, a family farmer from rural Page County.
Senator Harkin, I am pleased to have you come to Southwest
Iowa to visit us here at the Wallace Foundation.
We are proud to host this event here today. For your
information, for those of you who have not been here, we have
1,200 members in 19 counties of Southwest Iowa. We house the
extension offices here and some other organizations.
We are very unique in that we have been able to pull this
together to house this in a rural area. Some of our goals are
not just research, but also outreach and education and site-
specific research that you will see on this farm, so we are
very proud of this.
I would like to address the 2002 Farm bill and the current
Freedom to Farm Bill. The Freedom to Farm Bill, to my way of
thinking, from the beginning was a--written by and for
corporate agriculture. Simply put, allowing agriculture
producers to plant unlimited acres of corn and soybeans without
an acreage or bushel limit was a disaster that previous history
revealed.
The benefits of the Freedom to Farm Bill to corporate
agriculture include increased sales of seed, fertilizer,
chemicals, and the lower dollar grain prices to the
multinational grain traders and lower prices that gave easy
access to the grain and livestock producers. Corporate
agriculture has welcomed and profited enormously by large
supplies of cheap grain.
Feed grain, excuse me--corn, soybeans, and wheat--in the
Midwest have sold at a price below the cost of production and
has allowed the integrators of industrialized agriculture to
expand at a rapid rate. The expansion of the large corporate
livestock operations has been especially evident in the huge
expansion of megaswine farms.
There is no way family farmers can survive producing grain
and livestock below the cost of production. It is obvious with
50 percent of the total farm income coming from government
payments that Freedom to Farm has been a dismal failure.
Here are some ideas I would submit for the 2002 Farm bill:
Paying farmers who practice sustainable conservation practices
would be a first step in protecting our soil and water quality.
Monetary incentives would go to farmers who installed
specific conservation practices. Those farmers not adopting
those government conservation practices would not receive
government payments. Paying farmers to manage the resource base
will actually do more to improve their income than the current
system.
Senator Harkin, your Conservation Security Act has really
brought that to the attention.
We need to target farm programs that benefit medium-sized
farms. These are the farms most at risk financially. Failure to
do this will be the demise of family farms. The current farm
programs follows the rule that the bigger you get, the more
money you will receive. Thus, we subsidize megafarms, bringing
higher cash rents and higher land prices.
We should have a safety net that puts a floor under grain
prices. A well-planned, on-the-farm grain reserve would also
benefit the farmer and be a cushion for a crop failure. There
are other parts of the safety net that I did not mention that I
think are important.
We need to close payment limitation loopholes. We need to
focus the bulk of the support on each farmer's first $250,000
of production.
I obtained from the Page County NRCS office the total
dollar amount requested for conservation construction practices
that are on file for cost-share in our county. We have a county
that had a very high percentage of conservation, and we have a
3- to 4-year waiting list.
Conservation practices moneys requested in our county for
Federal and State government amounts to $4.7 million. Matching
that 4.7 million means that we are putting $9.4 million of this
conservation in our county in land, and that is to backlog the
conservation practices in Page County.
Some other comments: Encourage and provide loans to
producers who come together in a cooperative to add value to a
value-added product. Here in the Wallace Foundation we have got
three different groups that we work with on livestock and put
together a value-added grain.
Pass the Agriculture Revitalization and Enterprise Act. I
do not have that with me. It is in the packet, Senator Harkin.
It is called ACRE. I will see that you get a copy of that.
Enforce mandatory price reporting. That has been--kind of
held up, and we need to see that that is happening.
Scrutinize and enforce antitrust activities of the food
system. This is critical to the independent producers, and I
mean that, critical. It seems like we see three, four, five
major food suppliers that are trying to control, especially the
red meats and grains.
We need to revisit the pork checkoff vote overturned by the
current secretary of agriculture.
In summary, we are at a serious crossroad in the
industrialization of agriculture versus the independent farmer.
Our farm organizations, commodity groups, our land-grant
universities, and our state and Federal Government should draw
a line in the sand and decide whether they are going to support
independent farmers or corporate agriculture. These groups
cannot continue to straddle the fence if independent farmers
are to remain viable.
To quote Aldo Leopold, this is something in my life that
has been a part of my thinking. In fact, Mike and I serve on
the Leopold Board at Iowa State. This is a quote that comes
from his part of the land ethic, and this is the quote: ``We
abuse land because we regard it as a commodity belonging to us.
When we see land as a community to which we belong, we may
begin to use it with love and respect.''
To me, this speaks to the sustainability of the land and
family farms. I appreciate the opportunity to share my ideas
and thoughts with Senator Harkin and the Senate Agriculture
Committee.
[The prepared statement of Mr. Williams can be found in the
appendix on page 64.]
Senator Harkin. Thank you very much, Dave.
Senator Harkin. Next, we will go to John Askew, president
of the Iowa Soybean Association. Good to see you on home turf
here, John.
STATEMENT OF JOHN ASKEW, PRESIDENT, IOWA SOYBEAN ASSOCIATION
Mr. Askew. Good to see you too.
Senator Harkin. Well, thanks.
Mr. Askew. Good morning. My name is John Askew. I am a
soybean producer and family farmer from Fremont County, Iowa,
and currently serve as president of the Iowa Soybean
Association. On behalf of the members of the Iowa Soybean
Association, the largest state row-crop association in the
United States, I wish to thank the Senate Agriculture,
Nutrition, and Forestry Committee and Senator Harkin for the
opportunity to testify today on the important topic of the
future of agriculture in the United States.
As we rapidly approach the 2002 Farm bill, it is important
that Iowa soybean producers provide input on many of the
critical issues facing agriculture. Iowa is a leader in soybean
and agricultural production. The future direction of the
agricultural policy is critical for a state such as ours. As a
future of agriculture goes in Iowa, so too does the future of
our state.
Many important decisions must soon be made regarding U.S.
production agriculture. These decisions will cover a broad
spectrum of issues, from current domestic farm programs to
expanded trade opportunities and development. Iowa soybean
producers understand that these decisions will have significant
budget impacts.
We hope these important budget decisions will carefully
balance the social and economic needs of the farmer and rural
communities and the need of the public for a wholesome, safe,
and plentiful food supply.
From the perspective of Iowa soybean producers, long-term
agricultural policy and budget considerations surrounding the
upcoming 2002 Farm bill should focus on the following key
areas: First, agricultural policy should focus on enhancing the
viability and the long-term global competitiveness of Iowa and
U.S. producers.
To this end, Congress and the administration should meet
the unfulfilled promises of the 1996 FAIR Act. Such promises
include the expansion of trade opportunities and markets,
policies to increase domestic demand and utilization of
agricultural products, increased funding for agricultural
research, improvements in river infrastructure, and meaningful
tax and regulatory reform.
If these promises had been kept, the large government
outlays that have been required in recent years to support farm
income may not have been needed. Congress must complete the
unfinished agenda and provide support to agriculture in the
interim.
We must address expanding our infrastructure capabilities.
The development of local food systems and value-added
processing and marketing systems is critical for the continued
viability of rural America. Additionally, the establishment of
a national energy policy which addresses increased
opportunities for biofuel use should be a top priority.
Additionally, any decision on the upcoming farm bill should
address and work toward improving risk-management tools and
subsidies for crop insurance.
As an organization, we also believe that efforts underway
to establish standards for financial and production systems are
critically important. We are convinced that helping Iowa and
U.S. farmers gain access to and understand the necessary
information regarding their farming operations is a key to
leveling the playing field.
Second, we believe that soybeans should be treated
equitably under the next Farm bill. Agricultural policy
decisions must provide improved safety nets for producers.
Policy should include the continuation of planting flexibility,
maintenance of the current--current marketing loan rates and
the loan deficiency payment structure, and the establishment of
a counter-cyclical program.
Specifically, current loan rate ceilings should be set as
floors, including the soybean loan rate of 5.26 per bushel.
A third and very important focus of upcoming farm bill
decisions should involve land conservation practices and the
environmental performance of agriculture. As the front-line
stewards of the land, producers are uniquely positioned to work
toward increased and improved environmental performance.
We support Senator Harkin's leadership in proposing the
Conservation Security Act. The Iowa Soybean Association is
developing a voluntary, systems-based approach to improved
environmental performance called Certified Environmental
Management Systems for Agriculture, or CEMSA. We believe CEMSA
could be a complimentary ingredient of future conservation
programs.
In conclusion, the Iowa soybean producers very much
appreciate the opportunity to provide these comments. We wish
the committee well in important decisions it must work on in
the future of American agriculture. We are committed to working
together in the 2002 Farm bill debate to develop the best
possible farm policy for all Americans.
Again, I thank the committee for its time and consideration
today.
[The prepared statement of Mr. Askew can be found in the
appendix on page 69.]
Senator Harkin. Thank you very much, John, on behalf of the
Iowa Soybean Association.
Senator Harkin. Next is Shirley Frederiksen, Golden Hills
Resource Conservation and Development.
STATEMENT OF SHIRLEY FREDERIKSEN, GOLDEN HILLS RESOURCE
CONSERVATION AND DEVELOPMENT DISTRICT
Ms. Frederiksen. Thank you, Senator Harkin, for allowing me
to speak at the Senate Agriculture Committee hearing.
Resource Conservation and Development is a program
administered by USDA/National Resource Conservation Service
providing technical assistance to private nonprofit
organizations. Golden Hills RC&D is a nonprofit organization
that encompasses eight counties in Southwest Iowa.
The goals of the Resource Conservation and Development
board focus on conserving the Loess Hills, strengthening the
agriculture economy, developing small, rural businesses,
increasing tourism, and assisting underserved clients. The
board's vision is to strengthen and diversify the economy of
rural communities in Southwest Iowa.
I would like to focus today on some current projects of the
Golden Hills RC&D board.
First, the Loess Hills and tourism. The Loess Hills
National Scenic Byway is a system of more than 220 miles of
county and state roads through the Loess Hills, consisting of a
main route and excursion loops.
This tourism project is an excellent example of rural
development for the 18 communities along the byway. Travelers
stay at bed and breakfasts, stop at the old-fashioned soda
fountains, eat at pie parlors and restaurants, and visit the
local artisans.
Scenic America, the nation's leading scenic byway
organization, named the Loess Hills Scenic Byway one of the ten
most outstanding scenic byways in the country. Each year more
than one million people travel the Loess Hills Scenic Byway and
visit its attractions.
Another focus is the small business development. Prairie
restoration in the Loess Hills is a project providing cost-
share to producers clearing invasive species from their native
prairies so they can graze their cattle.
Over 99 percent of Iowa's prairies are gone. The Loess
Hills contain the majority of undisturbed prairie remnants and
comprise the last intact prairie system in Iowa.
The prairie restoration project has spurred many
entrepreneurs to diversify their existing, traditional
agricultural businesses. Some of the developing businesses that
they have used as a sideline include: Tree-shearing, native
grass seed collection, native grass seeding for hire,
prescribed burn business, and other cedar utilization
businesses, such as mulch and biochips.
Strengthening agriculture is the third area I would like to
discuss. Developing our alternative agriculture and local food
systems is another developing project. One of the efforts
underway by the Golden Hills RC&D board is to revive the grape
and wine industry in Western Iowa.
At one time Iowa boasted more than 6,000 acres of
vineyards, 3,000 of which were in the Loess Hills. This
distinct--The distinctive flavor of the fruit grown in this
soil made the Loess Hills a perfect location for vineyards and
wineries.
For growers, the income potential in today's market with
conservative figures is approximately $1,800 net per acre for a
fully mature vineyard. Adding value to that grape by producing
wine increases the profit potential to between $7,000 to
$10,000 per acre. Of course, that is using conservative
figures, since I am a conservative person.
Golden Hills is very proud of the work that they have
accomplished over the past 20 years, and with access to
resources, project opportunities yet to be explored include:
First, local food systems, integrating more locally produced
food into the restaurants and food-service industry in Western
Iowa.
Second, alternative energy. There are a couple of ways to
increase profits, and I hope Mr. Duffy will agree with these.
One is to increase the prices of products, and two is to
decrease purchased inputs. Utilizing alternative energy reduces
input costs, thereby increasing net profits for farmers and
businesses alike.
Golden Hills RC&D would like to investigate wind and solar
energy and the use of biomass as alternative energy sources for
rural America.
Third, is ag tourism. We have a wonderful traditional
agricultural system here in Iowa, and by sharing that ag
experience with visitors to the state, we can increase our
profits again through tourism.
In the next 20 years, we look forward to leading in the
development of these projects and others.
Thank you for the support of the RC&D program, because I
know Senator Harkin is a large supporter of that, and for
considering a strong rural development component in the
upcoming farm bill.
[The prepared statement of Ms. Frederiksen can be found in
the appendix on page 76.]
Senator Harkin. Thank you very much. Appreciate it. Thank
you.
Senator Harkin. Next, we have Sam Carney who is the vice
president of the Iowa Pork Producers Association. Welcome.
STATEMENT OF SAM CARNEY, VICE PRESIDENT, IOWA PORK PRODUCERS
ASSOCIATION
Mr. Carney. Thank you, Mr. Harkin. I am pleased to testify
today on farm commodity programs and other policies that will
ultimately become part of the next Farm bill.
I am Sam Carney, and I produce hogs, cattle, corn, and
soybeans with my brother and my son. Our farm supports these
three families near Adair, Iowa. I am also vice president of
Producer Services for the Iowa Pork Producers Association.
My comments today will focus primarily on livestock
components of the next Farm bill.
While much of the discussion and debate on the next Farm
bill will focus on grain production, please keep in mind a
substantial portion of Iowa's corn and soybean crops are fed to
livestock and poultry. The pork industry represents a major
value-added activity in rural America and major contributor to
the overall U.S. economy.
While the issue at hand today is the future of commodity
programs, I believe the next Farm bill must also focus on
conservation, trade, market competitiveness, environmental,
food-safety, and biosecurity issues.
Agriculture is moving from an unregulated to a regulated
industry in most aspects of our farming operation. Nonetheless,
livestock farmers, except dairy farms, have operated in a
marketplace without government subsidies and controls.
However, we have a huge stake in the next Farm bill
discussion. Approximately 60 to 65 percent of the cost of
raising hogs is from feed costs. Corn and soybeans are the
major components for our feed rations.
Therefore, any changes in commodity programs that affect
the price of feed have a profound financial impact on livestock
operations. As major users of the grain and oilseed
commodities, problems and issues of livestock producers
ultimately affect grain and oilseed producer prices.
As for conservation and environment, livestock producers in
several states face or will soon face costly environmental
regulations as a result of state or Federal laws designed to
protect water quality. This includes Federal regulations under
the Clean Water Act for TMDLs and the proposed new CAFO permit
requirements. Federal regulators also are exploring the
possibility of expanding Federal regulation of agriculture
under the Clean Air Act.
Since 1997, EQIP has accumulated a backlog of 196,000
unfunded applications for approximately 1.4 billion in
assistance, more than half of which is for livestock producers.
Farmers and ranchers are on the verge of a new regulatory
era, and it is impossible for us to pass on the costs of
regulatory compliance. We are price-takers, not price-makers.
While I believe all farmers are true environmentalists, a
typical operation like mine cannot afford the investment it
will take to comply with new regulations. I urge the committee
to provide the assistance necessary to implement sound
conservation practices to protect our nation's air and water.
I urge the committee to support at least ten billion over
the life of the next Farm bill in spending for USDA
conservation practices to address livestock's environmental
needs, specifically for water and air quality.
These funds should be used to provide financial incentives,
cost-sharing, and technical assistance to livestock, dairy, and
poultry producers to develop and implement manure and nutrient
management plans that are built on practices that protect water
and air quality.
Any successful conservation assistance program must be
available to every producer, regardless of the type of
production, whether confinement, open feedlots. Of course,
payment limitations could apply similar to row-crop payments. I
feel it is appropriate and fair that the livestock community be
treated in the same manner as the row-crop producers through
the use of similar payment limitations.
As for trade expansion, U.S. pork producers became net
exporters in 1995 for the first time. In order to sustain the
profitability of our producers, we must do a better job of
product marketing and doing away with market-distorting trade
practices.
Pork producers believe funding for the Market Access
Program should be boosted. Also the trade promotion authority
should be renewed and the U.S. position in the next trade
negotiations for agriculture should include the total
elimination of all tariffs, all export subsidies, and all
trade-distorting support for the pork and pork products by
other countries.
In addition, we believe that the Global Food for Education
and Child Nutrition Act should include pork, beef, poultry, and
dairy products as well as commodities.
As for animal diseases, if the current situation in the UK
and Europe has taught us anything, it shows how important
biosecurity issues are to U.S. livestock farms.
Although the U.S. has not had to face foot-and-mouth
disease since 1929, Congress and USDA must be diligent to
ensure that all preventive measures are ready--are taken and
that our effective and rapid response could be ready when
needed. This includes surveillance, increased diagnostic
capabilities, and a rapid response plan.
While I believe most of these initiatives are underway,
Congress should fund 380 million for renovation of the Animal
Diagnostic Center in Ames. Quite frankly, this cannot happen
fast enough.
As for the concentration of livestock industry, while not
directly related to farm bill discussions, I want to touch on
livestock concentration issues. I have attached a summary of
the IPPA activities on captive supplies in the livestock
industry, which date back to 1975.
Obviously, our work is not finished. Therefore, I urge
Congress to continue supporting a free flow of market
information, such as the mandatory price reporting legislation.
That legislation was an important step in the right direction,
and I thank you for helping USDA fund its implementation.
I have also attached a bulletin on the pork checkoff, which
I am not going in detail at this time.
I appreciate the opportunity to be here today. I look
forward to working with you, your staff, and your committee as
deliberations on the next Farm bill continue. Thank you very
much.
[The prepared statement of Mr. Carney can be found in the
appendix on page 78.]
Senator Harkin. Sam, thank you very much for your
statement.
Senator Harkin. Last we have Aaron Lehman who is with the
Iowa Farmers Union in Polk City, Iowa.
STATEMENT OF AARON HELEY LEHMAN, IOWA FARMERS UNION
Mr. Lehman. Senator Harkin, my name is Aaron Heley Lehman.
I am the legislative director of Iowa Farmers Union, and I also
farm with my family as the fifth generation on our family farm
in Central Iowa. It is a pleasure speaking with you today on
behalf of our family farmers.
Senator, Freedom to Farm was adopted when commodity prices
were high and expectations for agriculture were unrealistic. In
reality, the promise of a broad, market-based environment of
opportunity for farmers was shattered by an ongoing commodity
price collapse.
The dream of farmers less entangled in government
involvement has turned into a nightmare of government
dependency. While the government subsidies have provided relief
to farmers struggling to survive, the payments have the side
effect of fueling the trend toward larger and larger farms and
concentration in agribusiness.
We are not asking you to tinker around the edges of a
failed policy. We are asking for a return to common sense in
farm policy.
We believe that a primary goal of the commodity program
should be to provide economic stability and opportunity for
farmers; a program which recognizes market realities, resource
sustainability, and food security and safety issues.
We believe that commodity loans should be dramatically
modified to better reflect the cost of production for farmers.
The current program artificially capped loan rates and ignores
the marketplace, ignores the production factors, and ignores
the rising costs of crop inputs.
Our proposal would place that loan rate as high as
possible, but not lower than 80 percent of the 3-year average
cost of production. It is time our loan rate reflected economic
reality and common sense.
We believe that we must take steps to control our
inventory. In this regard, no other production industry ignores
the marketplace like agriculture currently does. We are foolish
to expect a marketplace, foreign or domestic, to blindly comply
with our inventory needs.
To manage our inventories, we believe we should establish
reserves to ensure our commitment to renewable fuels production
and to humanitarian food assistance.
Finally, we should establish reserves in a limited, farmer-
owned reserve program. Participants should receive annual
storage payments in exchange for storing crops until prices
reach the cost of production.
In addition, no industry can expect to continue to produce
in a volume that exceeds market demand. We believe the
Secretary of Agriculture should have the discretionary
authority to offer a voluntary set-aside program. We feel that
farmers should be rewarded with a raise in commodity loan rates
which reflects the level of their own set-aside.
We feel strongly that program benefits need be directed to
family size producers. Unrestricted government payments, which
the current program effectively provides, leads to large
farmers using government assistance to bid up land prices and
cash rents to levels completely out of line with commodity
prices.
If farmers want to farm half the county, let them do it,
but do not let them take taxpayer money to help finance it.
As farmers, we have a responsibility for sound land
stewardship. Farming, as in our family, stretches across
generations. We do not own land as much as we borrow from our
children and try to make the best use of it as our own
contribution.
Senator we strongly support the Conservation Security Act
and we urge Congress to expand the Conservation Reserve
Program.
Enhanced rural development programs must be an integral
part of the Farm bill discussion, and that enhanced cooperative
development should be central in that discussion.
Production research should be directed to creating value--
creating value that benefits family farmers, and funding should
be targeted to the multi-functional aspects of agriculture,
including less capital intensive technologies, alternative
value-added products, energy conservation, and renewable energy
development.
Concentration of market power among a few large and highly
integrated agribusinesses has reached an all-time high, and
steps need to be taken to address this concentration, and until
these steps are taken, a moratorium on agribusiness mergers
should be immediately enacted.
In addition, discriminatory pricing and packer ownership of
livestock should be immediately halted. Checkoff program work
should be targeted to the benefit of family size producers and
should be accountable to producers. We feel that the producer
referendum ballots should be respected and not ignored.
In closing, Senator, your work in this next year on
agriculture issues will leave a permanent mark on the direction
of agriculture in the 21st Century.
While I want our policy to make us leaders in production
and efficiency, I want more so that our policy points us to a
strong, healthy, rural Iowa and rural America. I want to pledge
our efforts to help make agriculture policy responsive to
farmers and rural communities while providing consumers with
safe and secure food.
Thank you for your time, and I look forward to answering
any questions you may have.
[The prepared statement of Mr. Lehman can be found in the
appendix on page 83.]
Senator Harkin. Thank you very much, Aaron. I appreciate
you being here.
Senator Harkin. Let me see if I can recap a little bit here
some of the things we have heard. Dr. Duffy, you talked about
the income of farmers and how it has dropped down considerably
since the high in 1996, and made the point that 55 percent of
our net income came from government payments and that 92
percent of our cropland in Iowa is devoted to two crops.
He said that in the 1950's the net income of farmers was
about 34 percent of gross. Now it is down to 20 percent of
gross. According to USDA definitions, 87 percent of Iowa farms
are small farms with sales less than $250,000, is that correct?
Dr. Duffy. Yes.
Senator Harkin. Dr. Duffy made the point that we should do
some things in the Farm bill, like looking at being self-
sufficient in energy on farms. Might want to question you some
more about that.
The program should support people, not commodities. He made
a statement about some form of minimum wage for farmers. I
would like to investigate that. It was also pointed out that
the level of payments that we have had have been built into
land values and rents and things like that and that we just
cannot go cold turkey in terms of doing away with those.
First of all, I have a question of the Wallace Center. Are
you hooked up with the ICN?
Mr. Williams. Yes, we are.
Senator Harkin. I saw that. I thought that you might be.
You have got a cable coming out here.
Mr. Williams pointed out that over 50 percent of the
payments were from the government. He suggested that in the
Farm bill, we have good conservation practices to manage our
resource base, and that we target our programs.
He mentioned the use of a grain reserve and a safety net,
and that we close payment limitation loopholes. Mr. Williams
noted that there was a three- to four-year waiting list in Page
County for conservation cost-share programs and that we have a
long backlog of those.
He also mentioned ACRE, which I have to have you explain to
me, because I am not all that familiar with it. He mentioned
the need for mandatory price reporting, and the need to
investigate antitrust activities. Mr. Williams stated. that the
pork checkoff should be revisited.
Mr. Askew talked about balancing the social and economic
needs of farmers and growth in rural communities. He said in
the Farm bill that we have to focus on global competitiveness,
expanding trade opportunities, research, and tax and regulatory
reform.
He mentioned energy policy and biofuels in the new Farm
bill. Mr. Askew also suggested that we should look at risk-
management tools and insurance, and also the information flow
to farmers. I assume you mean closing that digital divide,
making sure that farmers get adequate information and up-to-
date information, and ensuring that soybeans were treated
equitably in the new Farm bill. He mentioned the LDP structure,
loan deficiency payment structure, and a counter-cyclical--need
for some counter-cyclical-type of program. Lastly, Mr. Askew
noted land conservation and Conservation Security Act and the
program that the Iowa soybean producers have come up with
called the Certified Environmental Management Systems for
Agriculture, the CEMSA program.
Shirley Frederiksen talked about the Loess Hills Scenic
Byway, one of the ten best in the United States, and the
prairie restoration project. You mentioned a number of
different things regarding the grape and wine industry.
I can remember as a kid my dad buying Betty Ann Wine.
Anybody ever heard of that? You drank that wild stuff?
I am not kidding you, there used to be big wineries over in
Council Bluffs called Betty Ann Wine, and they had all these--I
remember one time as a little kid seeing all those vineyards
over there.
Ms. Frederiksen indicated that wine could produce $7,000 to
$10,000 per acre. She also spoke about local food systems,
energy, solar, wind, biomass, ag tourism. Their thrust was
really that we have to focus on rural development in our Farm
bill.
Mr. Carney, with the Iowa Pork Producers, said that we
should focus on conservation, trade, market competitiveness,
the environment, food safety, and biosecurity. He reminded us,
as we always need to be reminded, that any changes in commodity
programs do affect livestock operations one way or the other
and that always has to be taken into account. Mr. Carney also
mentioned that this EQIP backlog of 196,000 is what you
mentioned in the EQIP program.
Mr. Carney stated that we need a minimum of $10 billion in
the Farm bill for conservation over the life of the Farm bill.
He indicated that payment limitations could be used also in
livestock as we do also in row-crop production.
He also mentioned trade and boosting the Market Access
Program and including meat products in the Food for Education
Program. I assume you mean that that is that new school lunch-
type thing we are talking about.
Mr. Carney mentioned the need for rebuilding and
renovating the National Animal Disease Center at Ames. That
$380 million mark, by the way, stands now at 446 million, so
the sooner we get it built, the cheaper it is going to be.
He indicated that concentration and really enforcing more
and getting more enforcing for the mandatory price reporting.
Mr. Lehman, representing the Iowa Farmers Union talked
about the payments basically has fueled the trend toward larger
farms, our goal in the Farm bill ought to be economic
stability, opportunity to family farmers, resource
sustainability, and food security.
He pointed out that the loan rate, ought to be set at the
minimum of 80 percent of the 3-year average cost of production,
and that we need to control our inventories, like with
reserves, renewable fuels, and some kind of humanitarian food
assistance. Mr. Lehman indicated the need for a farmer-owned
reserve and for annual storage payments for farmers for the
reserve program. He said that benefits ought to be targeted to
family sized producers.
Mr. Lehman also referred to the Conservation Security Act,
expansion of conservation programs, rural development,
enhancing cooperative developments, and farmer-owned
cooperative developments.
He said our research should be to create value that would
benefit the family farms, enforce antitrust laws, and stop
packer ownership of livestock.
Does that basically summarize the testimony? Again, I thank
you, and what I would like to do is just--I have just a few
questions, and then we will open it to the audience.
For Dr. Duffy I just want to ask: If there are only modest
deficiency payments from increasing farm size above 300 to 600
acres, as your Iowa Farm Business Association data indicates,
would you say that government payments which are directly
linked to production and acreage might be offering alternative
incentives to grow even larger?
Dr. Duffy. I want to make sure that we are clear. What I
was talking about was the cost per bushel dollars that it would
cost to produce it.
Senator Harkin. Yes.
Dr. Duffy. Then, yes, because the larger you get, the way
that the program is set right now, particularly with the LDPs,
the more Federal money you get, the more you produce, and so as
we move on out, basically what we have in the jargon is an L-
shaped average cost curve, so we have initial economies of
size, and then those are dissipated, and then it flattens out,
and the data for Iowa shows somewhere between three to six
hundred acres is that low point, and then people just move
along that cost curve. As they move out, the more bushels you
produce, the more payment you get.
Senator Harkin. What you are saying is there may be kind of
a perverse type of an impact. In other words, we have the
commodity program, we have the payments, the LDPs. I assume you
are including the AMPTA payments on that?
Dr. Duffy. Yes.
Senator Harkin. Would I be right in saying or assuming that
if you are bigger and you get more payments, then you get more
money, that might enable you to bid up perhaps your neighbor's
land in terms of getting larger? In other words, you get more
money, so would it have a perverse impact of actually farms
even growing bigger?
Let me rephrase that. Do our farm programs today, in your
estimation, lead to larger farms? That is about as simple as I
can make it.
Dr. Duffy. I believe they do, yes. Because, as you move out
and increase the payments, the larger you are, that it
encourages an increase in size.
I also think that when you look, the payments that came
out, I remember when the Food Security Act--or the Freedom to
Farm was first passed, and I had a landlord call me and was
asking about how this worked and so forth, and I said, ``Well,
you are under cash rent and so you are not eligible for any of
the payments.'' I had to wait until she was done laughing and
said, ``Just watch me. I will get them.'' In other words, she
just bid up the rent.
It works in a lot of different--The programs are exerting
all kinds of influences on rents, on land value, on the
infrastructure. It is--We need to be very conscious of when we
go in and we tinker with, if you will, that that has the
intended as well as unintended consequences. The biggest reason
farms are getting bigger is because they have to generate an
income, and the reason they have to generate an income is
because we have developed production technologies where we
basically just pass money through the farm.
This is a term coined by Lord Cochran about the technology
treadmill, where we just--you need more land, so you buy bigger
equipment. You buy bigger equipment, and your costs go up, so
you need more land. Then you adopt technology so that you can
farm more land. You have more equipment so you can farm more
land, so you bid up the rent so you can justify the equipment,
and around and around and around she goes.
There is a variety of reasons, and I would be happy to go
into it with you, but the government programs, do they cause
per se? Maybe not. Do they not do anything to discourage?
Definitely.
Senator Harkin. I see what you are saying. In some ways you
mean the System. Obviously, a farmer today with the new
equipment and new technologies obviously can crop a lot more
acres than a farmer could 50 years ago, 30 years ago, 20 years
ago. There is no doubt about that, right?
The farmer can plant and crop more acres with bigger
equipment, faster equipment, better technology, better
knowledge, better information on planting, better hybrids, for
example.
I guess my question is though, and I have often thought
about this: Yet an individual farmer, I mean there is only 24
hours in a day, only 7 days in a week, and a farmer has to
sleep sometime, and they have to eat. They have to tend to
their family. They have to do other things.
I mean there is only so much time within that time
constraint of a farmer. It seems to me there is just some limit
on how much that farmer can actually do. I mean, I do not know
where that is, but it may be a range, depending upon the land
and the structure of the land and how clear the land is and all
that stuff, but it just seems to me that there is some range in
there where after you get to a certain point, farmers just
simply cannot farm any more land and still be efficient. I
guess I am talking about efficiency.
Mr. Duffy. That is why occasionally within the data from
the Iowa Farm Business Association I believe 7,000 acres is the
largest farm that is in there, and we have farms bigger than
that here in Iowa, but there is some argument that rather than
an L-shaped, we actually have a U-shaped with a very long, flat
bottom and then actually you reach a point where your costs
start going back up, and you--primarily you are going to exceed
your management ability.
Senator Harkin. Yes.
Mr. Duffy. You also shift from being a family farmer, in my
opinion, to being a personnel manager, because you have so many
hired men or women, and then you become--you are operating--you
are managing people rather than managing the land.
Senator Harkin. I see. I am going to throw it up to the
panel, because it is general discussion here. You mentioned one
other kind of a, if I might use the word ``provocative'' idea,
some form of minimum wage for farmers. Do you want to tell me
what you mean by that.
Mr. Duffy. It was not intended to be provocative. It was
intended to--I mean----
Senator Harkin. I mean provoking thing.
Mr. Duffy [continuing.] OK. I do not like to cause trouble.
[Laughter.]
Mr. Duffy. Not too much. Dr. Lasley and I were having a
conversation 1 day, and we were talking about the current
situation and where we are going and the concern that we have
that people are at loggerheads and they are concerned about
what is going to be just for them and not really looking at the
whole picture, if you will.
Senator Harkin. Yes.
Mr. Duffy. Then we came up and we decided that--Paul
suggested, well, what about if we have a minimum wage for
farmers where we were paying people? I worked on and developed
a proposal that I included with my testimony, and I have copies
of it out there, and I would love for people to look at it.
Basically the idea of the proposal is that a farmer would
be paid based on the number of hours that they work and up to a
full-time equivalent, and then beyond that they would get more
payments, and less than that, only get paid based on what they
worked.
The way that they would get paid, the number of hours would
be determined by the number of acres and the crops that they
had, the amount of livestock that they had. We have fairly good
estimates on the amount of time that it takes per litter or per
acre, and then you would just multiply that out.
That would give you your number of hours, and if that
exceeded--and we used 8-hour days, 7 days a week, 50 weeks a
year, and those are things that could be debated. That comes up
to 2,800 hours, and so in a nutshell, but that is what we have.
Senator Harkin. That is in this paper?
Mr. Duffy. In the proposal, yes, sir. I do not know. To me,
it is trying to support the labor that is involved. It offers
all kinds of neat advantages, in my opinion.
It is totally divorced from the market so that I feel that
it would be a green box as far as WTO is concerned. You would
have total freedom to plant. You could plant whatever you
wanted. Offers a lot of different kinds of features. I offer it
for yours and the group's consideration.
Senator Harkin. That is what we need. We need to start
thinking outside of the box, as well as inside the green box.
Any other thoughts about--I am also concerned about the
whole aspect of trade.
Now, when you say ``soybean producers,'' we are in
Washington talking about what is happening in Brazil and the
expansion of crops here.
Last year, for example, I was in China in August and
discovered, boy, they have got a lot of land in production, and
they actually were exporting corn. We thought there was going
to be a market for us. They are actually exporting corn, but I
do not know how many good years they have in a row. They are
expanding their crop production in China too as well as
soybeans. I do not know if they export soybeans or not. I do
not know about that.
I know they exported corn last year, so I am just wondering
what we see in the way of trade overseas. I mean how can we
expand trade? We looked at markets, but if Brazil is putting
all this practically free land in production, and how do we
compete with that? That is what I do not understand.
Mr. Askew. Well, first we should look at sanctions' reform.
We have sanctions against probably two-thirds of the people out
there in this world, that we are not able to deliver food and
we can. That is an important thing. Just the other day with
Iraq, with one example of one way and then turn right around
and go back the other way.
It is important because we export half of our soybeans out
of this country. Brazil and Argentina are competitors to us. We
have to understand that. Are they more efficient than us? No. I
mean logically look at this.
They are using Case IH combines that are shipped from here
in the United States down there. They are using seed that is
very poor. They get so much rain. They have to use so much
fertilizer, so many insect problems.
It is not that great down there, and we just had a group
that came back from Brazil and Argentina, and their first thing
was, keep it up, because they are hurting down there, but are
we going to run them out of business?
We had a group up here this summer that were from
Argentina, and we got to talking to them. There is a language
barrier there, but you could get a pretty good indication, but
you know what? Looking at them is like looking just out here in
this group. They have the same concerns we do. They have
farming in their blood. They are going to keep going as long as
they can until they lose money, and they are losing money down
there.
The thing is, we bring our soybean prices up and we have
that same--there will be land in production. It will take 50
years to get it fully in production, but right now the
bulldozers are not moving down in Brazil. They were back in
1995 and 1996, but we had good prices back then.
Now we are looking at that we have got to be the Number 1
soybean exporter. We have got to be the dependable source,
because, frankly, if we keep these sanctions in place, we
cannot be the dependable source for soybeans or corn or
anything else.
We have got to address the problems inside our own
boarders. As for the biotechnology, I think we all support
biotechnology to a certain extent. That is going to be the way
we compete in the world in the future, but we have got to be
able to get by political aspects of biotechnology and look at
the positive aspects, especially out there in the countryside
where we are using less pesticides and we are doing more out
there using some biotech crops than we ever did before.
It has increased our production, but our soybean-use
rations is tremendous. As we grow those beans, we are using
them.
We can use a lot more if we use renewable standards. It is
very important.
Ethanol, I think everybody out here is a big supporter of
ethanol. We also have to be a big supporter of biodiesel.
Senator Harkin. On the biodiesel, you know this. I might
tell the audience. About a week ago I was in Cedar Rapids and
poured the first gallon of soy diesel into buses.
They have 32 buses in Cedar Rapids now running on soy
diesel. It is an 80/20 blend, 20 percent soy, 80 percent
regular diesel.
The soy diesel is made around Sioux City someplace. If one
percent of the diesel market in America were to use this soy
diesel, in this 80/20 blend, I think it would take about 300
million gallons. Estimates are that it might boost the price of
soybeans as much as 15 cents a bushel. Plus it cuts down on
hydrocarbons, it cuts down on pollution, and it cuts down on
CO2 emissions. There would be a 70 percent reduction in CO2
emissions if you use soy diesel.
I am sorry, Mr. Lehman.
Mr. Lehman. Well, in the area of trade too, we feel
strongly we need to aggressively pursue trade opportunities. We
need to keep in mind that those trade opportunities need to be
fair for our producers.
I use Monsanto products just like those farmers do in
Brazil. They do not pay a tech fee.
Senator Harkin. They do not pay what?
Mr. Lehman. A technology fee that is attached to products
we use, and when we ask why that is, it is because they do not
have the same environmental standards for--that we have to have
here. That is a cost of production that we face that their
farmers do not face.
We talked about China now becoming a competitor in--and
becoming an exporter of corn. The labor standards for producing
corn in China are nearly nonexistent, and if we really want to
compare bushels produced in China and bushels produced in the
United States, then at the same time we are producing--we are
comparing how farmers are being treated in this country to how
farmers are earning income in China as well. Those labor
standards need to be taken into account too. We need to pursue
those trade opportunities.
Senator Harkin. Well, I agree with that. While I have been
a supporter in the past of what they call fast-track
legislation, the President's ability to move trade legislation
rapidly through the Congress, I stopped.
I stopped being a supporter when the trade agreements carve
out any kind of environmental or labor standards. Because it
seems to me that that has got to be a part of our trade laws
too. I am just telling you what I feel, but they have got to be
a part of our trade laws.
Otherwise, we let people undercut by using basically slave
labor. We allow people to just do environmental pollution,
which affects the whole globe and undercut us.
I have always said that if we can protect CDs, compact
disks, I did not mean certificates of deposits. I mean compact
disks. If we can protect the compact disks and take action
against any county that would allow the piracy of compact
disks, we ought to be able to take action against counties that
do not meet certain environmental standards and labor
standards.
I would hope, and I make this statement forthrightly, I
encourage all of the agricultural groups you represent and
others that may not be here, that this is one place where I
hope the agricultural--agribusiness section, including farmers,
will break from the corporate business sector of America,
because the corporate business of America is saying they do not
want trade--they do not want environmental standards or labor
standards in our trade agreements.
I mean it is especially important, vital to our farmers,
that we have those kind of practices. I encourage those of us
involved in agriculture to take a separate stance, and that is
just my own feeling.
Any other thoughts on this, Sam?
Mr. Carney. I do have a few, and as John mentioned, we have
two-thirds of our--we have sanctions on two-thirds of the
countries, and I guess what kind of upsets me is on our
industrial tariffs we average four percent. On the agricultural
tariffs, we average around 40 percent. This is a major problem.
I am sure people out here have to borrow money, and if
anybody had to borrow at 40 percent interest, you just as well
walk out the door. You are done.
We have got to get this changed. This is a major, major,
major issue with agriculture.
Senator Harkin. Say that again. Tariffs----
Mr. Carney. OK. Industrial tariffs average about 4 percent.
Do not quote me, but that is the average.
Senator Harkin [continuing.] Industrial on industry coming
into this country?
Mr. Carney. Going out to other countries too.
Senator Harkin. Tariffs we face on our exports?
Mr. Carney. Yes. Maybe I did not explain it right, but as
our exports on agriculture, we average 40 percent going out.
Senator Harkin. That other countries put on our
agriculture?
Mr. Carney. Right. The main reason is we put so many
sanctions on. This is the thing that we have got to change. To
me, we should never have sanctions on a country unless we are
outright at war with them. If you want to put sanctions on a
country, I do not think it really helps.
Senator Harkin. What you are saying, there are countries we
have absolute total prohibitions on, but other countries you
are saying we have one form or another?
Mr. Carney. Correct. You know, we have got certain things,
but what I am saying is: We should not use food or medicine.
I just do not think that is right, and I do not think that
really helps us help with other countries. This is something we
should eliminate.
Senator Harkin. I agree with you, totally agree with you. A
funny little story: I remember once, one of my political heros
was Hubert Humphrey from Minnesota. He is now deceased. He was
on the Senate Ag Committee long before I got there, and he was
talking about selling food to Russia and--during the height of
the cold war, and someone said something to Humphrey about
selling--selling this food to Russia, and he said, ``Well, I
believe we should sell them anything they cannot throw back at
us.''
[Laughter.]
Senator Harkin. I thought that sounded like a pretty good
philosophy to me.
[Laughter.]
I appreciate that. I am going to open it to the audience
now. You have heard a fairly good discussion here.
I just want to make one other point here, that the
conservation incentive. I appreciate a lot of you looking at
the Conservation Security Act. Any further thoughts,
refinements, suggestions that you have on that, please let us
know. If we do a conservation incentive, it does shift the
practices and less to the commodities, which I have heard a
little bit of here today.
I have got my little chart here. I am sure you can all see
this real well. It shows the CCC outlays for the fiscal year
2000. We had $32.2 billion in outlays, but we only had 1.7
billion in conservation, so that gives you some idea of the
small amount of money that we put out in conservation.
I have always said, that we have got a lot of farmers out
there practicing good conservation. I do not mean just CRP or
set-aside, but I am talking about practicing good conservation.
This takes time. It takes equipment. A lot of times it takes
out-of-pocket money, but they get nothing for it. The
Conservation Security Act is to convey to farmers, ``OK. Now,
we are going to support you in your practices, and if you want
to do more voluntarily, we will pay you.''
Mr. Williams. Senator Harkin, there is also a direct long-
term societal cost to America in how we take care of our land.
Senator Harkin. Yes, and I think that is going to be a good
selling point to some of those who are now saying that we
should not be putting that much money out in agriculture, that
we are already hearing that kind of reaction coming back.
OK. I am going to throw it open, and again, I ask you to
please state your name so our reporter can get your name
correct.
STATEMENT OF DENISE O'BRIEN, ATLANTIC, IOWA
Ms. O'Brien. Good morning, Senator Harkin. I am Denise
O'Brien from Atlantic, Iowa. I can say that 25 years I have
proudly been an organic farmer, and about 20 of those years I
have given ag testimony within Iowa and Washington D.C.
Senator Harkin. I am very appreciative of you. You have
been there many times, and I appreciate it.
Ms. O'Brien. I keep nagging, but someday something will
change, and believe me, I have not got cynical yet. You know, I
can still smile.
First of all, I would like to make a comment about the lack
of gender balance on the program. It is good that Shirley is
there, but women do have a voice in agriculture, and to leave
out that voice, we leave out----
Senator Harkin. You take that up with the Pork Producers,
the Soybean Association, and the Farmers Union. I just asked
them to please have someone come testify.
Ms. O'Brien [continuing.] I will take that up. It is really
good if the organizations would have women represent them on
these, because women do add a voice to solutions, so I would
encourage all organizations to do that.
Senator Harkin. Point well made.
Ms. O'Brien. I am representing actually an organization
called Women's Food in Agriculture, because we do not have a
voice in a lot of organizations, so we have created an
organization.
Today I am speaking on behalf of organic agriculture, which
has not been mentioned at all, and I think there is
approximately now in Iowa 170,000 acres of certified organic
crops.
There is an alternative solution to some of this. It is not
everybody's solution. I agree, but these farmers are
profitable. They are making it. They are turning a profit, but
I also want to say at the time that they are turning a profit,
they are in grave danger of losing their economic--or organic
status because of the problem with GMOs. We have not talked
about GMOs this morning either, genetically modified organisms.
When the organic crops get contaminated by genetically
modified organisms, they lose their--the farmer who has the
organic crops loses their market, and that market has been a
market that has been increased, profitability for them.
The National Organic Standards Board have made the
standards now, and there is zero tolerance of GMO
contamination, so I think that we have to consider what we are
doing in this process of eliminating--or of contaminating these
organic crops.
Recently the Organic Farming Research Foundation released a
state of the states report, and it is Organic Farming Systems
Research at Land-Grant Institutions, so this report has come
out about the state of organic research in the United States.
I would like to say that because public funds support the
land-grant system, we expect it to be responsive to the
educational and research needs of the constituents, including
organic farmers, and we have been totally left out.
I know this from 25 years of experience. We have always--My
husband and I have always been left out of any--all of these
payments. We have been good stewards of the land. We have had a
crop rotation when the set-aside was based on corn base. We
never qualified for anything, not that we wanted government
payments, but we never qualified for anything because it was
really--we were--it was a disincentive for us to do what we
did, but we believed in what we were doing.
Senator Harkin. Are you suggesting that--and I am just
asking, that there should be special provisions made in the
next Farm bill that would help encourage organic farmers to
give some better support somehow?
Ms. O'Brien. You betcha.
Senator Harkin. Do you have some ideas on how we do that,
Denise?
Ms. O'Brien. we have it right in this book here. I have
given this book to Ellen, so she has got that.
Senator Harkin. All right.
Ms. O'Brien. There is no support of organic research. We do
have--Iowa State has the only organic specialist in the
country, Kathleen Delate, and she has--Mike is raising his
hand.
Mr. Duffy. I was just going to say that connected with the
Armstrong Farm, we also have a long-term research project that
is solely devoted to organic production. I thought I saw Bernie
here, the farm manager who is running it, so----
Ms. O'Brien. Yes.
Senator Harkin. Somewhere here?
Mr. Duffy [continuing.] Right back----
Mr. Backhaus. The Neely Kenyon farm.
Mr. Duffy [continuing.] The Neely Kenyon farm, which is
connected with----
Senator Harkin. Where is it?
Ms. O'Brien. Adair County.
Mr. Duffy [continuing.] It is connected with this----
Mr. Backhaus. It is part of our farm. My name is Rob
Backhaus. I am president of the Wallace Foundation.
Ms. O'Brien. To go on with the question you asked me: There
is 17 acres under research in Iowa, and many states have zero
research going on into organics, and so with Iowa State having
an organic specialist, she is totally overworked and totally
unaccessible. I try to get ahold of her, and she is just
understaffed.
I know we have to take this up with Iowa State, and
Practical Farmers of Iowa is doing that very thing.
Senator Harkin. Now, again, in your practices, I will bet
you do not get any kind of payments at all for your practices.
Ms. O'Brien. Oh, no. We never ever have.
Senator Harkin. Alison just reminded me under the
Conservation Security Act you would.
Ms. O'Brien. Well, now we changed our farming situation
over the years and Larry is working off the farm now, and I do
ten acres, so we have got--but that is an encouragement to get
back in actually. It would be an encouragement.
To continue with my testimony, I just want to say that the
good news is that land grants in 39 states have research and/or
resource development for organic producers. Land-grant
institutions in 19 states reported research acreage net gained
in organically, 12 of which have research land that is
certified or in transition to certification.
The bad news is, is that of the 885,000 available research
acres in the land-grant system, only .02, or 150 acres, out of
880,000 acres is devoted to certified organic research. That is
a totally unbalanced situation.
When we are looking for solutions, I think we ought to
think about organic agriculture, and I am really proud to stand
here all these years. I know people have thought I am kind of
whacked out sometimes about my organics, but I am standing
here.
The private sector ag has taken on themselves to do the
research, and the Organic Farming Research Foundation in
California has funded programs in Iowa.
I want to point out that the Heartland Organic Cooperative,
grain cooperative that is located in Adair County, is now
buying the Stuart elevator, and there is going to be access for
semi loads of organic produce--or commodities, this is a
commodity one, this is corn and soybeans. They are just taking
over the Stuart elevator, so I think it is really relevant
that--and they have operated 8 years in the black.
Compared to other--Mark is telling me that I have to quit.
Everyone who knows me knows that I talk too much, but I would
just say that organic ag is a growing industry. It is an
agriculture that can be a vehicle to help the floundering
small- and medium-size farms survive and a vehicle to save our
most valuable resource, the land.
I would also like to say that a week from today at this
very place at ten o'clock is a biomass--the Union of Concerned
Scientists is--and Alan Teel, our extension agent in this
county, is having a biomass meeting, and it is like from ten
o'clock to noon next Saturday morning, so I would like to
encourage the farmers to come here and learn about some biomass
production.
[The prepared statement of Ms. O'Brien can be found in the
appendix on page 87.]
Senator Harkin. Denise, thank you very much.
I forgot to mention that we have a new member of our
agriculture committee. Senator Ben Nelson from Nebraska is now
a member of our agriculture committee. He could not be here,
but his staff member, Sonny Foster is here. Where is Sonny?
Thank you for being here, Sonny. If any of you want to get
anything to Ben, Senator Nelson, please just give it to Sonny.
I just want to followup before you start, sir, on what
Denise O'Brien was saying. Maybe what Mr. Duffy was saying,
that we have 92 percent in a couple of crops, and, sure, we
have moved in that direction. I know that organic cannot be
forever. It is not going to replace it all, but maybe there is
a lot of other little things like that we can do around the
state to help buttress and help provide some really good
support and income support and--for rural communities. Organics
is one of them.
I know around the Washington D.C. area they have got a
grocery chain called Fresh Fields. They cannot build them fast
enough. People drive for miles to go to them, and they do all
this organic food, organic lettuce, organic meats, and all
that.
Someone told me that they were selling pork, Sam, to this
Fresh Fields, organic pork or something, and where was it I
read this? Fresh Fields was buying all the organic pork that is
being raised today, and they cannot get enough.
There are some niche markets out there for operators. There
are some niche markets out there. Perhaps we ought to take a
look at that in the next Farm bill to see what we can do.
I might just mention one other area, and that is energy
production. Somebody mentioned biomass. We have a project going
on down in Southwest Iowa. Any of you know about the switch
grass project that we have? How many of you know about it? The
information got out decently anyway.
We have about 4,000 acres of switch grass going down there
now, and we are burning it in the coal-fired power plant in
Ottumwa. We just finished the first run this winter, and all of
the results look very good and there is more B.T.U. in a pound
of switch grass than a pound of coal.
If we can utilize CRP acres for switch grass and use switch
grass to provide energy, not going to replace all the coal, but
I think I have seen figures that with just a modest use of our
CRP ground in Southern Iowa, we might replace about seven
percent of the coal coming into Iowa.
That translates into several hundred million dollars every
year that would stay in the state rather than going outside the
state, so I think we have got to start thinking about these
kinds of things, aside from wind energy and stuff like that,
but I think there is a great potential for biomass.
Mr. Duffy. May I interrupt? I am involved with that project
down there. I have conducted and done the estimated cost of
production of switch grass.
Senator Harkin. Yes.
Mr. Duffy. That publication, it is in the press right now,
but one of the issues and the reason I wanted to bring it up is
because right now our costs of production are a little bit
higher than the coal that Alliant Energy, they can purchase the
coal cheaper, and I guess the reason that I am bringing this up
is because this is an area where maybe if we could look at an
energy crop subsidy or something like that or definitely more
research into trying to get the yields up. Because what we have
found is obviously the higher the yields and then the lower the
cost would be.
Senator Harkin. Sure.
Mr. Duffy. This does need more work, but I think it shows a
lot of promise. That was what I was going to allude to. I am
sorry to interrupt.
Senator Harkin. Just a research project then?
Mr. Duffy. That is correct.
STATEMENT OF GAYL HOPKINS
Ms. Hopkins. My name is Gayl Hopkins. I am active in the
Iowa Corn Growers and Environmental Issue Team, and before I--I
would like to focus my comments concerning the Conservation
Security Act, but before I do that, I would like to make just
one response to what was said earlier.
Their comment was about Dr. Duffy's provocative comments.
My personal feeling is that maybe you have understated the
importance of management and size, that the management skills I
believe are an extremely important issue in size of operations.
First of all, I would like to--just getting back to the
Conservation Security Act, I would like to, first of all, say
that I believe it is the hot issue in agriculture right now,
and I would like to talk a little about why I think that is the
case, and, second of all, I would like to talk about why we as
farmers should support it.
Mr. Askew here, his organization has come out in support.
The American Soybean Association as well as the Iowa Soybean
Association has supported it. The National Corn Growers have
endorsed the concept of it.
We had a delegation there this past week. The Iowa Farm
Bureau had a delegation there this last week. The Farm Ag
States Group, which is a group of ag commodity groups in Iowa,
have been discussing this issue. Carol Balvanz from cattle has
made some inquiries trying to understand what pasture rotation
would mean, as far as payments for pasture rotation would mean,
what about manure management and livestock. There has been some
inquiries.
I understand that the EPA has asked for conversations
looking at what this would mean environmentally, so I really
think this is an issue that is Senator Harkin's bill, our
Senator's bill, and I think we ought to look at it hard, and I
personally feel supportive.
The reasons why I think we should support it is I was in my
FSA office yesterday, and I think the LDP on beans was $1.17.
There are--I do not want to change the payment--the way the
farm program is working, but there are limits to trade-altering
payments that a farmer getting $4 for his beans but getting an
additional 1.17 from the Federal Government, what that does to
trade. We can do some of that. That is built in to our trade
agreements, but there are limits to what we can do.
In the area of conservation, there are not limits. They
talked about a green box earlier. We need to be looking at
other alternatives to assist farmers besides these direct
payments that we have been doing, or maybe I should say, in
addition to them, because I do believe there is some limits,
which I think is going to give us some trouble down the road.
In our environmental issue team, we have been dealing with
impaired waters, TMDL, which is Total Maximum Daily Load, of
either phosphorus or nitrogen in streams and who does what and
who should do what and things like this, and we have had--the
EPA has come--bypassed DNR in Iowa and declared hundreds of
water bodies in Iowa as impaired waters.
We are facing--to have to deal with this. Now, as an
organization, we can say things like, what about the cities?
What about the 65,000, excuse me, contractors who in the
evening clean gas stations, lots, parking lots, things like
this? That all goes into the storm sewers.
If we focus upon what is wrong with everybody else and not
with what we can do to improve our own situation, we will be
looked at like the tobacco industry as being in denial, and I
think what we need is some way to assist farmers to make
cleaner water and cleaner air, but when they passed the Clean
Water Act of 1972, there were billions and billions and
billions of dollars spent every year for these municipalities.
We have challenges but no money.
Senator Harkin. Gayl, I have got to move on. We have got
some other people here waiting.
Ms. Hopkins. OK. My last two points are: conservation needs
broader support--excuse me, agriculture needs broader support
if farmers are to receive payments. The public says, ``What is
our money being used for?''
The last thing I would like to say is that conservation, or
being good stewards of the land, is the right thing to do.
Senator Harkin. Thank you.
STATEMENT OF HAROLD SWANSON
Mr. Swanson. Thank you for the invitation, Senator Harkin.
It is nice to see you again.
Senator Harkin. Yes. For her.
Mr. Swanson. Harold Swanson. I am retired head of the Iowa
Western Community College ag department and have a farm and 14
years in ag business, fertilizer, ag chemical, and grain, and
we have--so I am a member of Ag Connect Board of Directors,
which is trying to connect farmers retiring with the current
operators, retirees, and I also am on the--a member of the
National Farm and Ranch Business Management Education
Association.
Senator Harkin. All right.
Mr. Swanson. Which was started in 1952, and I was one of
the original ones that started it as part of the Minnesota Vo
Ag Farm Management Program in Minnesota in 1952.
The grain company offered the Minnesota Department of Ag
Education a nice grant to start a farm management program, and
out of 500 ag teachers who were offered these things, 15 of us
took the challenge. I have been with it, and I have a
tremendous collection of records, so--but that is just the
background.
Senator Harkin. Right.
Mr. Swanson. Now, I am going to pick a little niche with my
discussion today, and I will give you a copy of it. I will just
read it so we can get it over with real fast.
Maybe Congress can change the LDP system a little this year
to a program that will really benefit the small farmer, instead
of set-asides that cannot be initiated because of the time
factor and the provisions of the 1996 farm law. The regulations
for the operation of the LDP program have not been absolutely
set.
Now, I am--Based on what I have read in the regulations, I
do not think the final--because I see there is some changes in
the way they have set up the LDP, so I am thinking that for
2001 some things can happen.
This is what I am suggesting: Let us set up an LDP so the
payments will be made available to bushels produced or not
produced based on a formula that calculates the portion of the
crop that a farmer would be entitled to if he was producing
what was his share of the estimates usage based on the
percentage of the expected crop that is calculated in July when
the total certified acres are known and the government has made
the estimate for the average yield and the estimated usage
figure for 2001-2002 period and the expected carryout as of
September 1, 2002. This system would be an additional help for
the farmers suffering from drought and other disasters.
Here is how it would work: The bushels that a farmer would
be able to LDP would be based on the percentage of acres needed
to produce the usage figure at average national yield developed
for the crop in relationship to total acres planted.
If the acres needed would be 85 percent of the planted
acres, then each farmers' share would be 85 percent of his
planted certified acres times the national average yield as his
LDP bushels, whether he produced them or not.
This method provides some badly needed incentives to let
the high-yield producers recognize that they are part of the
overproduction problem, and since there is no willingness to
set up alternative programs for producers on marginal land who
have little chance for profit, even with the very favorable
prices, but contribute heavy to the oversupply, this program
would help the small farmer.
Senator Harkin. Thank you. I have a vague idea. What you
are saying is you take what the total national usage would be,
you figure the amount of crop acres that would be needed
basically on an average basis to produce that, then you get a
percentage of what every farmer based upon, I assume, some kind
of crop history or something like that, that they would be
eligible for as their percentage of that total.
The only question I have on that: Does that not still
provide the bigger farmers with the bigger payments, and do we
not still get back to the same kind of rut that we are in now?
Mr. Swanson. No. Because, first of all, you are going to be
dealing with the average national, so this guy that has got big
acres, big high yields, is only going to get the--his LDP on
national--on national yield.
Senator Harkin. OK.
Mr. Swanson. The guy who is producing 100 bushel on some of
the marginal land, he would get the national average times his
acres.
It would be a very definite payment to the marginal
producers, which we need some help.
[The prepared statement of Mr. Swanson can be found in the
appendix on page 91.]
Senator Harkin. Give me that information. I will take a
look at it. I do not know that I understand all of it.
I am told by Mark we only have about 30 more minutes, and
so I am going to try to move as rapidly as I can.
STATEMENT OF JOYCE SCHULTE, SOUTHWEST COMMUNITY COLLEGE
Ms. Schulte. Greetings, Senator Harkin, Joyce Schulte.
Senator Harkin. Good to see you again.
Ms. Schulte. Thank you. I am representing community
colleges, students, work for a TRIO program at Southwestern
Community College.
Part of that criteria group are low-income students, many
of them needing food stamps. Various things stand in their way.
Now, I love to feed the world, but I would like to feed the
world starting at home in our colleges.
I do not know if there is some way to connect the students'
academic success via a TRIO program and food stamps or not.
I am going to be real brief and stop at that in contrast to
my normal style. Thank you, sir.
[The prepared statement of Ms. Schulte can be found in the
appendix on page 92.]
Senator Harkin. Thank you very much. Food stamps TRIO
program. Got it.
STATEMENT OF ALAN ZELLMER, FARMER/PRODUCER
Mr. Zellmer. Senator Harkin, my name is Alan Zellmer. I am
Alan Zellmer.
Senator Harkin. Spell that last name for us.
Mr. Zellmer. Z-e-l-l-m-e-r.
Senator Harkin. OK.
Mr. Zellmer. I am a local farmer/producer. I guess the
first thing we raise is kids at our place, and then it trickles
on down to corn, soybeans, cattle.
I am going to come at you from the issue of: I have got
involved with a group that produces cattle for a specialty
product. It is Wagyu cattle.
Senator Harkin. Yes.
Mr. Zellmer. I can agree with the 40 percent tariff.
Senator Harkin. I am familiar with that.
Mr. Zellmer. We ran into that 40 percent tariff, and now
the cattle that we do raise are sold domestically here to fine
restaurants and markets.
Senator Harkin. You have an operation up around Perry?
There is somebody up there producing Wagyu.
Mr. Zellmer. That could be.
Senator Harkin. I just know, and they are doing a good job
of marketing.
Mr. Zellmer. You bet. I am from Atlantic, is where I am
from.
Senator Harkin. Where do you market yours?
Mr. Zellmer. Ours actually ends up in the finer restaurants
now here in the United States. There is enough Oriental people
that travel here and live here that they are looking for the
product.
Senator Harkin. Interesting.
Mr. Zellmer. The product in Japan sells for around $64 an
ounce, and when they come over here, we can kind of sell it to
them at a bargain rate.
I have worked with an investor that ventured into this, and
there is a potential to bring a premium to just area cattle
producers. They do not have to change anything in their
operation other than the semen that they are actually using
with these cattle, and where the potential top is on this, we
do not know. We are going to let the market dictate more so
than we do in the corn and soybean part of our operation.
Now we started a feedlot to work into this project, and now
actually when we started in the project, we had an engineer
come out and tell me, what do I really need to do as far as
manure management and things like this.
There was some pretty basic and simple things that we had
to manage. Now I had my DNR visit, and it is my understanding
that the EPA was sued and, in turn, put pressure on the DNR to
bring this Clean Water Act up to date.
Senator Harkin. Right.
Mr. Zellmer. I agree that there are places that we need to
change and fix things, but we also need a lot of time and a lot
of definition as to actually what we have to fix.
Senator Harkin. Yes.
Mr. Zellmer. Because just being one producer, I cannot
really get a straight answer from anybody.
Senator Harkin. How many head of production do you have,
how many cattle?
Mr. Zellmer. I work 1,600 right now.
Senator Harkin. You are over the 1,000 cap?
Mr. Zellmer. Right. I hate to get into all those
abbreviations, because I have not been involved with them
enough to know them.
Senator Harkin. Not all of that is Wagyu?
Mr. Zellmer. Yes.
Senator Harkin. You have got 1,600 of Wagyu. Is that right?
You have got a market for all of that?
Mr. Zellmer. Yes. The thing that--I am all for Southwest
Iowa every way, shape, or form. It does not have to be just my
operation, because there is other area producers that are
saying, ``I will just shut down versus comply.''
Senator Harkin. Yes.
Mr. Zellmer. We are looking at $100 to $150 a head per pen
space to get up into compliance and then we have operational
costs besides, and everything that goes in the front of those
cattle comes off the land, and everything that goes out the
back----
Senator Harkin. This is one area where we cannot forget
about our livestock people in Iowa, this is both pork and
cattle, for our value-added products.
We have to recognize that we have to now meet some of these
environmental standards. We have to recognize that.
Mr. Zellmer. Sure.
Senator Harkin. You cannot just dump it all on the
individual producers. Just like I am talking about my
Conservation Security Act, I think what we have got to do is
figure out some way--now, I am looking for suggestions on
this--on how we help people like you to meet these things
without, you say $150 a head. I mean you cannot do that.
We have got to figure out some way of coming in with some
supportive mechanism both on the national and the state level--
--
Mr. Zellmer. Yes.
Senator Harkin [continuing.] Here in Iowa to keep you in
business and keep our cattle producers in business and yet meet
these more stringent environmental standards we have to meet.
Mr. Zellmer. I would love to be involved with it.
Senator Harkin. I am looking for suggestions, so if you
have got any thoughts and stuff on that, I am open for anything
that we can start building in, as I said, both national, but
something has got to be done at the state level too. There has
got to be two ways on that.
Mr. Zellmer. I will stay in touch with you on what I can
find.
Senator Harkin. Any suggestions you have got on that,
because I recognize we have got to do this. We have got to help
producers meet these standards.
Mr. Zellmer. Sure. OK. Thank you.
Senator Harkin. Thank you.
Mr. Askew. We need to be on the front line of this as for
working out systems to document what we are doing out there.
What we are trying to do is associate--and as we talked to you
a little bit about the CEMSA program, but we are looking at
environmental management systems for all of agriculture, so for
the pork producer, for the cattle producer, also to have a
framework out there to show--to be able to assess your own--
what you are doing on your farms, to look at what practices you
can do, and then use these before regulations come out.
Because with production agriculture, they will be coming,
so we have to be on the front line of this, and we will work
with you on that to help develop those processes.
Senator Harkin. That is good. You are right. It is coming,
so we better get on the front end of it. Actually, we should
have gotten on the front end of the livestock situation some 20
years ago. We did not do that then either. Yes, go ahead.
STATEMENT OF ERWIN AUST, SHENANDOAH, IOWA
Mr. Aust. Thank you, Senator Harkin. Glad to have this
opportunity. I am Erwin Aust that lives in Shenandoah, Iowa. I
am an assistant commissioner with the Page Soil and Water
Conservation district along with Dave Williams up there, and
also I am a board member of the Iowa Watershed.
Our organization supports the planning and treatment of
conservation needs of soil and water resource development--
watershed bases, and--because of conservation needs cannot be
often solved on the individual farm.
We certainly support or appreciate the support you have
given to the conservation efforts, Senator Harkin. I would like
to address primarily the Iowa Watershed Organization's supports
project like the PL566, Little Sioux Water Quality Project,
Hungry Canyons, and those type of programs.
Today I would like to primarily address the 566 program. It
is operated in about 36 counties in Iowa, and currently there
are projects authorized in about 22 counties.
Funding nationally was cut in half in 1993, and that was
primarily to shift the money in the direction--the emergency
Midwest flood that we had in 1993 with the intent we were told
to restore 1994, 1995, and which has never happened.
The program in Iowa had operated by a four, five million
dollar level. Recently they have gotten about a million dollars
a year.
This year only $360,000 was allocated to Iowa. Back in the
Page district, we do have the Mill Creek watershed. It was
receiving some pretty good funding, and there is a lot of
interest in the county, and it was helping with the land
treatment work and so on and helped quite a bit in terms of
trying to relieve some of the backlog of individual farmers
that wanted to apply practices. Mr. Williams well-documented in
his remarks kind of the backlog of interest that exists among
individuals.
This program, like the Mill Creek has not received any
funding or very little in the last several years, since the
1993 cutback.
To wrap it up, there is over--like over 50 projects in Iowa
that have made a large impact on rural development, meaning
flood control, erosion control, water supply, recreation,
wildlife improvement needs, and that sort of thing.
I will wrap it up there to save some time, and mainly our
comments address supporting the existing programs and--as well
as addressing the new aspects, and that is one area of existing
program that is successful, like to support.
Senator Harkin. I appreciate it. We have got, I forget, how
many small watersheds that we have got now that over the years
have basically filled up, and they need to be cleaned out and
refurbished. Several thousand in the state of Iowa, if I am not
mistaken.
Mr. Aust. In the neighborhood of 1,500 structures in Iowa,
and there is probably hundreds of those that are approaching a
50-year life, and some legislation was passed a year ago to
allow funding to help local communities restore those, and that
is part of that package also.
Senator Harkin. Yes. 1,187 in Iowa, and there is 2,200 that
need immediate rehabilitation. 284 in Iowa that need immediate
rehabilitation. Thank you.
Mr. Aust. Thank you.
[The prepared statement of Mr. Aust can be found in the
appendix on page 93.]
STATEMENT OF DAN JORGENSEN, FARMER, AUDUBON, IOWA
Mr. Jorgensen. Senator Harkin, glad to have this
opportunity, and please bear with me. I have never done
anything like this before. I am Dan Jorgensen. I am a farmer
from Audubon County. I would like to address two issues, one is
our energy issue, and as you see from my shirt, I am a Tall
Corn Ethanol, building a plant at Coon Rapids, Iowa, and--as a
value-added project for agriculture.
This is a very important project, so I think whatever help
you can give us in value-added projects as far as in the fuels,
I think that is very important as far as less dependence on
foreign oil, and then we develop a better market for our own
commodities. It is a real plus, and I have been involved in
this, and we hope we can make an impact on our area
economically.
The other area I would like to address, maybe I would like
to put this in quotes. Maybe I am one of those ``evil, large
farmers.'' We farm 4,000 acres. There are two husband-and-wife
teams directly involved in management and ownership of this
farm.
Senator Harkin. Yes.
Mr. Jorgensen. We impact six families. We rent from I think
eight retired farmers. We rent from two investor farmers, and
then we own a little bit of land ourselves, so I think as we
talk about changing this, it does have a lot of economic impact
on Iowa and on different farms. You know, we cannot just go in
and cut everything down and say we are only going to help out
that 300 acres. Maybe that is not a--Maybe that is a pipe dream
of the past to some extent.
Our economics have gone beyond that. I do not think--You
cannot afford a $150,000 combine on 300 acres. It is--It just
does not work out, and so the economics have driven this. As
Dr. Duffy said, we cannot just go in and wipe everything out.
We have to be very careful, and hope we can make these changes,
and hopefully we can make some improvements on this.
The idea of the minimum wage, just that struck me as, I
would not want to pay the people that work for me minimum wage,
and so often minimum wage gets tied to substandard living, and
I do not think that is what we are looking for in agriculture.
We need to--Just like when we are developing jobs, we do
not want those as poor jobs. We want them as good jobs. I am
not saying Dr. Duffy's idea does not have some merit to look
at, but that to me is a little bit of a scary possibility. As
we look at minimum-wage jobs in our society, they cannot
support a family, and we are about----
Senator Harkin. That is true.
Mr. Jorgensen [continuing.] I enjoyed the fellow's comments
about raising kids. I just had my granddaughter here this last
week, and I still have her tape in the car, and we need to have
good economic stability too. We cannot just cut everything off,
and it would be a train wreck, and we went through that in the
1980's.
Senator Harkin. OK.
Mr. Jorgensen. Thanks for your time.
Senator Harkin. Two things I would just say on that, Dan:
First of all, one on ethanol. One of the things we are looking
at is changing some of the tax structures. The cooperative
building of ethanol plants is kind of what we are looking at,
what we are seeing happening out there, but you do not get the
kind of tax advantages that, say, a private entity would get,
so we are trying to figure out how to change the tax structure
to give the same tax benefits to cooperative owners as to, say,
the bigger, privately held ones, and so I think there may be
some changes in that regard.
Mr. Jorgensen. That is very important, because there are
442 member--investor members, and the bulk of those are
producer members in this cooperative, and so that is important
to get that--some of that help, and also if--put in a plug
maybe for the--I do not know the number of the bill or whatever
it is, but on the Commodity Credit Corporation's reimbursement
to--like the increase grind or increased usage of corn and feed
grains.
Senator Harkin. Yea.
Mr. Jorgensen. We hope that may be expanded or extended,
the time period on this, because that would be a real help in
developing value-added projects in your grains.
Senator Harkin. Exactly. I just want to make sure, I have
never said this, that larger farmers are evil.
Mr. Jorgensen. No. I use that--Like I said, I put that in
quotes.
Senator Harkin. The only questions we are asking basically
and from the farm policy standpoint is: Do the programs, the
Federal programs that we have now, does it tilt the playing
field, and if it does, do we want to do that or do we want to
do something else? I am just sort of asking those questions.
Mr. Jorgensen. Yes, I would have never dreamed 15 years ago
that we would farm that number of acres. It does tilt that
playing field, to be honest about it.
Senator Harkin. Yes.
Mr. Jorgensen. I have never went out and asked anybody to
rent their farm. To some extent some of those people--We did
rent one other farm this year, and that guy came and said, I do
not think--I am going to rent it out now so I can start selling
some of my equipment because I cannot replace it with new
stuff.
Because the economics he was farming 300 acres, and the
economics were not that we could pay--He is 62, and he was
going to work for us part-time, to help us out part-time, which
we were grateful for, so there is a lot of things involved.
I just never would have dreamed that our farm would have
got to be that many acres either.
Senator Harkin. Thank you very much.
Mr. Jorgensen. Thank you very much.
Senator Harkin. I appreciate it.
STATEMENT OF FOX RIDGE FARMS, CARSON, IOWA
Fox Ridge Farms. Fox Ridge Farms, Carson, Iowa. I am one of
those 13 percent, or we are, that--of the top dollar amount on
it. I can remember farming, and I was in it when it was all
organic. I have been around that long.
As I listened here to all the discussion, it is all
economics. Our operation, which is cattle and hogs, corn and
soybeans, and alfalfa on it, we do it with two boys and myself
on it.
I would like to say that our income is not the 55 percent
that we get from the government. There is evidently somebody
getting a lot of money that we are not getting from the
government, but I want to reiterate, we have had a livestock
operation that has been very profitable, up until a few years
ago. We dropped the hog operation, approximately 4,000 head at
one time, because of the environmental people and things like
this and cost, what we have to do to keep the operation going.
Two weeks ago we sold our last cattle. Well, we got one
head left, last cattle, on it, and we--in farming it seems like
we have to deal with many government agencies on it, and we are
getting to the point that we do not feel like we want to fight
it anymore. We have to spend so much money to keep this
operation going.
We have personally put out--and we have terraced all of our
ground and put out approximately $120,000 of our own money on
it to do this in order to farm.
Now in order to raise cattle, we are going to have to spend
a lot more money, and at my age and my boys' age, I do not feel
that we want to do this. This is--all these government agencies
is going to close down many of the livestock organizations in
this state, and it already has in the hog operation, and it is
going to do it in the cattle operation on it.
I would like to see, and I think the answer to your
problems in agriculture is the overseas market. We do not have
it.
Like when Russia invaded Afghanistan and Carter shut down
shipping agriculture products over, that cost me a lot of money
when he done that, because I had a lot of beans on hand which
was going to be shipped on it. You know, I would like to see
what they can do to get our products overseas, and I do not
know how you are going to do it, because their cost of
operation is much cheaper than ours, and I think we are pretty
efficient too on it. Thank you.
Senator Harkin. Thank you very much. Appreciate that. Yes,
sir?
STATEMENT OF ROD BENTLEY, PRESIDENT OF POTTAWATTAMIE COUNTY
CATTLEMEN'S ASSOCIATION
Mr. Bentley. Hello. My name is Rod Bentley. I currently
serve as president of the Pottawattamie County Cattlemen's
Association, and on the pollution thing, we are very concerned
about clean water. We want our kids and grandkids to have clean
water.
Senator Harkin. Sure.
Mr. Bentley. The zero run-off 100 percent containment thing
for most of us is going to make it very financially difficult
to stay in business, as some of the other guys have said.
We think filtration, sediment control and filtration, would
be a viable project. We need more engineers to help design
things.
Senator Harkin. Yes.
Mr. Bentley. That is----
Senator Harkin. You are saying that the zero tolerance is
going to be detrimental for you?
Mr. Bentley [continuing.] It will put probably 90 percent
of the cattle feeders out of business.
Senator Harkin. Again, what I am looking for is--I am not
certain I can overcome that, but what I am looking for is: How
do we provide the necessary support?
Because obviously it is a societal benefit. If we are going
to start the project, everybody benefits, so why should the
burden just be on you? Why should we all help in some ways to
help build these structures or tanks or lagoons or whatever you
need and to help support the proper application of that on land
as a fertilizer?
Mr. Bentley. Exactly.
Senator Harkin. That is what we are trying to do, so if
there is any advice you have on that or any ideas, I am looking
for it, OK?
Mr. Bentley. Well, I think filtration----
Senator Harkin. Well, what we are talking about is better
filtration strips and buffer strips and things like that, sure.
Mr. Bentley [continuing.] Yes. The 100 percent containment
thing is just you are going to put lagoons all over the country
that have the possibility of busting----
Senator Harkin. Yes.
Mr. Bentley [continuing.] Possibly causing a lot of
trouble. Grass filter strips, those things I think are just
something that would be a better deal. There are places where
there is feedlots that are not where they should be. We all
know that.
Senator Harkin. True.
Mr. Bentley. Some of them need to move.
Senator Harkin. I understand.
Mr. Bentley. It is going to cost us a lot of money. We are
the medium size I guess, and I have a son that farms with me,
and we want to keep farming.
Senator Harkin. Again, we have got to take a look at
farming animal waste. You know, I never called it ``waste''
when I was a kid. Anyway, we never called it that, but anyway,
we looked upon that as a pretty valuable resource.
Mr. Bentley. Exactly.
Senator Harkin. With some jiggling of the System and System
supports it could be used once again, as we did in the past.
Mr. Bentley. Sure.
Senator Harkin. Absolutely.
Mr. Bentley. Thank you.
Senator Harkin. Thank you. Yes, sir? This is it. OK.
STATEMENT OF RON BROWNLEE, ADAIR COUNTY
Mr. Brownlee. I am Ron Brownlee from Adair County. I am on
the Soil Conservation Board, and I am also a farmer in Adair
County. One thing I think we forgot here is health care for
farmers. I know in the last few years mine has nearly tripled.
Mine went up 32 percent last year. That is a lot of increase.
That is one thing I think we need to look at.
Another thing, your conservation act. I have been excited
about that ever since I heard about it. I was at the summit
meeting in Ames last year, and I think this is the right
direction for family farms to go, to give the money to the
people that are doing the good job out here instead of
rewarding the people that are causing the problem.
Senator Harkin. Exactly.
Mr. Brownlee. Another thing that I am concerned about is
pasture land going into CRP. If we put pasture land into CRP,
it has to be cropped two years, so we are encouraging people to
raise a crop that we already are overproducing, so why are we
doing that? If we are going to put pasture land in CRP, why do
we not just put it into CRP? It is rough ground, probably
should not be tilled anyway.
Another thing is, we are not getting enough money for
conservation. In our county, we probably--our REAP
applications, we maybe get 5 to 10 percent of the applications
approved because there just is not enough money for them.
As far as value-added, I think soy diesel, our ethanol is
the right way to go. We need to be processing more of our
products here in our own state, instead of--we ship out 80
percent of what we grow. We need to process it here and then
ship it out. That would bring in employment into the state and
would help our own state.
Senator Harkin. Absolutely.
Mr. Brownlee. Thank you.
Senator Harkin. Thank you very much. You are right about
health care issues. It did not come up here, but I hear a lot
about it. I get a lot of letters and calls on the health care
costs for farmers and their families. You are right about the
pasture and the CRP.
This is another one of the things we are looking at. We
have for the about 34 million acres in CRP right now, and the
authorized level is 36 million, 36 point something, but when
the initial bill was passed, and I was involved in that in
1985, we authorized 40 million, and it was dropped down to 36.
There are some people pushing that the CRP thing ought to
be raised. Again, a lot of the wildlife people and the hunters
and that type of thing are pushing for 44 million acres of CRP,
and I do not know.
I am kind of thinking that may be a bit much, because maybe
we could boost it to 34 million, up some closer to 40 million.
I do not know. I do not know how people feel about that.
STATEMENT OF BILL ORTNER, FARMER, DANBURY, IOWA
Mr. Ortner. It hurts young farmers. Bill Ortner, Danbury,
Iowa. My brother and I farm 4,000 acres, and we have two young
sons that are trying to start farming, and our land around
Danbury is very hilly, but we use good conservation practices.
Our land is about all no-tilled or otherwise terraced, one or
the other, and we have got two sons that are trying to start
farming.
As you talk, increasing the conservation program, it sounds
very good to the public, but all it does is encourage outside
investors to come in and buy our land and raises our land
prices so we cannot start--I have got the only son here I think
that is 20 years old that wants to farm, and I have been
sitting here and listening to a lot of the rigamarole, and we
have got to get back to the basics.
We have got to be able to get young people. Mr. Duffy said
it, we have got more farmers over 62 years old than we have got
under 35.
I am also a local Pioneer sales rep, and I have got 100
customers. I lost nine customers last year. I will lose another
ten this year.
This thing is as serious as it was in the 1980's, and
nobody realizes it. You can tell by my voice I am upset,
because this is so important right now.
What you decide in the next 5 years on this farm program,
in my belief, will decide whether we have corporate farming in
this country or whether we have family farms. We need--we need
a grain reserve program so bad. Because another thing that is
so unbelievable is that we keep trying to raise Federal crop.
That is the wrong thing to do.
When you raise Federal crop subsidies up and you make 85
percent Federal crop, it lets the large farmers--I have got
farmers in my area farming 17,000 acres, gives them the ability
to go out and borrow the money and rent the land away from even
us.
I mean you are talking about 300 acre farmers. That is in
the past. They all have full-time jobs, because Mr. Duffy said
it: You make 20 percent return on equity. OK, an acre of corn,
if you can produce $300 off of that is fabulous, but 20 percent
is only $60 an acre. 300 acres is $18,000. No family can live
on $18,000, because the man said, his health insurance went up.
Most of our health insurance is between $5 and $10 thousand a
year.
I cannot believe it. We have all come here and talked, but
we have really never said the true problem, and I would like to
talk to you personally. I could talk a long time, or my brother
has been calling you. Cannot think of your name.
Mr. Moreland. John Moreland.
Mr. Ortner. John Moreland, about once a month because we
are so concerned, and I can see things changing so fast, and it
is just a vital concern, but getting back to the CRP, I am
sorry----
Senator Harkin. What if most of that CRP was in the
buffers?
Mr. Ortner [continuing.] Well, that would be a good point,
but, see, do not make it as CRP, because he has got to rent
land. He cannot afford to buy it, so what we need is more set-
aside.
Then--I know all of the Soybean Association, they do not
want set-aside, but we have got to have it, because then the
set-aside--and pay us for the set-aside to make buffer strips
and to take the worst 10 percent of our soil out of production,
because then he benefits from it and not the landlords.
Otherwise, if you talk CRP, the landlord gets all the money,
not the young person trying to rent the farm.
Senator Harkin. Fair enough.
Mr. Ortner. Thank you.
Senator Harkin. I cut someone off.
STATEMENT OF DAN MORGAN, FARMER, CORNING, IOWA
Mr. Morgan. My name is Dan Morgan. I farm in Corning, Iowa,
member of the Wallace Foundation for 10 years. I agree with a
lot of what people said today. I disagree on a few things. I
like the LDP program because it ensures me there is never going
to be a surplus. I know 4th of July that I better have my grain
sold because it is probably going to be cheaper.
A few things: CRP program he is talking about, two-year
history on CRP: I was paying $35 an acre two years ago for
pasture. Last year it cost me 83 cents per cow/calf unit per
day, $25 a month. That is what it figures out to.
What they are doing in Southwest Iowa is taking the two-
years, getting it into the CRP, taking it away from myself and
the young son I am trying to bring into farming. Exactly what
he says. When young people--you start farming, they get the
marginal land. The marginal land is now in CRP. What I rented
for $35 an acre two years ago is 90 bucks an acre CRP now. No
fool would rent it to you for that.
Senator Harkin. Yes.
Mr. Morgan. The second thing is: Don Stenholm the other day
was having a hearing with the National Wheat Growers
Association, and they said to him: ``We need more money.'' He
says to them, ``There is no more money.'' ``If they cut the
budget,'' he said, ``the only place that money will come from
is Social Security and Medicare.'' I know damn good and well
that two percent of the farmers are not going to be able to
take on the aging population and take away their Social
Security and Medicare. I agree with that.
Third thing is, I think the LDP program works, but I think
there needs to be a cap on the amount of bushels you can
collect per year, and the reason I am saying that is because a
year ago they had a drought in Indiana. Those guys raised 35,
40 bushel an acre of corn some places. They do not get any LDP.
We are raising a good crop. We get a big LDP. We need to take
care of everybody, but we need to do it equitably.
Senator Harkin. Make it a bushel-based program?
Mr. Morgan. Right, exactly. The other thing is: I will seed
down some of my land if you will give me the LDP I have had for
the last two years.
Senator Harkin. Yes.
Mr. Morgan. I will not raise any corn or beans on it, and I
will raise hay and pasture on it.
Senator Harkin. Continue based upon what your history has
been for the last couple, three years?
Mr. Morgan. Right. It looks like to me it would be an
economic incentive because you are guaranteed you are not going
to get any of that--any more corn and soybeans from me, but if
you will give me the average LDP. Thank you.
Senator Harkin. I like that. That is a provocative idea.
[Laughter.]
They are trying to get me out of here. I have got to get to
Spencer.
STATEMENT OF JIM HANSON, NEW MARKET, IOWA
Mr. Hanson. I just wanted to make one comment to the
gentleman, concerning that. You mentioned something about the
buffer strips. We have seen this. Buffer strips has gotten a
lot of publicity, but in a lot of cases though we are
reestablishing buffer strips where a few years previous were
naturally established, but producers have come in or people
have bought this property and stripped them out, so we are
paying for the raping of a land literally that should not have
happened in the first place.
I have never been a real--It took a long time for me to be
a proponent of CRP. I realize all the good that has come up out
of it, but in my county, a lot of the CRP did not--where we--
this was ground that would be farmed by the young farmers, as
the gentleman said, and what happened, it became--the landlords
and the people instead of passing it on just kept on and saw
the availability of utilizing this to their benefit, and you
cannot blame them, but a lot of them potential young farmers
have left.
Whatever program or however we develop a program, there is
going to be some way that someone is going to find a way to
counteract it.
Senator Harkin. Well, we certainly know that.
Mr. Hanson. Excuse me, my name is Jim Hanson. I am from New
Market, Iowa.
Senator Harkin. Never underestimate the ingenuity of
farmers to beat this farm program.
[Laughter.]
Senator Harkin. Any other concluding statements before we
take off from any of the panelists who are here?
Mr. Duffy. I would just like to say thank you very much for
the opportunity. You and your colleagues have a tremendous job
in front of you, and I agree wholeheartedly. What you decide
here is going to decide the fate of agriculture and which
direction we want to go, and so I wish you well and God's
speed.
Senator Harkin. It is a heavy load.
Mr. Williams. We have to look at the state of Iowa, the
individual farms, and land we are on. We have to look at
watershed. I was talking about a small stream runs through my
farm, and I think the biggest thing that is happening right now
in society is that the money that we have got to put in buffer
strips, the filter strips, and I think we can do a tremendous
job of cleaning up that water.
Senator Harkin. All right, Dave.
Mr. Askew. Yes. Thank you for the opportunity to speak to
you. I know I cannot let you go without talking about our river
infrastructure and support for the locks and dams on the
Mississippi, and also we have the small river on the west side
of the state, the Missouri, which we need to make sure with the
plans that are coming out that we have--to use sound science.
We have to understand that and realize that those river
systems are vital to our exports and also just to our internal
ability to market our grain. Thank you.
Senator Harkin. I understand.
I am glad you brought that up. I support that
wholeheartedly. In order for us to get our grain to the ports,
we have got to have our river traffic. We have got to upgrade
those locks and dams.
Quite frankly, to those on the environmental side that are
opposed to that, I say that is the most environmental thing
that we can do. If we do not repair those locks and dams and
utilize the natural flow of water to haul our grain down to New
Orleans, it is going to require I think a couple of million
more trucks a year up and down those highways just to carry
that grain, and that is environmental pollution. That beats up
our highways. That tears things up. I mean this is probably the
most environmental benign thing that they can do.
Ms. Frederiksen. Just a comment about adding value to our
crops here. That is very important, and anything we can do to
streamline things such as soy diesel or ethanol or the
alternative energy sources I think would be a great benefit to
make it easier to adopt those items.
Senator Harkin. I am looking again for these like niche
little things. If there is something that people can start
growing grapes or something again in the Loess Hills, there
ought to be some way to really help them to promote that. I
mean if they can provide some income for a couple, three
families or half a dozen, that is good. We have to look at
things.
Mr. Carney. Senator, I want to thank you. I guess we have
touched on conservation, trade, market, environmental, food
safety, biosecurity today. I realize that new markets are
important. Everything we talked about today is important.
Personally, I figure the environmental and the new
regulations that are coming and trade is probably our huge, top
priorities, but good luck and if you ever need any help, call.
Senator Harkin. Thank you, and I appreciate all of the
input from the different associations, the Pork Producers, the
Farmers Union----
Mr. Lehman. I also want to thank you for coming today, and
I hope to encourage you to do more and more of these meetings
around the state.
Senator Harkin [continuing.] This is the first. We have
another one today in Spencer. Believe me, we are going to be
having more of these kinds of hearings. I need all the input we
can get before we start hammering down this Farm bill.
I thank you all, some of you coming a great distance.
Please feel free to either e-mail me, write, call. Some of you
said you have been calling Moreland. Any thoughts, suggestions
you have for input on this Farm bill, please let me know.
Again, I thank you all for being here.
[Whereupon, at 11:35 a.m., the committee adjourned.]
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A P P E N D I X
March 24, 2001
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DOCUMENTS SUBMITTED FOR THE RECORD
March 24, 2001
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HEARING ON AGRICULTURAL AND RURAL COMMUNITY ISSUES
----------
SATURDAY, MARCH 24, 2001, SPENCER, IOWA
U.S. Senate,
Committee on Agriculture, Nutrition, and Forestry,
Washington, DC.
The committee met, pursuant to notice, at 1:35 p.m., at The
Hotel, Spencer, Iowa, Hon. Tom Harkin presiding.
Present or submitting a statement: Hon. Tom Harkin.
STATEMENT OF HON. TOM HARKIN, A U.S. SENATOR FROM IOWA, RANKING
MEMBER, COMMITTEE ON AGRICULTURAL, NUTRITION, AND FORESTRY
Senator Harkin. Thank you all for coming here today. I
guess I am supposed to gavel this thing to order or something
like that. I really appreciate you being here. Can you hear in
the back all right? If I do not see any heads nodding, I am
going to be worried here in a second. Can you hear me in the
back? Can you hear in the back? You cannot hear in the back. If
you cannot hear, raise your hands.
[Laughter.]
Senator Harkin. It is an old joke. I do not know what we
are going to do if we do not have any loud speakers back there
and you cannot hear. This is not acceptable. This goes back
quite a ways. Do you suppose there is any way of getting any
speakers back toward the back so people can hear? Because you
have got both of them up here. I do not want to disrupt
everything. We have got a limited amount of time.
Audience member. We are OK now. They have improved it a
little bit.
Senator Harkin. Somebody has turned it up a little bit?
Audience member. Yes.
Senator Harkin. If you can hear me back there, raise your
thumb, give me a thumbs up. OK. That is good enough.
Anyway, thank you for being here today. I guess all of us
better just drive these things and speak into them so everybody
can hear. We just had a great hearing, not quite this big. It
was pretty big. I thought it was big, but this outdoes that. We
just had one down in Lewis, Iowa at the Wallace Foundation
Center. We had a great turnout down there and a lot of good
suggestions, good testimony. We will do the same thing here. I
am going to make a short opening statement and recognize some
people. I am going to turn it to the panel, go down the list,
ask them to make a short, concise summary of their statements.
I might have a few questions and interaction. Then I would like
to turn it open to the audience. We have a standing mic
somewhere, I hope.
Back in the center someplace there's a mic that I cannot
see back there. You have got a roving mic. OK. Good. Then I
will just ask you since this is an official hearing, I am going
to make sure you state your name for the reporter who is taking
it down. If it is a difficult name like Smith, please spell it
out, will you?
Let me recognize some people who are here, some public
officials. Iowa State Senator Jack Kibbie is here. Jack, where
are you? Senator Jack Kibbie is here.
Iowa State Representative Marcie Frevert is here.
Kossuth County Supervisor Don McGregor is here. Don, thank
you for being here. Clay County Supervisor Joel Sorenson is
here. Thank you for being here.
Clay County Supervisor Sylvia Schoer is here. Thank you for
being here.
Our soil commissioner for Cherokee County, Tom Oswald, is
here. Tom is here. Thank you for being here.
Buena Vista County Supervisor Jim Gustafson is here. Way
back in back. All right, Jim.
We have Dick Drahota, rural development from Storm Lake.
Thank you for being here, Dick. Gene Leners, treasurer of Palo
Alto County. Gene is here someplace back there. Tom Grau who is
deputy undersecretary of USDA. Where is Tom? Thank you for
being here, Tom.
Did I miss anyone? Are there any public officials here that
somehow slipped under the radar screen? I thank all of you for
being here. If I did miss anyone, I sincerely apologize.
Today I am pleased to be holding two hearings of the U.S.
Senate Committee on Agriculture, Nutrition, and Forestry, in
Iowa. The testimony from our panelists and from the audience
will become a part of the Committee's official hearing record.
Your comments, ideas and recommendations will be a great help
to my colleagues and me as we work to write new legislation and
improve programs affecting agriculture and rural communities.
Again, let me introduce someone else to you just to make
sure you know who everyone is here. My chief of staff on the
Agriculture Committee is Mark Halverson right behind me. Many
of you have worked with him in the past. Allison Fox is also on
my Agriculture Committee and works mostly with conservation
issues. Let us see. Where is Claire Bowman? Claire Bowman is
also on my Ag Committee staff and is here today. Maureen
Wilson, I want to make sure you know Maureen. She runs all of
my Iowa offices out of Sioux City for western Iowa. Maureen is
here. Right back there, Maureen Wilson.
Farm families and rural communities in Iowa and across our
nation need some new directions. They have not shared in our
nation's prosperity. That is clear. Although Freedom to Farm
had its positive features, it had some serious shortcomings
which are now obvious. We have to learn from experience and
make the necessary improvements. We have to start by restoring
a built-in, dependable system of farm income protection that
does not require annual emergency appropriations.
We must also remember that farmers are the foremost
stewards of our Nation's natural resources for future
generations. We should strengthen our present conservation
programs and adopt new ones to support both farm income and
conservation. I have authored legislation to create a new,
wholly voluntary program of incentive payments for conservation
practices on land in agricultural production. That approach,
improving both farm income and conservation, I think should be
at the heart of the next Farm bill.
Now, to meet the challenges, the next Farm bill must
address the broad range of farm and rural economic issues. We
must do more to promote new income and marketingopportunities,
whether that is through value-added processing cooperatives,
creating new products through biotechnology, or developing a
niche and direct marketing. I see tremendous potential for farm
income, jobs and economic growth through clean, renewable
energy from farms: Ethanol, biodiesel, biomass, wind power and
even, on down the line, hydrogen for fuel cells. We must also
ensure that agriculture markets are fair, open and competitive.
We cannot have a healthy rural America and rural
communities unless both the farms and the small towns are doing
well. We must do more in the next Farm bill to revitalize
economies and improve the quality of life in our rural
communities. That includes support for education, health care,
telecommunications, water supplies, transportation, as well as
access to investment capital for rural businesses.
That completes my opening statement. I also have a letter
from Governor Tom Vilsack to be made part of the record. I will
not read the whole thing. He said, I just encourage you to
develop the next Farm bill to help farmers produce conservation
commodities and improve their bottom line and renew the public
commitment to agriculture. I just ask that that be made a part
of the record in its entirety.
[The prepared statement of Governor Vilsack can be found in
the appendix on page 108.]
Senator Harkin. With that, again I welcome the panel, and I
thank many of you for coming a great distance and for more than
one time being witnesses for the Senate Agriculture Committee.
Some of you have been there many times before. It has always
been valuable input from all of you, and I appreciate you being
here. We will just go down the line.
I will start with someone who whenever I mention his name
in Washington, everybody knows immediately who I am talking
about. He is Perhaps the foremost agriculture economist in the
United States today. We are just proud to have him here in Iowa
and at my alma mater, Iowa State. If the Iowa State women just
do half as good against Vanderbilt tonight as Neil Harl has
done in his lifetime, we will blow Vanderbilt away tonight.
Neil Harl, thank you for being here.
[The prepared statement of Senator Harkin can be found in
the appendix on page 154.]
STATEMENT OF NEIL E. HARL, PROFESSOR OF ECONOMICS, IOWA STATE
UNIVERSITY
Mr. Harl. Thank you, Senator. I appreciate the opportunity
once again to be before the Senate Agriculture Committee, and I
will try to keep my remarks brief. I am always reluctant to be
critical of the handiwork of the U.S. Congress, but I want to--
--
Senator Harkin. Why should you be different?
Mr. Harl [continuing.] Make it clear that I do think that
the 1996 Farm bill has failed spectacularly. Let me just
quickly mention why, and let me then follow that with some
commentary as to what I think we might want to do.
The legistion was supposed to reduce government outlays and
phaseout subsidies, and it has not done that. We have reached
record levels this last Federal fiscal year, $28 billion plus.
I'll Return to that point in just a moment. It was supposed to
produce increased exports. It has not done so. In fact, we have
dropped about 18 percent. It was supposed to slow the land
clearing process in South America. Instead more land entered
production in Brazil and Argentina in the years since 1996 than
in the 1990 to 1996 period. It was supposed to reduce
distortions and economic decisionmaking. It has not. It has
produced probably greater distortions than we had prior to
1996. One item, we are consistently producing commodities below
the cost of production, distorting the cost of commodities as
inputs to others. It was supposed to keep government out of
agriculture, get government out of agriculture. Instead
government is probably playing a greater role than ever.
Why did it fail? First of all, it substituted an adjustment
model based on economic pain for a model of relatively painless
adjustment. Farmers do not like economic pain and Congress does
not either. At the first turn, when economic pain began to be
obvious, farmers started receiving funds from Washington so
that the adjustment process built into the bill really did not
operate. I do not think politically it could operate. I do not
think in an open, democratic system we can expect an adjustment
model based on economic pain to work very well, and it has not.
I remember in testimony both before the Senate and the House,
on both sides of the aisle, in 1998 they showed great
reluctance for economic pain to be the adjustment mechanism.
Export projections were quite unrealistic. We were told we
were going to hit $80 billion within a few short months, and it
dropped instead. We forgot the lessons learned about 70 years
ago that it takes a ton of money to replace lost income when
you have inelastic demand. Once you let commodity prices fall,
it takes an enormous amount of funding to replace that lost
income.
Agriculture is the only sector expected to produce flat
out. Deere does not. Intel does not. Boeing does not. No one
else except for agriculture. It is vital we recognize that some
of the voices active in debate in 1996 now profit from all-out
production. Those who are involved in handling, shipping,
storing, exporting and processing all like flat-out production.
Farmers need to begin marching to a drummer they have bought
and paid for, not a drummer bought and paid for by someone
else. As an example, if Deere had been operating under Freedom
to Farm principles for the last three years, there wouldn't
have been enough parking lots to hold the equipment. You could
have bought a new tractor for less than my dad bought his first
John Deere B in 1946 for $1,365. Of course, Deere did not
operate that way. They slowed down the assembly line and
eventually shut it off when they were in overproduction.
What is the problem? In a word, it is production. Too much.
Technology is marching us down the road faster than we can get
it sold. If you think back over the last 70 years, what if we
had had no technology in agriculture since 1930? What would
corn be worth? A lot more than it is today. Would farmers be
better off? Probably not. Because, as the world's best economic
citizens, they would have long ago bid it into cash rents and
bid it into land values. Land values would be a lot higher.
There is an interesting link there.
We anticipate that at some point funds may not be there.
Let me talk about our three options, Senator. The first option
is we can go back to Congress year over year and ask for funds.
As long as we can get funding, then we can limp by. Loans will
stay current. Lenders will be happy. It still leaves trauma. No
doubt about it.
What if we get an economic downturn? We are in the early
stages probably of one now, although there is some difference
of view. We may not have so much money sloshing around
Washington as we have had in the last five years. Dealing with
that second outcome is the second option.
Another possibility is we could encounter a shift in
priorities. What I was hearing from the administration until
just the last few days was maybe we should reassess funding for
agriculture. I hope that is not the case.
Let us assume that we cannot get the funding and funding
declines. What is likely to happen? We would see a
decapitalization of land values because the evidence is clear.
We have capitalized a very substantial part of our benefits
into land values and into cash rents. We could see--with a cold
turkey withdrawal of funding a 50 percent decline in land
values. That is awesome. That destabilizes lenders. It
destabilizes the entire rural community. It sucks a lot of
equity out of the sector. I do not know of anyone in or out of
Washington who wants to preside over that kind of an outcome.
We are very vulnerable. We have become hooked on payments. That
is a dangerous situation to be in. The farther we go, I fear
the more the danger. Because we are building up larger and
larger expenditures. The second option is one that would be
very painful. If we can get the funding, which is No. 1, then
start suffering a reduction, No. 2.
No. 3, begin a shift toward less dependence on subsidies
and modest efforts in other directions. Let me mention, first
of all, an emphasis on conservation. I commend you, Senator,
for the conservation security program. That is one of the
bright spots. I am supportive of CRP expansion. I would support
40 million acres. I would even support 45 million acres. That
in conjunction with your program is an important part of this.
Second, I really believe firmly that we need to return
authority to the secretary of agriculture that was swept away
in the brief euphoria of 1996. I would specifically mention the
farmer-owned commodity reserve. It worked better than we give
it credit for. It could work even better if it were fine-tuned.
I do believe that is one important element in addition to
emphasis on conservation.
No. 2 also, in terms of authority of the secretary, I think
we need to have some modest effort, on a market-oriented basis,
to begin to try deal with our oversupply in years when our
weather is so very good, as it has been. There are a number of
good proposals. I have reviewed a large number. I like the so-
called flexible fallow program because it is market-oriented.
It leaves the decision with the farmer. Each producer looks at
their costs and bid in their land to a retirement program. It
is likely to be more attractive in the periphery than it would
be in the core area of production. That is what we should do
rationally. I like that, and there are some other possibilities
as well.
We should also focus on the structural transformation of
agriculture. I have circulated today copies of a paper I am
giving next Tuesday at a seminar at the National Press Club. I
will have the pleasure, Senator, of introducing you at that
event. We really need to look very closely in addition to the
traditional side of farm policy to start thinking about this
structural transformation of agriculture, what I call the
deadly combination of concentration in input supply, output
processing and output handling, coupled with vertical
integration from the top down. I consider that to be a deadly,
deadly, deadly situation.
We should do what is necessary to assure meaningful,
competitive options for producers. For if you do not have
meaningful, competitive options as a producer, you are going to
get squeezed and you are going to end up being a serf. I do not
use that term just to be inflammatory, but we have enough
experience in the broiler industry to know where we are headed
unless something is done. I would put a high priority on trying
to maintain meaningful, competitive options. If you come to the
end of a 5-year contract to produce hogs in Iowa and you do not
like the replacement contract, you say, ``I cannot live on
that''. Sorry. That is the best we are doing this year. You
look around. If the nearest competitive option is 900 miles
away and there is local dominance by the packer, then you know
what is going to happen with the disparate bargaining power you
have. I really would emphasize that.
Let me just mention one other thing and then I will close.
Senator, I think we need to start thinking about a global food
and agriculture policy. We are in roughly the stage we were
about 70 years ago when we were arguing, is there a place for a
national forum policy? We went through the 1920's, a painful
decade. We argued, is there any role for the Federal
Government? The decision was, no, there is not really a role
for the Federal Government in forum policy. We since have
decided there is, and we operate under that assumption today.
We are about the same position in terms of a global policy.
Let me mention some of the components in a global food and
agriculture policy. Leading the list is boosting Third World
economic development. That is the last frontier for increasing
food demand. The potential is awesome. I do not hear voices
supporting Third World development where there could be a
genuine increase in the demand for food as their incomes rise.
There is almost universal support for that.
Second is food safety. We are probably going through the
period of greatest concern in my lifetime about food safety.
This should be a front burner topic as part of a global food
and agriculture policy.
Food security is another one. We have not known hunger in
our lifetime in this country, but that is not true elsewhere in
the world. We need to assure people that there will be food
security and that we will take the necessary steps. They still
remember the 1973 embargo under the Nixon administration.
Equitable sharing of germ plasm is another possible feature
of a global food and agriculture policy. There is a lot of
worry about that, especially in the Third World countries and
in the tropics. Trade obviously must be a part of a global food
and agriculture policy.
Finally, inventory management. If we have to do something
on the downside, then we should have commitments that they will
do likewise. I do not believe, however, that what we do
modestly on the downside has very much to do with South
America. I honestly believe that there is no empirical evidence
to support the assertion that modest efforts on the downside
induce land clearing in Brazil. As said earlier, we have
actually had more land entering production since 1996 in those
countries than we had in the period 1990 to 1996.
I thank you for the opportunity to appear. I would be happy
to take questions down the road. Thank you.
[The prepared statement of Mr. Harl can be found in the
appendix on page 155.]
Senator Harkin. Thank you very much, Dr. Harl. As usual, a
very excellent statement.
Senator Harkin. Next we turn to Joan Blundall who is the
executive director of The Seasons Center for Community Health
in Spencer. Joan.
STATEMENT OF JOAN BLUNDALL, EXECUTIVE DIRECTOR OF THE SEASONS
CENTER FOR COMMUNITY MENTAL HEALTH
Ms. Blundall. Thank you. I appreciate the opportunity to
present testimony to you today. Frankly, if we had a farm bill
that was working, I would not be at this table today. The
things that I will report on are things that usually are not
discussed in meetings relating to agricultural policy, but they
are critical because what happens with agriculture policy
ultimately comes back and impacts every farm and rural family
in Iowa. I am not pleased to report that as executive director
of Seasons Center for Community Mental Health in this corner of
Iowa we have a 17.3 percent suicide rate which is six points
higher than the national average as of a year ago. This year it
will be even higher.
Senator Harkin. Say that again How much was that, Joan?
Ms. Blundall. 17.3. That is--and the national average is
11.2. Suicide is just another indicator of other underlying
mental health problems. At Seasons Center for Community Mental
Health every day we hear scenarios from families where the
consequence that the way that we live in rural America is not
working for families.
It was not too long ago that an honor student was referred
by her school. At 17 she was suicidal, was unresponsive when
the therapist asked questions until the therapist said, I hear
your father is a farmer. Then the girl broke down about how
difficult things had been within the family for years. We were
able to avoid hospitalization by giving sample drugs and
counseling. The family had no ability to pay for their
services, did not fit into any category for services. The
farmer sold the family antique china cabinet to pay for
services. I wish he had not paid for services.
We had a child this week at the age of 14 who was--who came
in suicidal. The bills to take care of this child will be $200
per week between medication, visits to the psychiatrist and
therapy appointments. The family was ineligible for the State
Medicaid program. They were $12 over the limit for state-
supported insurance program, and there is no mechanism to
assist them. The family has decided to drop out of treatment
and just seek services from the psychiatrist and get
medication. This family unfortunately is in a situation where
the choices that they have are either to give up the job in the
grocery store, which is necessary income for the family,
divorce or play Russian roulette with which part of medical
care they can afford at the time. The categories we have to
help farm families with different types of assistance are based
on urban models. They do not fit the realities of our people.
We have had a 12 percent increase in service as well as a
25 percent increase in emergency calls. On average we have 140
emergency calls a month for a population base of 108,000
people. We class emergencies as a call where the individual is
at risk to themselves or another person. The state hotline has
also experienced an increase in mental health calls though they
may not be classified as emergency calls.
The families who seek services at Seasons often seek them
for problems of marital discord. What we found when the family
comes in, the family is a healthy family, but one of the
members is severely depressed. If we can treat the depression,
the family can remain whole. Our greatest increase in services
in the area is between 13- and 15-year-olds. Children are the
symptom bearers. Mental health concerns that are not taken care
of at this age will crop up later on. We are creating an
inventory of expenses for the future related to human costs.
At a meeting just a week ago here in Spencer sponsored
through a Federal program that I think is very effective we had
well over 100 farm families attend. One of the things that is
of major concern to me and something that I would not have
predicted, in the survey that was given to the families we
found that the major concern they had in one of the survey
categories which was stress. I would have predicted that as
being first. The second concern area for adults was mental
health problems Farm families and rural people do not admit to
mental health problems. It does not fit our culture. It does
not fit with the realities that we have about stigmatization of
care. This says to me that it is a red flag that we need more
and more help. For children the health concern that was
greatest had to do first with abuse, and second it had to do
with lack of insurance or coverage for health care.
If we look at what we can do about the situation and even
if we can create a farm policy that is going to lead us to the
stability that Dr. Harl talked about, we have a period of time
where folks are hurting that are going to call for immediate
attention. One of the things that we have to consider is what
the consequences have been of not having cost-based
reimbursement for mental health services as is done in rural
health clinics. We have almost been crippled--and I say almost
because we will not be crippled--in our response to the needs
of our rural families in this part of Iowa. We have almost been
crippled because of the adjustments that we have had to make
because of the inadequate financial support for Medicare and
Medicaid population. In a 14 county area we can document that
we had to make $467,158.14 worth of adjustments because income
from Medicaid and Medicare and the waiver program were
inadequate. We would have been able to serve everyone who had a
problem and do a lot of prevention if the basis was there.
Second, I think that some of the requirements that are
necessary regarding having physicians present in a clinic
create barriers to access to care. We are in a health shortage
area. We do not have those professionals there, and, therefore,
we can get severe waiting periods. Tax relief and loan
repayment for physicians who go through the national service
corps can be helpful. We do not have enough psychiatrists and
mental health professionals in the state of Iowa to assist with
the needs that are coming. Rural health network grants and
outreach grants have been a lifeblood in our being able to
respond even though we do not have resources. I hope that
continuation of these programs is something that can be worked
toward. We need that kind of basis if we are going to be able
to respond to the emergent needs that are coming now.
Thank you very much.
[The prepared statement of Ms. Blundall can be found in the
appendix on page 175.]
Senator Harkin. Thank you very much, Joan, for an excellent
statement and rundown on what's happening here.
Senator Harkin. Now we have Don Mason, president-elect of
the Iowa Corn Growers Association. Don.
STATEMENT OF DON MASON, PRESIDENT-ELECT OF THE IOWA CORN
GROWERS ASSOCIATION
Mr. Mason. Good afternoon. Thank you, Mr. Chairman, for
offering my organization this opportunity to testify in front
of your committee to present our views on the direction of
American farm policy. Again, my name is Don Mason. As you well
know, I farm about 800 acres of corn and soybeans about 45
minutes south of here in the little town of Nemaha. In my spare
time my partner and I also raise about 5 to 6,000 head of hogs
per year. I am the president-elect of the Iowa Corn Growers
Association, a farm organization that represents over 6,000
growers in Iowa. I am a former Peace Corps volunteer. I worked
for four years in South America and have seen a good share of
the world. When I came back to Iowa--as soon as I got back to
Iowa, I seized the opportunity to get my hands into the Iowa
soil and work the soil. It is my goal in the position that I am
to make sure the young men and women in Iowa, my potential
replacements, if you will, have the same opportunity to get
their hands into Iowa soil and work the land.
I am reminded of a comment I heard some time ago with
regard to farm policy that I think is very applicable in this
situation. A former secretary of agriculture asked a group of
farmers what direction they hoped Congress would go with the
Farm bill. A farmer stood up and said, Mr. Secretary, I would
like you folks to work together to create a farm bill that will
allow me to thrive rather than just survive. That is very aptly
put, Senator Harkin. I would sure like to see a program that
encourages Iowa's farmers to thrive, not just to survive.
I believe that the process that you, Chairman Harkin, and
your counterparts in the House have laid out and have embarked
on will bring all commodity groups to the table to have some
fruitful and honest discussions of where we go next.
Last year U.S. farmers experienced the lowest corn prices
in more than a decade, the lowest wheat prices in 8 years, the
lowest soybean prices in nearly 30 years, and the steepest
decline in milk prices in history. Just two and a half years
ago as a pork producer, I saw the lowest hog prices since the
depression years.
Why is the farm economy in crisis? Can you lay the blame
entirely on the Federal Agriculture Improvement Act and Reform
of 1996? Probably not. In large part the crisis is being fueled
by four consecutive years of record global grain production and
combined with a weak export demand, both of which are beyond
the scope of the 1996 Act. U.S. ag exports are projected to be
lower again this fiscal year after reaching a record high of
nearly 60 billion in fiscal year 1996. Large global production,
the Asian and Russian economic crises, and a strengthening
dollar have all contributed to a weakening of those exports.
We do support some of the underlying principles of the 1996
Farm bill. We like the ability to plant what we choose and what
the market demands, to let the market help us make decisions on
the farm rather than Washington bureaucrats.
A more appropriate question is: Is the 1996 act doing or is
it capable of doing all that farm policy could and should do to
help deal with the problems we face now and to help with
recovery? Clearly the answer to that is no.
Now, I will not delineate all of the supplemental emergency
titles that Congress has had to enact since passage of the 1996
bill except to comment on a fundamental shift that we find
quite troubling, and that is the amount of our net farm income
that comes directly from the government. Dr. Harl has already
alluded to this. Our chart, shows very graphically the amount
of government assistance as a percentage of U.S. net farm
income. It has risen dramatically over the last four years. If
you talk to most farmers, certainly not just corn growers, they
will tell you that we would rather make our income from the
market and not from the government.
Having said that, I would like to quickly summarize our
vision for agricultural policy. Our discussion of farm policy
is guided by eight fundamental principles: First, that
agricultural policy should not artificially impact land values
and stimulate overproduction around the world.
The Federal Government should not and cannot guarantee a
profit, but it should help producers manage risk.
Ag policy should continue and expand environmental programs
such as CRP. Payments for conservation practices should be
fully supported and liberally funded.
Policies should promote value-added processing of
commodities--example, ethanol production, which we have got
quite a bit of going on in Iowa, particularly where the value-
added is captured by farmers. Just an aside here, I would
mention that in efforts to promote value-added projects by
farmers we have to be careful not to penalize farmers because
the value-added enterprise that they develop happens to have
the wrong legal structure or happens to be a few million
gallons of ethanol too big or something like that. Let us be
careful in developing programs.
Policies should retain the planting flexible of Freedom to
Farm.
Policies should make a commitment to reducing trade
barriers and sanctions. As the Senator well knows, I have spent
some time lobbying for improved relationships with Cuba and
trading relations with Cuba and so on. We made some ground,
headway last year. I would say that we have got to remain
vigilant so that the intent of that legislation is carried out
and that we do not slam that door shut again.
Policies should be directed to improving our infrastructure
such as upgrading the lock and dam system on the Mississippi
River.
Finally, policies should support research, development and
marketing programs for commodities.
After weighing all of these needs and concerns including
addressing the need for a safety net to deal with price
downturns and disasters, we also believe that an integral
component of the new Farm bill should be some kind of a system
of counter-cyclical payments. Our group is currently
considering a proposal to create such a payment, and we are
hopeful that our national president will be able to present the
National Corn Growers Association's findings on this proposal
to the House Ag Committee and, of course, to this committee as
well by the end of April. We have noted with great interest a
lot of proposals out there, and we look forward to presenting a
very novel approach to counter-cyclical payments in the very
near future.
The Iowa Corn Growers Association believes that any reform
initiatives should promote conservation. We also see
considerable promise in the Conservation Security Act. We think
it is a great effort. We are committed to the voluntary nature
of conservation programs, and we applaud your efforts to reward
producers for the conservation practices that they have
undertaken or intend to undertake on their own initiative.
In trade policy we also believe that we should continue our
efforts to eliminate trade barriers, to honor our commitments
to WTO negotiations. Therefore, we oppose policies that would
continue to directly interfere with our WTO obligations and
stimulate overproduction.
In conclusion, given various proposals presented by farm
organizations to address the problems of the farm economy, we
understand that it is going to be a little bit difficult and it
is going to be quite a job to reach consensus on a farm bill. I
remain hopeful that we can do that. To paraphrase Robert Frost,
we have miles to go before we sleep. I am also hopeful that a
farm bill process continues to be conducted in such a way as to
promote a very thoughtful dialog about where we need to go
next.
Senator Harkin, I look forward to working with you to
define proposals in a farm bill that will help Iowa's farmers
to thrive and not just survive. I commend your work on this
committee, and I appreciate this opportunity to express the
Iowa Corn Growers Association's views. I will be happy to
answer any questions that you might have.
[The prepared statement of Mr. Mason can be found in the
appendix on page 178.]
Senator Harkin. Don, thank you very much for a very strong
and forthright statement. I appreciate it very much.
Senator Harkin. Next we turn to Mark Hamilton with
Positively Iowa. Mark is also the publisher of the Times-
Citizens newspapers of Iowa Falls, Iowa, and he is secretary/
treasurer of Positively Iowa.
STATEMENT OF MARK HAMILTON, POSITIVELY IOWA
Mr. Hamilton. Thank you, Senator. It is an honor to be here
today. I want to discuss a serious threat to agriculture's
future and to Iowa's future that goes well beyond farming.
Rural Iowa as a whole is dying. There is a relentless
geographic cleansing that is going on in more than half of Iowa
that not only threatens the existence of communities, but also
endangers Iowa cities and farming as an industry.
Demographic trends tell us that mathematically the rural
Iowa population base cannot sustain itself.
The farming industry and Iowa cities seriously
underestimate the damage to their interests if rural
communities are allowed to decline. In agriculture, where off-
farm income is becoming a more necessary component to financial
success, rural nonagricultural jobs are becoming fewer and
further from the farm. Cities, which sometimes view rural
communities as unworthy competitors for development resources,
fail to recognize the traditional source of over half of their
growing labor needs.
Clearly, the demographics of the existing indigenous rural
population dictate depopulation. A resettling of rural Iowa
must occur. The question is under what set of policies and
goals will that resettlement take place. The current policy
record has produced a low-skill, low-wage resettlement result--
jobs our own state college graduates do not find acceptable.
Different initiatives can drive a more attractive and more
acceptable route to resettlement.
I have four suggestions I would like to briefly bring to
your attention.
No. 1, we need a support system for competent professional
developers at the local level.
I submit that the National Main Street and Main Street Iowa
model has been, by far, the most effective program for rural
Iowa communities that I have seen in the last 20 years. It
saved downtown Iowa Falls and has saved many other Iowa
downtowns as well.
The model requires local financial and human commitment and
leverages that with State and Federal training, expertise and
matching financial support. It also requires the local
communities to follow tested development models if they want to
participate. I suggest you look to that model in the area of
rural economic development.
No. 2, when we talk about rural problems, we often hear
about rural poverty. What is more crucial to this discussion is
the staggering level of rural wealth. Sixty percent of Iowa
farm land is debt-free. That translates to $35 billion in
unencumbered assets. There must be incentives to move just a
small portion of those assets into a pooled, risk-shared system
to resettle rural Iowa with good high-skilled jobs. You need
financial and tax experts to take a look at this. I am
certainly no expert. Local banks are required to invest locally
through the Community Reinvestment Act. Why not farmers as
well?
We offer farmers incentives to treat their land in the
public interest. Why not expand that concept to the use of
their government-created wealth for the greater public good?
No. 3, one of the most difficult hurdles for local
communities is to overcome the 150-year-old definition of
community boundaries that were made for a horse and buggy
economy. The state of Iowa and its neighboring states may
suffer in much the same way. Regional coordination of state and
Federal laws and regulations could be improved among the north
central states in a number of areas. A joint effort among
neighboring states pointing to a reduction of jurisdictional
barriers would be productive and worthwhile for rural
revitalization. We ask communities to look beyond their
boundaries for improved alliances and economies of scale. The
states in the region should do the same thing.
Northern Great Plains, Incorporated, a five-state regional
nonprofit rural development organization, which I believe,
Senator Harkin, you were instrumental in creating back in 1994,
is bringing out recommendations on such a project next week I
think it will be worthy of serious Congressional consideration.
No. 4, how do you coordinate a sensible, efficient approach
to resettlement of rural Iowa? This is where I think real,
effective, affordable progress can be made immediately. Our
organization, Positively Iowa, has led a private sector, grass-
roots issue development process for the last 6 years.
Our single goal now is the creation of a Center for
Community Vitality for Iowa. The Iowa 2010 Strategic Planning
Council proposed this idea. Iowa State University Extension and
the College of Agriculture have endorsed the concept. The
center can be modeled after the Leopold Center for Sustainable
Agriculture. It would be unique in that rural leadership that
is actually working in the rural development trenches will
guide it in concert with existing academic and development
organizations.
I am suggesting a decision making body that might be called
the Rural Regents. It could direct and coordinate rural
research and communication and really offer rural areas the
information and resources needed to make better decisions as
they chart their own routes to diversification beyond
agriculture.
This center could lead research, dialog and deployment of
resources to make better and more coordinated decisions. I
believe an appropriation of no more than $1,000,000 could
establish this center The Iowa legislature is currently
considering a resolution of support. I hope you will give this
final recommendation your careful consideration.
The job of bringing back rural Iowa gets harder with each
passing day. The Center for Community Vitality is an idea whose
time has come today. Thank you for your consideration.
[The prepared statement of Mr. Hamilton can be found in the
appendix on page 182.]
Senator Harkin. Well, Mark, thank you very much. That was
excellent. We will get back to that. I have got some questions
for you on this one.
Senator Harkin. Next we will go to Duane Sand, who is with
the Iowa Natural Heritage Foundation of Des Moines.
STATEMENT OF DUANE SAND, IOWA NATURAL HERITAGE FOUNDATION OF
DES MOINES
Mr. Sand. Thank you, Senator Harkin, especially for this
invitation to speak about conservation needs and farm policy.
We are grateful for your long history of conservation
leadership, Senator. We hope the Ag Committee will work with
you to better balance conservation programs and farm subsidies
in the next Farm bill. We ask the committee to address both
needs in the same bill.
Last fiscal year Federal farm support payments were about
ten times greater than USDA conservation payments. Farm
subsidies enable the cultivation of some highly erodible lands,
flood plains and grasslands that would not be cultivated in the
absence of subsidies. Congress and USDA should do more to
prevent and mitigate subsidized environmental degradation.
We strongly endorse the Conservation Security Act as a
means to help balance conservation and farm support. Senator,
your sponsorship, leadership and staff support for the
Conservation Security Act is greatly appreciated.
Farmers and taxpayers can get more benefit from farm policy
if CSA is enacted. The 1996 Farm bill did little to correct
unsustainable farmland uses. Billions of dollars in production
subsidies only encourages more cheap grain. CSA can help
farmers transition to sustainable land uses and conservation
practices. Farm policy can buy soil, water, air and wildlife
benefits in addition to food security.
We think CSA has three major improvements for farmers.
First, the public pays more of the farmers' cost of providing
conservation benefits. Too many farmers cannot afford to do
conservation. The public should pay a hundred percent of real
costs of many practices.
Second, it can apply to all agricultural lands. Stewards of
the land are eligible, and a history of environmental abuse is
not needed to make the land eligible for incentives.
Third, it is readily available and well funded.
Conservation payments will become as accessible and dependable
as farm subsidy payments.
We also think CSA has four major advantages over current
farm policy. First, conservation payments are not considered
distorting of free trade and are not subject to the subsidy
limits set by World Trade Organization.
Second, more producers will voluntarily sign up, thus
agreeing to the conservation compliance requirements for
wetlands and highly erodible lands. By the way, Senator, we
especially appreciate your efforts to strengthen conservation
compliance and Swampbuster by restoring the ties to crop
insurance and revenue assurance. Senate support is even more
important now because of the recent Supreme Court ruling on
Section 404 wetland regulations.
Third, there will be more urban support for farm programs
because CSA will benefit the environment in large parts of the
Nation that historically have not participated in farm
subsidies.
Fourth, CSA is a legitimate alternative to the Freedom to
Farm promise that farmers would transition to market prices and
farm subsidies would end in 2002.
CSA is a sustainable agriculture transition program that
can provide help if Congress no longer supports market
transition payments.
I will take a couple minutes to give an example what CSA
can do for Iowa. The map on display is the watershed for the
Iowa Great Lakes complex. This 62,000-acre watershed which is
partially in Minnesota provides drinking water for several
thousand residents, provides recreation for roughly one million
visitors annually. This area has growing small communities
because of high quality natural resources. It shows that water
quality contributes to rural development because people move to
attractive recreation areas.
Agricultural runoff is a great concern to local citizens
and their water utility managers. Sediment, phosphorous,
pesticides, and microbiological contaminant problems require
much more work for water protection. Best management practices
and wetland restorations to filter farm pollutants are greatly
needed to prevent lake pollution.
Phase one incentives under CSA would greatly expand
nutrient management, manure management, integrated pest
management, and conservation tillage practices on the 37,000
acres of cropland in the watershed, which is gold in color on
that map.
Phase two incentives would help adjust land use on targeted
soils. It would pay for buffer strips, cover crops,
conservation crop rotation, establishment of pastureland, or
for the restoration of wetland prairie or other wildlife
habitat. The small dark blue spots and lines are areas that
deserve those kinds of land use changes in order to protect the
lakes which are the large blue areas.
Phase three incentives would help pay for on-farm research,
demonstration, and establishment of whole farm conservation
systems. Such systems might include organic farming
transitions, the building of soil quality through carbon
sequestration, better manure management using alternative
livestock systems, the control of invasive exotic species that
affect wetlands or natural areas, and the comprehensive
pollution prevention for farmsteads and feedlots.
Farm conservation programs are now used in the watershed,
but progress is still too slow. The Conservation Reserve
Program, the Wetland Reserve Program, the Environmental Quality
Incentive Program each make important contributions to this
watershed and deserve much greater Federal support. However, a
Conservation Security Act is needed to supplement these
efforts. CSA creates the means for serious planning and serious
funding to support sustainable systems on working farms.
We urge the Senate Ag Committee to authorize CSA to enable
major new spending for the conservation of America's natural
resources.
Thank you for the chance to comment.
[The prepared statement of Mr. Sand can be found in the
appendix on page 193.]
Senator Harkin. Duane, thank you very much for giving me a
good rundown on the CSA. That is pretty good.
Senator Harkin. Now we turn to Phil Sundblad with the Iowa
Farm Bureau Federation from Albert City, Iowa. Phil.
STATEMENT OF PHIL SUNDBLAD, IOWA FARM BUREAU FEDERATION
Mr. Sundblad. Thank you, Senator Harkin. As you said, my
name is Phil Sundblad. I live near Albert City with my wife,
Brenda, and our two children. I farm with my father. We have
about a thousand acres of corn and soybeans. I appreciate the
opportunity to be here today on behalf of 155,000--plus members
of the Iowa Farm Bureau.
Farm Bureau members from across the country debated the
future of farm policy at our annual meeting in January. Based
on that debate Farm Bureau supports maintaining the basic
concepts of the 1996 FAIR Act including direct payment program
and planting flexibility. In addition, we are seeking an
additional $12 billion to accomplish our goals within the farm
program of an improved safety net, expanded conservation
programs and more funding for trade promotion activities.
We are very concerned about the approach taken by the House
Budget Committee to provide this funding. The budget resolution
provides for additional money for farm program, but makes it
available contingent on passage of the Farm bill by July 11.
The next Farm bill will have long-term implications for the
future economic health of agriculture as well as our rural
communities. Good policy takes time to develop. If this trigger
is maintained in the budgeting process, it is likely that only
the commodity titles will be addressed.
The Farm bill is about more than program crops. It is about
trade, conservation, rural economic development, risk
management and credit. The program crops comprise only 22
percent of the gross cash receipts in agriculture. A farm bill
that addresses only those program commodities ignores the
majority of agriculture. We cannot support this approach. We
urge the Senate to provide this funding without a contingency
to ensure adequate time for debate on a farm bill that includes
all titles, not just commodity titles.
Farm Bureau's proposal for the next Farm bill includes
these components: The next Farm bill should be WTO compliant.
Our participation in the World Trade Organization's agreement
on agriculture is critical to allow our producers access to
foreign markets. Ninety six percent of the world's consumers
live outside the United States. We cannot afford to shut the
door on those markets.
We support continuation of a direct payment program based
on current payment rates and base and yield calculations We ask
that oilseeds be added as a program crop, making permanent the
assistance that Congress has provided over the past 2 years for
oilseed producers.
Rebalancing loan rates to be in historical alignment with
the soybean loan rate. In addition, we support flexibility in
the loan deficiency payment program to improve its usefulness
to producers as a marketing tool.
Implement a counter-cyclical income assistance program to
provide an additional safety net feature for producers.
Conservation programs should be expanded in the Farm bill.
Producers are facing increased pressures from Federal
regulatory programs such as the EPA's animal feeding operation
rules, water quality standards and total maximum daily loads.
Voluntary, incentive-based conservation programs are proven to
work, but these programs have been significantly underfunded
and targeted primarily to row crop producers. We support an
additional $3 billion investment in conservation programs to
expand the Environmental Quality Incentives Program and to
establish an environmental incentives program similar to the
Conservation Security Act which you proposed, Senator Harkin.
Congress should increase funding for trade programs
including market access development and Foreign Market
Development cooperator program. Removing barriers to trade is
only the first step. We must then convince the consumers in
those countries to buy American agricultural commodities. In
addition, we must fully utilize the Export Enhancement Program
and the Dairy Export Enhancement Program to the fullest extent
allowable under the WTO agreement. We are unilaterally
disarming ourselves against our competitors if we do not use
these programs.
In conclusion, farmers look forward to working with you and
the Senate Agriculture Committee as we develop a new Federal
farm program. I believe we have proposals that take the best
features of the 1996 FAIR Act and combine them with some
additional income safety net protection and expanded
conservation and trade programs to help agriculture share in
the economic success that this country has felt over the last
several years.
We cannot design a successful farm program isolated from
other policy considerations. Congress must recognize that farm
policy is about more than just the program crops. Our success
or failure on the farm is dependent on many factors including
market exports, Federal monetary policy, corporate mergers and
acquisitions, tax and regulatory policies and transportation to
name a few.
Thank you for the opportunity to testify today before the
Senate Agriculture Committee.
[The prepared statement of Mr. Sundblad can be found in the
appendix on page 195.]
Senator Harkin. Phil, thank you again Thank you very much
for a very good statement, Phil.
Senator Harkin. Thank you all. These were good, concise,
straightforward testimonies. I am going to do a quick run-
through to make sure that I heard you clearly. Then we will try
to open it up for some questions
Basically to recap, Dr. Harl said that he felt that the
bill had failed. Last year there was over $28 billion in
subsidies and no increase in exports, which were in fact, down
18 percent. The land clearing process in South America did not
stop. In fact, we have even greater distortions and more
production now. It did not help in getting government out of
agriculture. He asked the question why. Because Congress does
not like economic pain. Boy, is that a truism. We forgot the
lessons that as income falls, it takes a ton of money to
replace it. He basically said that the essence of it is that
overproduction is the problem. Technology is increasing at a
rapid pace
Dr. Harl, basically you said that we had three options.
First, just to keep up the annual payments, just keep them
going and get by. You also raise the question, what if we have
an economic downturn? Is Congress just going to give us the
money?
Second, a reduction of payments. Then you point out what
that might do to land values if we do that.
The third was a shift to less dependence on direct
subsidies and a shift to something else.
You mentioned the CSA, raising the CRP perhaps to 40 or 45
million acres which was in the initial legislation we passed in
1985. You said the authority of the secretary of agriculture to
do other things like the Farm Loan Reserve. It needed to be
fine-tuned. To deal with oversupply you mentioned the flexible
fallow program and some structural changes might be needed in
terms of concentration of the inputs and the output end along
with vertical integration. You were suggesting by that that
ought to be something that we look at in the Farm bill. We need
to basically have meaningful, competitive options for farmers.
You mentioned that we should to now be thinking of a global
food and agricultural policy rather than just a national one.
You mentioned some of the elements that that would entail.
Joan Blundall reminded us all of what happens to policies
that we enact. It has human dimensions to it. Things happen as
a result of these. It was quite shocking to learn that the
suicide rate is 17.3 percent and that is just in this area, I
assume, in your area, which is well over the national rate. She
related some stories of families under stress selling their
family heirlooms to pay for health bills. That we have a
problem in that--and I have to look at this--that a lot of our
assistance is based on urban models and is not applicable to
rural areas. I will take a look at that, and I need some more
information on that. Just the lack of insurance for health care
that we have in rural America and the need for mental health
professionals in rural America and that we just do not have
them. We need more rural health outreach grants.
Don Mason with the Iowa Corn Growers, you basically said
that we need a policy that makes us thrive and not just
survive. That is good. He Talked about getting all the groups
to the table. Again, Mr. Mason went through the lowest corn
prices in a decade, wheat in eight years, soybeans in 30 years,
and milk. Four years of record production globally and the
strengthening of the dollar. Saying that there is a lot of
dimensions to why we are in this problem.
Mr. Mason said he liked the flexibility of the 1996 Act to
make their own decisions, but the amount of net income from
farming is disturbing. He had the chart to show that. Basically
Mr. Mason said that in the policy--and I wrote these down as
fast as I could, we should not inflate land values
artificially. We should not guarantee a profit. We should
expand environmental programs. He mentioned the CRP. We should
do more to promote value-added products, retain the flexibility
of the Farm bill, reduce trade barriers and sanctions and
mentioned research programs and the river problems that we have
with our locks and dams on the Mississippi. You also mentioned
that we need a counter-cyclical payment. You said that the Corn
Growers would be presenting this to us by the end of April. I
look forward to a novel approach as you said. I am looking
forward to that. Then also mentioned the Conservation Security
Act in promoting conservation.
Mark Hamilton with Positively Iowa talked about rural Iowa
dying and resettling must occur. How do we do that? What
policies? He had four suggestions. To support a system for
local developers. He mentioned National Main Street and Main
Street Iowa. Something that I had not thought about, he talked
about the rural wealth that we have. We always talk about the
problems, but we have $35 billion in land that is debt-free in
Iowa. Then you talked about incentives for people that have
this wealth to invest in rural Iowa. I would like to examine
that more. That is an interesting, provocative idea. I do not
know how we do it, but that is a lot of assets.
Third, he mentioned that 150 year old definition of
community boundaries and mentioned the Great Plains Initiative
that we started. The Great Plains was to try to start breaking
down some of the those old, artificial boundaries. Last you
said, how do we coordinate this resettlement? Talked about
creating a Center for Community Vitality, requesting a million
dollars to establish the center. I understand that the Iowa
legislature, you say, is also looking in to assist in this, as
I understand it.
Mr. Hamilton. Although they are not considering funding at
this point because of the states--they are right now
considering endorsement of the concept and hoping that funding
will come from elsewhere.
Senator Harkin. Like us?
Mr. Hamilton. Yes.
Senator Harkin. All right. I understand that. I got that
picture. Duane Sand talked about that Federal payments were ten
times greater than our conservation. In fact, I have a little
chart which I am sure all of you can see quite well. All this
shows is that the CC outlays for last year, $32.2 billion total
and only 1.74 billion for conservation. You said ten times.
More than 10 times. Fifteen maybe, sixteen times.
Mr. Sand. I included some conservation operations, some
personnel in my figure. That is all.
Senator Harkin. This is just CCC outlays. You can see it is
quite distorted. He mentioned the need to balance conservation
and commodity needs in the Farm bill. Strong endorsement of the
CSA and the fact--he gave a good description of what CSA would
do, that there would be three major improvements. The public
would pay more for conservation; it would apply to all ag land;
and it would be readily available. He mentioned how it would be
within the green box of the WTO, voluntary. Would help us get
more urban support and mentioned those aspects and then had an
example of how it might work in the Great Lakes complex here
and ran through the three levels that we have in the CSA, the
three different levels of participation.
Phil Sundblad with the Iowa Farm Bureau mentioned that the
National Farm Bureau wanted to continue the direct payment
program and flexibility in any new bill. There was a concern
about the House Budget Committee that said we had to have a
farm bill by July 11. He said that was not time enough. I can
assure you that is not time enough, Phil. He went on to say
that the Farm bill is broader than just a commodity program. We
have to think about trade and conservation and rural economic
development, risk management and credit within a farm bill. He
said there were six things we had to keep in mind in a farm
bill. It should be WTO compliant. We need a direct payment
program, and you said we should include oilseeds with that. We
have to rebalance the loan rates to get them more in line again
with the soybean rate. There should be a counter-cyclical
program. Conservation programs need to be expanded. You say
they are underfunded. You mentioned the need for $3 billion for
the EQIP program, for example, and then talked about the
Conservation Security Act. Then mentioned the need for funding
for the Market Assistance Program, for the Foreign Market
Development Program and the EEP, the Export Enhancement
Program, that we need. He said keep the best features of the
1996 Act and combine with the above recommendations for a new
farm bill. Again closed by saying that the farm policy is about
more than just program crops.
Again, all great testimony, and I appreciate it very much.
What I would like to do is just ask a couple of questions. Then
I am going to open it to the audience for suggestions and
comments.
First I want ask to Dr. Neil Harl and the rest of you, I
heard some talk this morning about CRP. Now, again you
mentioned--in the 1985 Farm bill when we first started the CRP
program, we authorized 40 million acres. Then that was cut back
to 36 million acres. We got about 34 million acres in right
now. Now, I have been getting a lot of input from a lot of
sectors, wildlife, sportsmen, people like that, others and some
farm groups and others saying we need to expand the CRP program
to 40 to 45 million acres. Now, I heard this morning from some
people saying that, well, that would not be wise because what
about the availability of land for young farmers, that this
bids up the rental value. If there are young farmers who want
to farm, this hurts them especially, I guess, in southern Iowa
where I was this morning. I do not know about this area. I just
wonder if you have any thoughts about that and how careful we
have got to be and how concerned we have to be about that
aspect.
Mr. Harl. I am very sensitive to the plight of the young
farmer, and I think we should continue to be sensitive.
However, as I was saying, if we have income, it is going to get
capitalized into land values. The more income we have, the
higher land values are going to be because farmers bid it in
every time. They always have. The only way you can keep land
values low is to (a)reduce government payments or (b)shrink
margins even more which would be exceedingly difficult to do
because there is very little to capitalize in land values right
now. While I am very sensitive to it, I really think that that
should not be a determining factor here. We are dealing with
trying to boost farm income. That will necessarily provide some
buoyancy in land values.
Senator Harkin. If farm payment programs were geared more
to the producer and production practices of that producer
rather than tied to a commodity, would that be a divorce that
we might want to look at in terms of worth of land values?
Mr. Harl. It would a separation. I am not sure it would be
a divorce, if you can permit me that distinction.
Senator Harkin. OK.
Mr. Harl. The problem we have is this: Let us say that we
have a program in place that targets the more erosive land, the
marginal land as CRP does, and we double the payments on those
for practices. You have to use those practices on that highly
erosive type land. On the other hand, let us say we reduce
payments on the best land that has no erosive capability. What
will we see? We will see the value of the best land fall. We
will see the value of the erosive land rise
Senator Harkin. That is right.
Mr. Harl. That even though we separate those, as long as it
is tied to land, to a specific type of land, it is going to
have the same effect basically. It is going to get capitalized
into those values. You will find people bidding up. We saw that
with the CRP. In southern Iowa where I am from in some of our
counties down there, Decatur, Wayne, Appanoose, and Davis,
actually that program raised the bottom end of the land values
because there was an assurance of income.
Now, there is one other argument that I think is a potent
one. That is, it hurts input suppliers. There is no question
about that. You do not sell machinery. You do not sell
fertilizer. You do not sell chemicals.
Senator Harkin. That is right.
Mr. Harl. Those areas are hurting anyway. They are going to
hurt no matter what. What we are dealing with here is the
potential over the next several years of seeing what I call the
core of production for corn and soybeans actually shrink
because we are not able to sell our products as rapidly as we
are increasing yields. If you look at the current yields that
are being reported by some of the contest participants like Mr.
Childs from Delaware County, we know that it is possible,
physically, to produce over 400 bushels to the acre.
Senator Harkin. That is right.
Mr. Harl. Everybody will slowly march in that direction.
Unless we can increase the demand for corn at that rate, we are
going to see a shrinkage of the cornbelt. What we need to do is
be sure we have in place programs to encourage the idling
peripheral land. hat is the most rational economically, to
encourage the peripheral land to shift. That is what Freedom to
Farm would have done had we stayed the course, but nobody likes
that because it squeezes everybody. In the process of squeezing
the peripheral people enough that they go out of business or
shift to another crop, it squeezes even those on the best
soils. No one likes that. We have to take that lesson, I think,
and see if we cannot encourage that land to shift. Especially
where it is erosive I think the CRP program is a very good
program. It has proved that since 1986 when the first bidding
occurred.
Senator Harkin. Any thoughts on this, Don?
Mr. Mason. I was going to just make one quick comment. That
is that one of the great attractions to CSA is the fact that it
does make that separation between the land and the payment and
apply it more to a practice. Not only that, but as I understand
the provisions of CSA, it would be available to folks in prime
farm country as well as marginal areas. It would be less likely
to cause that distortion there between those areas.
Senator Harkin. Thank you for mentioning that. Thank you
for telling me about my own bill. I forgot that. Because he is
right. Don is right, there are also other things in CSA, like
water quality, for example, that is taken into account rather
than just erosion.
Mr. Harl. Relatively speaking would an owner of relatively
flat Clarion-Webster silt loam be getting as much or be
eligible for as much relative to what they are now getting?
Would those who have the erosive land probably be eligible for
more than they are presently getting? I would say that is
probably the case.
Senator Harkin. That is probably the case. That is true. It
still would be open.
Mr. Harl. It would have to be attractive to the people who
have the best land who do not have the erosion problem,
typically. They have other problems, runoff, nonpoint source,
all kinds of other things. It is a question of the detail. As
the old saying goes, the devil is in the details.
Senator Harkin. I can see someone on that kind of flat land
that might say, ``Gee, they would like to put in some buffer
strips, maybe even a few windbreaks''. Pretty the countryside
up a little bit. Just for things like that that just might help
and that they get a nice payment for those practices that they
are engaging in. Then they might want to say,``Well''--on tier
one there are still farmers on that kind of soil that are not
doing conservation tillage.
Mr. Harl. It is true.
Senator Harkin. They could do that. That is tier one there.
They get in that tier one.
Mr. Harl. It is a question of the attractiveness, the
feasibility and the attractiveness to the individual as a
practical matter.
Senator Harkin. That is true. That is true.
Mr. Harl. I am not saying----
Senator Harkin [continuing.] There will be some who will
say to heck with it. I know that. It is Better to go the
voluntary route and to get people to think about it. Hopefully
they will be more community-minded and they will think about
it. These payment levels would cover more than their cost of
complying or doing that, at least in the first tier anyway.
Well, rental rates. If we do get set asides or flex fallow,
do we need to be concerned about the impacts on feed costs and
livestock industry? I am constantly reminded by my cattlemen
and my pork producers that do not forget about us. It is not
just a commodities program.
Mr. Harl. The answer to that is clearly yes. It would
increase the cost of feed. Cost of feed is now below cost of
production, so we have a distortion occurring. Generally the
livestock industry will adjust. If you have cheap grain, that
normally leads eventually to cheap livestock. The livestock
industry can adjust to slightly higher feed prices. What they
find difficult is great volatility in feed price. I would agree
that it would raise the price of feed, I think fairly modestly,
but it would raise the price of feed compared to the ultra-low
levels existing now. There probably would not be any $1.30 or
$1.40 cent corn, for example, if you had some buoyancy built in
there with some provisions to reduce supply. What we are after
is to try to get those prices up.
Senator Harkin. You are arguing for a balance.
Mr. Harl. That is right. Exactly.
Senator Harkin. Arguing for a balance. What should we do
about South American land, anybody, coming into production?
does anyone have any thoughts about that? We have looked at the
same data, and we see the same thing. It just comes into
production. I do not know what we do about it.
Mr. Harl. Senator, there is a book out, a very good book,
published by Iowa State University Press 1999 by Philip
Warnken, The Growth and Development of the Soybean Industry in
Brazil. It cites the reasons why that country essentially
forced the development of the soybean industry. I have pulled
out from the book several factors that were involved. No. 1 was
the embargo of 1973 that sent a clear message around the world,
including Brazil, that we are not a dependable supplier. That
was a niche for them. No. 2, we supplied them with varieties of
soybeans that were appropriate for their climate. No. 3, we
trained plant breeders. No. 4, they plowed about $4 billion
U.S. dollars between 1970 and 1990 into the soybean industry in
Brazil. No. 5, had subsidies on inputs for a while. They had
preferential tax policies. There is not one mention, not one
mention in the entire book, about U.S. farm policy. Not one
mention. There were other factors, I think, that were clearly
responsible. My own assessment is, Senator, I do not think that
what we do modestly on the downside is going to have much
effect. They are going to continue developing that land. I do
not think there is much that can be done about it. We just
simply have a huge competitive problem on our hands. Their
variable costs are a little lower than ours. Some argue our
land values are too high. Remember, we learned about 160 years
ago that land values are not price determining. They are price
determined. We capitalize into land values whatever there is in
expected profitability. There really on a competitive basis, is
no necessary relationship between land values and perceived
competitiveness. There is for individual producers, but not on
a competitive basis between the two countries.
Mr. Sundblad. Senator.
Senator Harkin. I am sorry, Phil.
Mr. Sundblad. Just as a comment, recent groups have come
back from South America. We probably lost our No. 1 status in
the world as soybean producer to them, but also there is a fair
amount of corn being grown down there. The original thinking
was that the climate was not very good for growing corn, but
not the case. That is also a concern that we need to have.
Their corn production can be very high also, and they have the
acres to do that.
Senator Harkin. I was in China in August and they are
producing a lot of corn in China too. In fact, last year they
exported corn from China. I do not know what is happening this
year, but last year they did. We thought they were going to be
buying stuff from us. I have never been to Brazil, so I do not
know what is going on there. I see the data and I see the
figures, and you are right.
Mr. Sand. Senator, I have a quick comment about what do we
do about South America and their land use decisions. I would
say we set a good conservation policy and ask the rest of the
world to become good conservationists like we are after we get
a real conservation program in place. We still have issues of
what about U.S. policy and the amount of land we are bringing
into production. With wetland regulations we now have reduced
net loss to agriculture, net loss of wetlands to cropland, to
only about 30,000 acres a year. It is still net loss in spite
of everything that the government is doing to restore wetlands.
Likewise on grasslands we still have a net loss of grasslands
because more land is still being brought into production in
spite of what we are spending on CRP and our other conservation
programs.
I would just go back to the point we have got to bring
conservation programs into balance with the subsidy programs
because we are distorting our land use decisions too. We do not
yet have a good system when a farmer says, I am throwing good
money after bad to continue to farm these flood plains and to
continue to farm these eroded, poorly productive hillsides, to
give them the ability to put that land back into grass where it
is a sustainable use. That is why we are so supportive of
Conservation Security Act.
Senator Harkin. I appreciate that. Again I say to all of
you on this Conversation Security Act, we introduced it, but we
are reworking it. Again, any suggestions and advice--any of you
in the audience, please take a look at it. If you need it, you
can get it from my office. I am getting more and more co-
sponsors for it. I hope to make it the heart of the Farm bill
and sort of build the other programs. We have to have some
counter-cyclical programs, direct payment programs and things
like that involved also, but to make this conservation one that
we can hinge it around. Because as you point out, we do tend to
get some urban support for that.
One other aspect of the Farm bill I want to mention--and I
am really glad Mark Hamilton is here--that we have got to focus
on, and that is this whole area of rural economic development
and how we get more funds. I am looking at things like digital
device, how we get broadband access into small communities, any
kind of tax proposals that would help us in that regard, also
new funding mechanisms to get capital here.
Mark, have you heard about this proposal from the Federal
Home Loan Bank Board which would issue CDs, certificates of
deposit, not the other little CDs--based on a Standard and Poor
500 index? It is an interesting proposal. I am going to get it
to you. You take a look at it. It is a way that they think of
getting money to small rural banks. For example, like those of
us who live in small towns, I mean, you do not get much return
on a CD. If that bank could take that CD and tie it to a
Standard and Poor's 500 stock index so that you would benefit
on the upside, but you would never lose more than what you have
got in it, but you could gain on the upside. That this might
help get some money down to some of our smaller rural banks for
the purpose of investing locally. I want you to take a look. I
am going to get it to you. I want you to take a look at it. It
is an interesting proposal, sort of just kind of new, just
started. I want you to take a look at it. Some things like that
we have just got to deal with in this Farm bill.
I know that, Joan, like you say, a lot of this is tied to
policy, but it all works together. If we are going to resettle
rural America as Mark Hamilton says, we ought to be doing it. I
believe that. I believe there is a role for that. I believe
that people would live here if, in fact--as long as we got--I
do not want to get on my soapbox. If we have got the best
schools for their kids anywhere in America, that is economic
development. That is economic development. Think about that.
That brings people here. People will give up a lot if they know
their kids are going to get the best education anywhere in
America.
Second, if we have--if we have not the low wage, but some
different types of job opportunities for people here. That
means if they can get on broadband and they can become part of
this new economy, why not live here rather than live someplace
else? They do not have any traffic problems and things like
that. To the extent that we can get continuing education from
our universities and our community colleges around the state of
Iowa and more fully utilize the Iowa Communications Network for
that so that people can continue lifelong education. These are
the kind of things that tend to bring people to Iowa. That has
got to be a part of this Farm bill mix in some way. Any further
suggestions I would appreciate it.
I am going to open it to the audience unless someone has
some other things that you want to bring up or mention or hit
me with here at all. No. I am going to try to open it up to the
audience here. What I need to have you do is, like I said, just
say your name. If it is difficult, just spell it out so the
reporter can get the proper spelling. We have a mic that
Claire, I guess, is going to pass around. Here is a man right
here already.
Mr. Rose. My name is Frank Rose. I live in Spencer, Iowa. I
am not a farmer. I am a farm owner, but not a farmer. I am
concerned about the farmer. You are talking about a farm bill
that is in the future. We need something now. We have just gone
through eight years where there was not a policy for the fuel
and whatever. It has lacked that. As a consequence, we are
paying for it with higher fuel prices, higher fertilizer
prices, things of this nature which is a determining factor for
the young farmer. I believe that the Federal Government caused
this, so they should take the responsibility. I believe that
they should take what the average cost would be for the farmer
in a normal year, what it is going to be for this year, and I
think immediate payment should go to the farmer for this.
Senator Harkin. Are you talking about energy costs?
Mr. Rose. Yes, sir.
Senator Harkin. I see.
Mr. Rose. The energy costs--because the past 8 years
Clinton did not have an energy program. It has an effect on it.
Neil Harl made the statement that the Freedom to Farm did not
have the exports. Two years ago I went across the street to Tom
Latham's office, and I talked to him about this. He brought out
the fact that three years in a row in Congressional records
they voted additional money for the Clinton administration to
use for export enhancement and the Clinton administration did
not use one dime of it.
Senator Harkin. Export enhancement?
Mr. Rose. That is right.
Senator Harkin. Export Enhancement Program.
Mr. Rose. That may be what happened to our exports deal. We
need something immediate. Thank you.
Senator Harkin. You are right about the Export Enhancement
Program. It was not fully utilized under President Bush or
under President Clinton. Keep in mind the Export Enhancement
Program--and the one problem I have had with it is it has
mostly gone for wheat. We did not get much help in corn on
that. Plus we had problems with Europe on the Export
Enhancement Program because we ran into problems on the WTO
compliance nature of the Export Enhancement Program, so we have
had some problems with it. That is no excuse. It is just to say
that there have been some real problems with it. It needs to be
geared more toward corn. My staff says virtually no corn has
been used under the Export Enhancement Program. It is been all
wheat, and that is not right, that is not fair.
On energy though, I really take to heart what you say about
energy. Someone mentioned this morning in the hearing--and I
bring it up for your thinking--that we who are charged with the
responsibility of developing the Farm bill, and by the way, it
is not too far in the future. We are talking about this next
year--is that we got to start looking at some things that we
can do on energy in agriculture. How can farmers become more
energy self-sufficient, for example? Well, we know that the
most plain ones are ethanol. We mentioned soydiesel. If we
could just get 1 percent of diesel to be soydiesel, that is
about 300 million gallons. That would boost soybean prices by
at least 15 cents a bushel. Last week I was in Cedar Rapids and
poured a gallon of soydiesel into a bus. There are 32 busses in
Cedar Rapids running on soydiesel. It works just fine. They
have solved all the problems in it. Now we just have to make
sure that we try to get it used nationally.
How can farmers themselves become more energy self-
sufficient? There are proposals for wind energy which you are
familiar with in this area. Solar. Biomass. Of course, that is
more applicable to CRP land. We have that project ongoing now
in southeast Iowa where we have 4,000 acres of CRP land growing
switchgrass, and the switchgrass is being burned in a boiler in
Ottumwa, the Ottumwa power plant. Some of the initial results
were pretty good, again depending upon the yield of the
switchgrass itself. That is a possibility. There is a lot of
different possibilities like that that we ought to be looking
at.
Mr. Rose. May I just say one other thing?
Senator Harkin. Sure.
Mr. Rose. In 1996 Congress voted to drill oil in Alaska,
and Clinton vetoed it. OK. That would put out a million barrels
a day. What would that do to our farm economy had he not vetoed
it?
Senator Harkin. I do not know a heck of a lot. I do know
that you are talking about the Arctic National Wildlife Refuge
up there. To access oil would supply about as much as we use in
six months plus it would take over seven years to get it to
market. It would not be available for seven years. Ninety-five
percent of Alaska's north slope is already open for
exploration. Ninety-five percent is already open. The natural
gas that is there cannot get here because we do not have a
pipeline for it. Quite frankly, I think the only reason they
want to drill in ANWR is so they can get the oil to sell it to
Japan. It is not going to help us one bit.
I will say this: We need natural gas. Canada has more
natural gas than they know what to do with. We are supposed to
have a free trade agreement with Canada. What I do not
understand is why we are not getting more Canadian natural gas
down here. That is why two months ago I asked for the GAO to do
an investigation. I want to find out what happened. We were
told a few years ago we had a couple hundred years of natural
gas, not to worry. We had more natural gas than we knew what to
do with. All of a sudden we have one winter that is a little
colder, and all of a sudden we have no natural gas. Something
is not ringing true here. I want to find out what happened to
the natural gas. Why are we not getting natural gas from
Canada? What happened to all that natural gas they told us a
few years ago that we had in abundant supplies for the next
foresee--for as long as our lifetimes and our grandchildren's
lifetimes? Something funny is going on out there, and I would
like to get to the bottom of it on natural gas.
Yes, ma'am.
Ms. Sokolowski. Hi. I am Lori Sokolowski from Holstein. I
would like to express a thank you to you, Senator Harkin, for
allowing local farmers to give our input into the new Farm
bill. The program that I am going to talk about today most
people do not know about because it is a new program that we
are starting in Iowa. I will give just a brief history and
where we are up to date. It is a local food connection farm to
school program. I introduced a new project on local food
connections in the Iowa Farmers Union. The background for this
program started in 1999 when I started networking with a group
of local producers marketing our own food products together.
Our organization is called Northwest Iowa Meat and Produce.
Last summer we started developing an institutional market in
the Cherokee County community. We began working with the Sioux
Rivers RC and D on our rural supermarket project. Northwest
Iowa Meat and Produce became a test program for their food
project.
This past November the food service director from the
Cherokee County school and I attended a local food connection
farm to school conference in Ames. We were recognized as being
the first local food connection in the state for providing
ground meat products in a local school system.
Senator Harkin. Good.
Ms. Sokolowski. I learned from that conference that Iowa
has been approached to join a Federal school lunch program
along with nine other states. In January of this year I put
together a group of people who could create a new program for
the development of a statewide institutional market. This is a
way for producers in Iowa to be able to network together. In
the two months since we have had our meeting each agency and
organization has found ways to make changes in the current
programs and be able to collectively work together on being one
team for this initiative. We will meet together again on March
30. Iowa is now a pilot project program for the Federal school
lunch program. We will be introducing a complete food nutrition
package offering both meat and produce from local farmers.
Senator Harkin. That is good.
Ms. Sokolowski. Iowa has the oldest population age in the
United States. However, our state is rich in resources. We need
to take steps to turn this State around in agriculture and to
help farmers find other alternatives in their current farming
operations. We need to find alternative markets for their food
products. It is time for local farmers to take control of
marketing their own food products. It is time for producers to
have more input on the current agricultural programs in our
state. It is time to have programs that support local
producers, not large corporations. It is time for local farmers
to keep the retail share of our products and to share those
profits in our communities. It is time for us to stop the
importing of food products into our state, especially the items
that are not labeled with the country, state of origin.
I would urge everyone to support the program that we have
started. It is a challenge that we face. Sometimes we have to
buck the system to get this started, but we have a lot of
support out there. After March 30 we will have a new update on
our new development.
Senator Harkin. I commend you. this is the type of out-of-
the-box kind of thinking and little things that we can do in
the state of Iowa. It was said this morning that 92 percent of
our productive land in Iowa is for two crops, soybeans and
corn. Maybe we ought to be thinking more about livestock
production, how we do different types of livestock production,
different types of livestock. Again, this is not going to
replace it all, but little niche markets, little things that
are going on around. I met a producer this morning who was
producing Wagyu beef. I do not know. It is expensive. He has
got a market for it. Not everybody can do it, but I am just
saying there may be things like that. What can we do to promote
that and help take away some of the economic disincentives for
doing things like that?
Organic farming. We are getting more and more organic. What
was that mentioned this morning? A hundred and some thousand? I
forget. 140,000 acres in Iowa right now to organics. Evidently
it is growing. There is more and more of a demand for that.
Again, it is not for everybody, but, gee, if this helps bolster
some local income. We had a thing about what do we do to help
people if they want to get involved? The CSA, by the way,
Conservation Security Act, will help organic farmers because
they will be able to do some conservation practices and get
paid for it. Otherwise they would not get anything. I just ask
you to start thinking about things like that, some of the
things that came up this morning.
I am sorry. Yes. Go ahead.
Mr. Rohwer. A Chinese proverb says, unless we change our
direction, we are likely to go where we are heading.
[Laughter.]
Mr. Rohwer. I used to think it was a joke. They say the way
we are heading pretty soon there will be one farmer per county
and his wife will have to work in town to put groceries on the
table.
Mr. Rohwer. The relevance of this can be seen in the
Economic Research Service finding that the top 10 percent of
the farm subsidies get 60 percent of the subsidies. The top 10
percent nationally get 60 percent. In Mississippi 83 percent,
and even in Iowa it is most of 50 percent. I propose that, as
one gentleman said, we disconnect the subsidy from commodities
and direct it toward people. If that is done, it can be done in
a number of ways. One way would be to have a limitation that
amounted to something. Incidentally, do not leave that
limitation to the discretion of the current secretary of
agriculture. That would not work at all well.
Flexible fallow will be the same thing without a
limitation. It will again exacerbate the bulk of the benefits
going to those who are already the wealthiest. Of course, the
two of the biggest difficulties with the 1996 bill is that
there is no provision for beginners whatsoever, and there was
provision for people who were not even farming anymore. That is
not good.
The idea of urban support, every farm bill has in the
preamble that this is for the family farmer, and then the
benefits go to the top 10 percent again. We could get some
significant urban support.
Now, I should not say this because I have talked to the
devil. I visited with Larry Bohlen at the farm forum who is the
man that started the StarLink fiasco. He says that his
supervisor wants him next to work on family farm issues. Well,
if all that political generation of power could be devoted to
family farm issues, think what we might have.
My plea is that we have a limitation on the subsidy per
farm household. There are a number of possible ways that that
could be done that I will not go into. I am sorry. I am Robert
Rohwer from Paullina, Iowa, an active farmer and a landowner.
Senator Harkin. I am sure that we will have a debate once
again on payment limitations. We do. Sort of as day follows
night we will have a debate on it. I do not know where it is
going to go, but we keep having a debate on that every time we
come around. I do not know. Neil, do you have any observations
on his----
Mr. Harl. Let me just add this: Under flexible fallow the
benefits would go to those who would enjoy the better prices,
including the ones who did not bid their land into the program.
Plus there would be a higher loan rate for those who did. Now,
to the extent that that benefit falls unevenly, it would do as
Mr. Rohwer says. The problem that we face is, is it politically
feasible to impose tough limits? In 1999 we had a $40,000
limit. In 2000 it was raised. The sum today of everything you
could collect would be something over $400,000, from all the
programs. We have a limit, but it is not a very effective one.
That is a worthy objective. With each passing day it becomes
less and less possible because of the growth of the supersize
operation.
Senator Harkin [continuing.] If anything I think--and
again, this is my sixth or seventh farm bill--it comes up every
time. Now I recognize more of a support or at least thinking
that we do not need to subsidize every last bushel and every
last bale of cotton. We just do not need to.
[Applause.]
Senator Harkin. I sense this more and more, that it is just
leading to all kinds of distortions. Obviously if you subsidize
every last bushel and every last bale, then it does, of course,
I should not say this in front of an economist, it does seem
that it really promotes larger farming operations because the
bigger you are, the more money you get. Then you can outbid
someone else for land. Therefore it just promotes getting
bigger. Our farm policies basically have the perverse kind of
an effect. It is really actually promoting larger farmers if we
subsidize every last bushel and every last bale.
Mr. Harl. Senator, in my view this is one of the threats to
continued subsidization in agriculture. The nonfarm world is
very supportive of funding if they think it is going to family
farmers in trouble. The polls have shown for years that 60 to
65 percent of the people, uniformly, regularly indicate that.
If they think it is going to the huge operations, that support
drops and drops sharply. we do have a threat here that we need
to deal with in terms of maintaining a flow of funding for
family size operations.
Senator Harkin. Absolutely. Yes. Back here. We have a whole
lineup of people back here. Go ahead here, and there are a
whole lineup of people.
Mr. Solberg. My name is Linus Solberg, and I am from
Cylinder, Iowa.
Senator Harkin. Hi, Linus.
Mr. Solberg. It gives you that they let radicals in here,
does not it, Tom? They did not frisk me or anything. I want to
thank you for having these hearings out in the country and
testimony from farmers and not lobbyists. I would like to talk
about a lot of things, but I am just going to talk about the
pork checkoff. I am just going to talk about only the Farm
bill.
In America it seems that you can only get as much justice
as you can afford. When Congress debates the next Farm bill,
family farmers will not be able to afford much justice, but
corporate America will. Why do we continue to force family
farmers to subsidize corporate America with overproduction?
In 1996 I told my Congressman, Tom Latham, that Freedom to
Farm would be a disaster. Any farm program that forces farmers
to plant fence row to fence row so that corporate giants can
purchase cheap grain for export and cheap feed for the
industrial livestock operations is doomed to fail. Forcing
farmers to produce as much grain as possible in order to milk
the government out of deficiency payments is ridiculous. Never
in U.S. history have farmers been forced to maximize their
government payments by predicting when grain prices will reach
an annual low.
The new Farm bill needs to give our new secretary of
agriculture the authority to manage grain supplies. For decades
we have received ridiculous promises of increased exports.
Farmers have heard all the propaganda. Corporate America
brainwashed many of us into believing that GATT, NAFTA, WTO and
Fast Track will save the family farm. Every farmer and rancher
supports more exports. However, we need to face the facts. Most
industrial nations have their own overproduction problems, and
the poor nations that need our food cannot afford it.
If the Ford Motor Company operated like the American
agriculture, it would run all its assembly lines at full
capacity 24 hours a day while actively seeking technology to
produce even more cars. Rather than reducing output and meet
demand and make a profit, they would continue to overproduce
even though they were losing thousands of dollars on every car
they make. If Ford executives behaved this way, they would be
asking their stockholders to subsidize the company's losses on
their cars. That is exactly what is happening in American
agriculture. Congress and administration wants taxpayers to put
billions of dollars into a system that is producing more grain
than the market can handle. Now, you did not write this. OK? No
American business operates this way.
Freedom to Farm was written by corporate America to sell
seed and chemicals and make available piles of cheap grain.
Farm Bureau and our commodity groups have been on the bandwagon
since the beginning. Supporters of Freedom to Farm promise that
the export explosion would keep prices high forever. They lied.
Senator Harkin. Linus, how much longer? Thanks, Linus.
I did not want to cut you off. I just wanted you to sum it
up was all.
Mr. Solberg. I would like to have you solve the problem at
the end. I will give you a copy.
Audience member. Good summary.
Senator Harkin. It is a good summary. I just wanted you to
summarize it. I did not mean you to sit down. Go ahead.
Mr. Nolin. My name is Karl Nolin. I am the president of
Nolin Milling, Dickens, Iowa. If there was a Neil Harl fan
club, I would have been an original member. I only--I got lots
of thoughts, but I only want to talk about one thing. We are
going to develop new seeds. I want these new seeds that are
going to do wonders for our environment to either be owned by
the colleges or by some entity of the government. These new
seeds are going to be perennial crops that we plant once and
harvest year after year after year. They are going to do
wonderful things for the environment. We have to make sure that
all the new crops that are going to be developed and all kinds
of new traits have some public domain because there is going to
be contracts on these crops that you will not own, you will
rent the plant. When you rent the plant, I would rather rent it
from Iowa State college than a private entity. It is going to
happen. It has to happen. It has tremendous things to be said
for the environment because we are going to plant that crop. It
is going to hold our soil. It is going to keep our water from
being polluted. We are also going to have nitrogen fixing so
that we do not have to use nitrogen fertilizer which cleans up
East Lake Okoboji so it looks like West Lake Okoboji.
There is a lot of really good stuff coming down the
pipeline, and we got to get in the Farm bill lots and lots of
research money so this becomes public domain and we are going
to develop all types of specialty seeds. Corn is not going to
be corn. Corn is going to be corn with special proteins so we
do not have to add any soybean meal to feed. Corn is going to
be 35 percent oil corn. Maybe we can raise corn instead of
soybeans. We can change anything around.
The other thing, we can do this. There is a new corn plant
that is a perennial, will grow year after year, that has been
found in Mexico. We do not have to use gene splicing. It is
just a matter of standard plant breeding. It is going to take
us a long time if we do it with standard plant breeding, but we
can do these things.
Senator Harkin. Corn that just grows year after year?
Mr. Nolin. Yes, we just go harvest.
Senator Harkin. How does Pioneer feel about that?
[Laughter.]
Mr. Nolin. Pioneer understands this. Pioneer understands it
completely. Pioneer will not sell us seed. You are talking to a
man that sells a machine that transfers seed. We are out of
business with that machine. Pioneer understands it. They do not
have to sell you a bag of seed. They rent you the plant, and
you pay an annual fee. We also farm a little bit. I want to pay
my annual fee to somebody that is easier to do business with
than--well, I just assume Iowa State college--easier to do with
than Monsanto. You got the point. I would like to have you look
into it.
Senator Harkin. Thanks, Karl. I will do as many people as I
can here.
Mr. Biederman. My name is Bruce Biederman. I am from north
Iowa, Grafton area. I have a farm bill that I have been pushing
for the last couple years, and I have been working on it for
the last 15. It basically addresses what Professor Harl has
been talking about. I call it the zero cost farm bill because I
go with the loan rather than any subsidy payments whatsoever.
Support, not subsidize. What I call it is cost of production
loan on all storable commodities, corn, wheat, beans, oats,
cotton, anything. It would be set up so that in the fall is
when you decide whether you are going to be a participant of
the program, and this year's crop would be eligible for the
cost of production loan. Then the next spring you determine--
you set aside maybe a small percentage of your land to start
with. It would be like conservation reserve acres to start with
rather than----
Senator Harkin. Is this a nonrecourse loan?
Mr. Biederman [continuing.] The loan would be set up so
that when it came due that the price was not at or above the
loan rate. It would default into a farmer held reserve. Then
once it gets into there, it would have a little bit like Bob
Brooklyn's program, like 125 percent release and then 150
percent call rate. Then the size of the reserve would determine
how much of that particular commodity would be up for program
the next year.
Another stipulation would be that it figures out to about
like a 1,500-acre farmer would be about the maximum size that
you would subsidize or support this way. Once you get certain
crop--or commodity up to a certain level, that you would maybe
shift to another one or whatever. You do not have to set aside.
You would modify the price. It would bolster it to at least the
cost of production or above, and you would be guaranteed a good
price if it did go on the reserve. It would be self-regulating
because the size of the reserve could be determined by the
production.
Senator Harkin. Do you have some paper on that?
Mr. Biederman. Yes, I do. I have several copies.
Senator Harkin. Thank you. Thanks, Bruce. If any of the
panel up here have any thoughts or suggestions, just yell out.
Yes. Go ahead. I am sorry. Go ahead, please.
Mr. Wimmer. My name is Perre Wimmer. I am a local livestock
broker. Talk daily, weekly with a lot of pork producers in
northwest Iowa, southwest Minnesota. A lot of the topic today
has been on grain. However, I guess my question is in regard to
the pork checkoff recent vote that occurred. In talking to most
pork producers they feel and realize they need to promote their
product. However, a lot of them very concerned that the recent
referendum that was clearly won in the favor of those producers
has been circumvented and overturned without any regard to
those persons that voted. Just wondering if there is any input
from your part on that?
Senator Harkin. Well, I was going to ask if that is right.
We had the pork producers this morning. Well, if you are asking
my view on this, look, we are facing a difficult situation. It
looked as though the district court in Michigan was going to
throw the whole thing out. I understood that Secretary Veneman
had to try to reach some agreement on this and to strike some
kind of a deal. I understand that. My only question is why it
had to be a two year? Now it goes to 2003. That seems to be way
too long. We intend to have her down before the Ag Committee to
ask about this. I do not know exactly what the next step is in
this.
I will tell you one of the things I am thinking about
working on in the Farm bill that I have not mentioned here but
I would like to have feedback from you on it. The whole
checkoff issue as I talked to both sides on this issue, raised
a really serious question in my mind as to all these checkoffs
that we have. We have corn checkoff, soybean checkoff, cattle
checkoff, pork checkoff, chicken checkoff, turkey. We have all
these checkoffs. It seems to me that when you have a mandatory
checkoff system like that, that periodically it ought to come
up for a vote of the producers.
[Applause.]
Senator Harkin. I am just saying every five years there
ought to be a vote among those who participate as to whether
they want to keep it or not. That might have a salutary effect.
There was some legitimate concern on the part of some pork
producers that the council----
Audience member. NPPC.
Senator Harkin [continuing.] Yes. The checkoff people were
too close together and that they were not separated and they
were not really getting value for the checkoff money they were
putting in. Well, if a vote has to come up even in court or
anything every 5 years, then maybe the people who are handling
all that money will be more responsive to the producers and go
out and be a little bit more careful. Like anybody here that
has got to run for reelection. You pay attention to your
constituents.
Mr. Wimmer. I guess my concern of the whole thing was that
it was a democratic process that was gone through, and that
vote was made. Whether NPPC liked it or not, that was the will
of the people. Al Gore even got a chance to take his court to
the supreme court. It appears to me that the pork producer was
just circumvented at that point. Just the principle of it.
Whether you are for it or not, the principle of how that was
handled is of concern.
Senator Harkin. It is of great concern. It was not handled
well. Like I said, the court case was one that was hanging over
their heads. Perhaps--and I just throw this out--I do not know
that both sides like this. I have suggested that maybe we ought
to just have another election. Maybe just have another vote out
there. Well, those who won the vote said we had the vote. I am
not certain that we just cannot--maybe we have to go through
that process again. I do not know.
Audience member. Vote until you like the outcome?
Mr. Christensen. We have another example here that could be
stated. Carl Jensen has one.
Senator Harkin. We are facing the situation now that I do
not know what to do about it other than try to have another
vote or have it come up sooner than 2003. That is the only
thing I can think of unless somebody has some ideas on this.
Yes.
Audience member. I think when----
Senator Harkin. You better get a mic so everybody can hear
you.
Ms. Bowman. We have a couple people waiting for really
quick comments. We are running really short on time.
Senator Harkin. I will get back to you.
Mr. Taylor. I am Steve Taylor from Hartley in O'Brien
County. I guess I am maybe one of the dying breeds of farmers
that my sole family income does come from the farm.
Senator Harkin. You are a young man.
Mr. Taylor. I am hoping to keep it that way, I guess. One
of my things or thoughts is I do not think you have realized
that we have not lost a ton of farmers over the last 20 years
with the farm policy, but we have lost a lot of people like me
that have solely lived off the farm. If you would take them
numbers, you would find that you have maybe errored in your
ways.
Coming back to the idea of subsidizing production, so it is
the fairness issue. When I first got thinking about farm
policy, I always thought we needed the government out. Let us
work on our own. You know, I am ingenuitive enough I can make
it work. When I got to start working and competing with
government dollars, it is almost impossible for me to do. The
longer I think about it, the more I realize and the more I get
involved, we are not going to get the government out. They want
their hands in.
The way we do that, we have got to change. If we are paying
anybody over the cost of living, we are unfairly subsidizing
production. Neil Harl talked, if we cut payments altogether, we
are going to decrease our values in land and rent. Well, we
need to cut them 30 percent to bring them back in line from
what we have skewed with what we have done since 1996 I guess
my feeling is that we need to look at this--you are never going
to make a program fair to everybody. You have to decide which
side of the fence do you want to stand on. Do you want to
support the rural communities, or do you want to support the
guy that is going to grow and grow and grow? I guess that is
about as simple and plain as I could put it. I have got a lot
of other details, but I could go on and on and on.
Senator Harkin. You have summed it up pretty accurately, I
think. That is just about the divide right there.
Ms. Bowman. We have several----
Senator Harkin. Right here. We had this man right here
wanted to say something. Claire, right here.
Mr. Braaksma. I am George Braaksma from Sibley, Iowa. I
guess I have been taught in this country that our vote should
count. In the direction of in the general public's interest
that is what America was built on was a vote. When them votes
do not count, that creates people to think different about our
country. That goes to our election that was last fall, also
here in agriculture the same example with the pork issue. That
has got to be brought up that maybe this changes people's
attitude when it does not count, that we do not have full faith
in our country. That is disappointing.
Also on an issue with the--I am in a situation with a four-
lane road going to go through some of my property. With that in
hand, that is in the general public's interest for better
roads. I am all for better roads. I am all for issues that is
for the general public.
It goes back to Mr. Sand over here with conservation
matters. I feel strongly with conservation matters, that we
look at that as if the water was a road and that we take care
of them type of things that human beings need. That is, to
survive we need food, we need water. We look at energy as one
of the things that is something that is above food and water.
We need to exist with food and water. Conservation practices to
me in the Farm bill is one of the highest priorities because it
is what we need to raise that livestock and all them things. I
am going to let that go at this time.
Senator Harkin. Good. I appreciate that. We are going to
make it, I hope, one of the highest priorities.
Mr. Hartman. I am Joel Hartman, a farmer and cattle feeder
here in Clay County, Iowa. I served the Iowa Cattlemen's
Association as the chairman of their environmental policies
committee. I will try to keep my comments very brief here. I
have a concern with your farm bill proposal, Senator. It is
Section Prime E dealing with annual payments not being able to
be used for the construction and maintenance of animal waste
storage facilities, as several panelists have mentioned the use
of the EQIP program in employing practices to help us protect
our water resources. As you know, the EPA is considering some
extremely expensive regulations, regulations which will cost us
about a billion dollars to comply with. Some that by their own
estimates will incur $5 of cost for every dollar of benefit. If
the cattle feeding industry is going to be expected to shoulder
that kind of a cost, we certainly are going to need some
Federal assistance in doing that.
The EQIP program right now is part of the current Farm bill
and is the only mechanism we have to work with that, but the
program is woefully underappropriated. Only about $200 million
has been appropriated this year in through the program. Here in
Iowa it is about 5.7 million, and yet there was over $15
million in requests made of that program. We need a lot of
money in there.
There are also some restrictions on that program that make
it inoperable for our livestock producers to use, that being in
particular, the restriction of the 1,000-animal unit cap. A
1,000-animal unit feedlot is a capital investment approximately
equal to 140 acres of Iowa crop ground. The EQIP program does
not make a restriction on how large a farmer can be in acres to
receive a direct cost share benefit, but they are doing that
with the livestock producers and doing it at the very level
that EPA is targeting for the most expensive programs to be put
in place. That is one problem that we need to have addressed.
We really cannot wait for the Farm bill to do it. That is
something that could be done right away.
The other problem with the EQIP is the prohibition on the
use of EQIP moneys for engineering. EPA requires that their
NPDS permits be signed off by a licensed engineer. The EQIP
program will not cover that expense. For those smaller AFOs
that is a major part of the expense. We need to have that issue
addressed. With that, I thank you, Senator.
Senator Harkin. Just a second. I did not know this about
the engineering. I was just asking my experts back here on
this. Evidently EQIP covers technical assistance and everything
like that, but it does not cover third-party engineering or
something like that. This is new to me.
Mr. Hartman. No, sir. The word that I have from NRCS is
that it will not cover the third-party engineering. The
projects are basically pre-engineered by NRCS people. The
technicians will come out and help install, but EPA still
requires the NPDS permit to be designed by a licensed engineer.
The cost of that engineer is about the same irregardless of the
size of the operation. If you are looking at 500 head versus
5,000, that 500-head operation will incur a ten times larger
engineering expense. We think that could be addressed by simply
removing that requirement, or that restriction, excuse me, from
the EQIP program along with that thousand animal unit
restriction. It is very discriminatory and does not make any
sense.
Senator Harkin. Right. Both are duly noted. Thank you for
the engineering. This is new to me. I did not know about that,
obviously about the CAFO limit of a thousand. We are looking at
changing that, maybe expanding that somewhat. We do not know
where and how much. Also the EQIP program, you are right, we
have got three to five times more requests than we have had the
money for. We have got to get the money in there, and hopefully
we will have room in the budget this year for it. Again, we
talked about the budget. It was Phil mentioned something about
the budget earlier. I do not know about the House side, but on
the Senate side it looks like our budget was proposing perhaps
about a seven percent cut in some of our discretionary
programs. I do not like that at all.
Mr. Hartman. Please be sure that that type of funding will
be available under your proposal, Senator. It is a little
contradictory between part E and I think an earlier part in
your program.
Senator Harkin. We were focused only on land. We thought,
we will leave the EQIP program to do the facilities, see. That
was going to be the dividing point. Maybe there has to be some
melding of the two somehow. Thank you. Duly noted.
I am told we have three people left. I just want you to
know if any of you have any written comments, just please get
me written comments any time or you can e-mail me at my
offices. This is going to be an ongoing process. I will be
having more hearings in Iowa with the Ag Committee, so do not
worry. We will be having some more in Iowa here in the months
coming up. Who else is left? Here. You have got a young man
right behind you.
Mr. Meyer. There are three things I have got to address you
with. First of all, Don Meyer. I live up by Harris. Anyhow, one
is this conservation and CRP ground. I had the very same thing
confirmed by a man alongside of me a long distance away.
Anyhow, in our area I can point to you farms that were bought
and then put the whole farm in and then they go on down to
Florida or Texas and were being paid so much for the acre.
Actually the Government is buying the farm because they put a
down payment in it, and then after that they got so much an
acre. After while the thing is paid for. That is one.
Then the second is I do not care what direction you go down
the highway. You see the monument, the silo, and the empty
feedlot and the empty--this Iowa has lost--that is what I would
call a monument to a dead industry. Am I right, guys, or not?
Then the estate tax. My father bought 240 acres for me back
in about 1963, 1964. It worked out he paid 80,000. Then I had
to wait for Mother to die in order to inherit that, get it. I
had to pay just the amount what Dad paid for it in 1962 or 1963
for estate tax. All of a sudden I owned a piece of dirt if I
could pay estate tax of 80,000 on that piece of dirt. Then it
would be mine. There is one there, this estate tax.
Senator Harkin. We are addressing that hopefully in the tax
bill, and we are going to raise some of the levels. Right now
it is 675. What is it now?
Mr. Harl. It is 675,000. If there is a business involved,
it is 1,300,000 including the family on business deduction,
plus a special use valuation cuts the value of farmland very,
very substantially. Those are doubled for husband and wife
together. I have indicated my support for raising that to 2 to
2.5 million per decedent.
My concern--and I am opposed to the repeal of Federal
estate tax for reasons that we do not have time to go into. I
do not think it should impact adversely what I call mere
mortals. What I worry about are people up here in the
stratosphere in terms of wealth. We need a Federal estate tax.
What is more important for agriculture is the new basis of
death, a wipeout of the gain at death. That we could lose if we
are not careful here, so it is a very complex issue. If you
would like to have more information, I do have some
publications on the arguments for and against repeal.
Senator Harkin. I can assure you that we are going to raise
the level of estate tax exemptions for farms and small
businesses. That will be raised. I do not know exactly what the
level is going to be. It will probably be somewhere in the
neighborhood of as much as $3 or $4 million perhaps, somewhere
in that neighborhood, which will just about cover everybody. It
will be in that neighborhood. I can assure you that is going to
happen.
Mr. Jensen. Carl Jensen, a cattle feeder from Everly, Iowa
and chairman of the marketing committee of the Iowa Cattlemen's
Association. I wanted to thank you for holding this hearing. I
have written up the comments, and I will hand them in to you. I
am just going to summarize real quick what I have got in here.
Basically the livestock mandatory price reporting bill has been
stolen by the bureaucrats, and it is not the bill that we
intended to be passed to put into effect. What has happened to
the law because of this 360 Rule, which I am sure you are aware
of about the three packers or one packer having more than 60
percent of the business, those figures cannot be reported.
While the new mandatory bill gives us more historical
information that economists can use, like Dr. Harl and others,
to analyze what happened, we are actually going to have less
information for cattle feeders to use to market their cattle
and know what their cattle are worth. We need to see if there
is something that you can do.
An example of what happened, the 360 Rule also applies to
the boxed beef trade which becomes mandatory. They ran a
simulation of Wednesday's boxed beef report that came out. In
that simulation by applying the 360 Rule, which takes effect
April 2, 40 percent of the items that were reported on
Wednesday will no longer be eligible to be reported because of
the 360 Rule. This is just ludicrous that this has occurred. We
certainly need your input and Chairman Lugar and Senator
Grassley and the rest of the Iowa delegation to see what they
can do to correct the situation. It is coming up here very
fast. I have submitted written copies for you to see more
detail, but I just wanted to summarize it.
Senator Harkin. Again, I can assure you, Carl, this is
something that has not gone unnoticed. I know about it. My
staff knows about it. You are right. We have got to get to the
department and get that rule changed quickly.
Mr. Tigner. My name is Ron Tigner. I am from Fort Dodge,
Iowa. I used to milk cows with my dad until milk prices hit
about $11 a hundred weight. Now they are about 850. I am sure
there is going to be lots of farmers going out of business here
soon. In fact, some of the big corporates are hurting bad too.
My comments are--I was not going to talk about this at
first, but I will now, about the pork checkoff, because you
talked about it. A 5-year period between referendums is much
too long a period. The corporate integrators are going to put
people into contracts, and they are going to put the
independents out of business till they get it to a point where
they will have the checkoff referendum in their favor, what the
vote is. They are going to limit the number of people who are
going to be eligible to a small timeframe, which they did in
the pork checkoff. It has got to happen within a few years
between timeframes. A 3-year timeframe for the pork checkoff is
going to be too long. 2003 is going to be way too long. They
are going to work their tails off to make sure independents
cannot vote in it.
Now, my overall comments that I had thinking of coming in
here were in asking the question of what new directions we need
in Federal farm policies. It seems to me we need to go to the
beginning. By this I mean in 1908 a national commission decided
that resources, people, money and so on need to be moved from
rural areas to urban areas. Prior to those years we had always
seen in the United States an increase in the number of farmers.
Since then for every year there has been a steady decline. In
the 1950's our own government studies said those trends should
continue. Even the best known farm organization in the United
States's national president said that should continue. We all
know that our philosophy is we need the lowest cost of
production for food and the fewest farmers farming as possible.
That is our national policy, and it continues today.
I do not feel we will improve farm communities and bring
back more farmers until we have a new national philosophy, a
new national policy that says we need more people farming and
fair market prices. We need an affordable food policy and a
sustainable agriculture and rural community policy. We need to
ditch the old philosophy.
We also need a moratorium on mergers and acquisitions in
the food sector and vigorous enforcement of the packers and
stockyards act with improvement in antitrust legislation to
reflect its impact on farmers, not just consumers and not
just----
Mr. Tigner [continuing.] Not just when it reaches some high
threshold of monopolization, rather when the effect in the
marketplace by a combination of factors is the same as a
monopoly. Thank you, Senator Harkin.
Senator Harkin. Thank you. I appreciate it. One more.
Mr. Bierman. Thank you, Senator Harkin. I am Tim Bierman
from Larrabee, Iowa, farmer, pork producer, also on the board
for the Iowa Pork Producers Association. I wanted to talk to
you about two things. One of them is last year you appropriated
nine million for the funding of the National Disease Center and
National Veterinary Services. We need to continue in that so
that Iowa State and the USDA facilities can move forward. In
lieu of that, as we all know, the European union over there has
foot and mouth disease. We need to be more concerned about the
foreign animal disease coming into this country, so we need to
increase our surveillance. We know there is an increased
regulation of producers using human waste products in this
country because we know they are coming in on ships and planes
and other things. It can come in on those--foot-and-mouth
disease can come in on those ships and whatever. This year if
it comes into the United States, it will not matter if we have
a checkoff because we will not have any hogs to be raising in
this country. We will be slaughtering them like the European
union. It moves on to the cattle. Then it will affect the grain
farmers because how much grain do we eat up? This ought to be
No. 1 and then to make sure we survive. We can live if we can
keep that out of this country. Thank you.
Senator Harkin. Tim, thank you. I am glad you brought that
up. I did not mention this earlier, but I went to the National
Animal Disease Lab yesterday. I watched the disposal of some of
the sheep that was there. It is being done in a very safe
manner, humanely. They are now examining the brain tissues of
the sheep. It just points up again, I think, what is happening
in Europe, the need to rebuild for the next century the
National Animal Disease Center at Ames. Now, again, the price
tag is high. We are looking at about somewhere in the
neighborhood of about $400 million to rebuild it. Keep in mind
Europe is losing over $100,000,000 a day in their losses. It
has already cost Great Britain $5.3 billion. We need a National
Animal Disease Lab that is a actually a world center more than
just a national center. We have the basis for it in Ames, but
it is 40 to 50 years old. They need new equipment. They need
new labs. They need new research components. They need new
disposal facilities. Not only for that, but to fight
bioterrorism and for food safety. We have to be prepared for
this in the future. I am going to do everything I can to ensure
that we rebuild and refurnish that laboratory at Ames. I am
hopeful that--I mean, no one would wish this. With what is
happening now, maybe some of my colleagues now in the Congress
who did not think it was a very high priority item now will see
that this is a high priority item for our country. We need to
rebuild it, so I am glad you brought that up, Tim. It is
something that we cannot continue to put off year after year.
With that unless there is something else from the panel,
you have been very patient and kind to sit there. If there are
any last things that any of you wanted to say before we
adjourn, I would sure----
Mr. Harl. Could I just add one note? Mr. Nolin made a point
about germ plasm in the public domain.
Senator Harkin [continuing.] Yes. You talked about it.
Mr. Harl. I testified before the Senate Agriculture
Committee in October 1999 on that and said we need to fund at
least a half dozen plant science centers at state-of-the-art
levels, and we need to be sure that the results go into the
public domain, not into the hands of the big transgenic hybrid
producers. We are down to five of those on a global basis. We
will be down to three in about 3 years in my view. That is
awesome concentration. We have got to do what Mr. Nolin says.
Senator Harkin. Again, that ought to be part of the
research component of our Farm bill.
Mr. Harl. Exactly.
Senator Harkin. Any help, Neil, you can give us on how to
write that and what to do with it, I need your help on that.
Anybody else? Joan.
Ms. Blundall. If I look at one issue that comes up in
therapy which is rather surprising from rural populations--it
happens over and over again, and I think there is a danger in
it. When a populus believes that they have no shot for
stability, we are at risk. It is not atypical to hear people
talking about concentration in the food industry, about not
having access because we do not have the technology or the
resources. Somehow we have got to build some bridges for
opportunity, and we have got to do something about
concentration.
Senator Harkin. That is just about the proper note to end
on. You are absolutely right. We do have to do something about
concentration, and we are going to focus on that. The hour is
getting late. You have all been very patient to be here. This
has been a great hearing. I have gotten a lot of good
information. I can assure you that the suggestions and advice,
consultation that I got here today will be part of the record.
We will continue to have hearings here in Iowa as we go through
this year to develop the next Farm bill. I take to heart
everything that I have heard here today. This is just vital to
our survival. I take to heart what Phil said from the Iowa Farm
Bureau, that this has got to be more than just commodities. You
got to look at credit, and you got to look at everything. You
got to look at rural development, all these things. You have
got to look at all this stuff. We are going to keep that
together in the Farm bill I can assure you.
Thank you all very much. The hearing will be adjourned.
[Whereupon, at 3:50 p.m., the committee was adjourned.]
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A P P E N D I X
March 24, 2001
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March 24, 2001
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