[Senate Hearing 107-652]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 107-652
 
                       THE NEW FEDERAL FARM BILL
=======================================================================

                                HEARING

                               before the

                       COMMITTEE ON AGRICULTURE,
                        NUTRITION, AND FORESTRY

                          UNITED STATES SENATE


                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION


                               __________

                             JUNE 28, 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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           COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY



                       TOM HARKIN, Iowa, Chairman

PATRICK J. LEAHY, Vermont            RICHARD G. LUGAR, Indiana
KENT CONRAD, North Dakota            JESSE HELMS, North Carolina
THOMAS A. DASCHLE, South Dakota      THAD COCHRAN, Mississippi
MAX BAUCUS, Montana                  MITCH McCONNELL, Kentucky
BLANCHE L. LINCOLN, Arkansas         PAT ROBERTS, Kansas
ZELL MILLER, Georgia                 PETER G. FITZGERALD, Illinois
DEBBIE A. STABENOW, Michigan         CRAIG THOMAS, Wyoming
BEN NELSON, Nebraska                 WAYNE ALLARD, Colorado
MARK DAYTON, Minnesota               TIM HUTCHINSON, Arkansas
PAUL DAVID WELLSTONE, Minnesota      MICHEAL D. CRAPO, Idaho

              Mark Halverson, Staff Director/Chief Counsel

            David L. Johnson, Chief Counsel for the Minority

                      Robert E. Sturm, Chief Clerk

              Keith Luse, Staff Director for the Minority

                                  (ii)







                            C O N T E N T S

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                                                                   Page

Hearing(s):

The New Federal Farm Bill........................................    01

                              ----------                              

                        Thursday, June 28, 2001
                    STATEMENTS PRESENTED BY SENATORS

Harkin, Hon. Tom, a U.S. Senator from Iowa, Chairman, Committee 
  on Agriculture, Nutrition, and Forestry........................    01
Lugar, Hon. Richard G., a U.S. Senator from Indiana, Ranking 
  Member, Committee on Agriculture, Nutrition, and Forestry......    04
Allard, Hon. Wayne, a U.S. Senator from Colorado.................    12
Baucus, Hon. Max, a U.S. Senator from Montana....................    07
Conrad, Hon. Kent, a U.S. Senator from North Dakota..............    05
Crapo, Hon. Michael D., a U.S. Senator from Idaho................    14
Dayton, Hon. Mark, a U.S. Senator from Minnesota.................    20
Fitzgerald, Hon. Peter G., a U.S. Senator from Illinois..........    24
Hutchinson, Hon. Tim, a U.S. Senator from Arkansas...............    08
Leahy, Hon. Patrick J., a U.S. Senator from Vermont..............    10
Lincoln, Hon. Blanche L., a U.S. Senator from Arkansas...........    35
Miller, Hon. Zell B., a U.S. Senator from Georgia................    13
Nelson, Hon. Ben, a U.S. Senator from Nebraska...................    37
Roberts, Hon. Pat, a U.S. Senator from Kansas....................    16
Stabenow, Hon. Debbie A., a U.S. Senator from Michigan...........    15
Thomas, Hon. Craig, a U.S. Senator from Wyoming..................    06
                              ----------                              

                               WITNESSES

Carter, David E., Secretary-Treasurer, Mountain View Harvest 
  Cooperative, Longmont, Colorado................................    41
Cox, Craig, Executive Vice President, Soil and Water Conservation 
  Society, Ankeny, Iowa..........................................    29
Daly, Sharon, Vice President for Social Policy, Catholic 
  Charities, 
  USA, Alexandria, Virginia......................................    38
Fluharty, Charles W., Director, Rural Policy Research Institute, 
  Columbia, Missouri.............................................    27
Glenn, Barbara P., Member, Board of Directors, National Coalition 
  for Food and Agricultural Research, and Executive Vice 
  President, Federation of Animal Science Societies, Bethesda, 
  Maryland.......................................................    33
Learner, Howard A., Executive Director, Environmental Law and 
  Policy 
  Center of the Midwest, Chicago Illinois........................    31
Stallman, Bob, President, American Farm Bureau Federation, 
  Washington, DC.................................................    25
Swenson, Leland, President, National Farmers Union, Washington, 
  DC.............................................................    21
                              ----------                              

                                APPENDIX

Prepared Statements:
    Lugar, Hon. Richard G........................................    54
    Crapo, Hon. Michael D........................................    59
    Dayton, Hon. Mark............................................    64
    Fitzgerald, Hon. Peter G.....................................    73
    Lincoln, Hon. Blanche L......................................    75
    Miller, Hon. Zell B..........................................    55
    Stabenow, Hon. Debbie A......................................    62
    Carter, David E..............................................   205
    Cox, Craig...................................................   163
    Daly, Sharon.................................................   199
    Fluharty, Charles W..........................................   151
    Glenn, Barbara P.............................................   180
    Learner, Howard A............................................   174
    Stallman, Bob................................................   130
    Swenson, Leland..............................................    78
Document(s) Submitted for the Record:
    Daschle, Hon. Tom............................................   210
    The American Dietetic Association............................   230
    California Association of Winegrape Growers..................   241
    Children's Defense Fund: Food Stamp Program..................   234
    EIR News Service, prepared by Robert L. Baker and Marcia M. 
      Baker......................................................   211
    Graves, David, National Council of Farmer Cooperatives.......   244
    Heissenbuttel, John, Vice President for Forestry and Wood 
      Products...................................................   218

Questions and Answers:
    Questions for Craig Cox......................................   253
                              ----------                              



                       THE NEW FEDERAL FARM BILL

                              ----------                              


                        THURSDAY, JUNE 28, 2001

                                       U.S. Senate,
          Committee on Agriculture, Nutrition and Forestry,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:05 a.m., in 
room SD-106, Dirksen Senate Office Building, Hon. Tom Harkin, 
[Chairman of the Committee], presiding.
    Present or Submitting a Statement: Senators Harkin, Leahy, 
Wellstone, Conrad, Baucus, Lincoln, Miller, Stabenow, Dayton, 
Nelson, Lugar, Roberts, Fitzgerald, Hutchinson, Allard, Thomas, 
and Crapo.

    STATEMENT OF HON. TOM HARKIN, A U.S. SENATOR FROM IOWA, 
              CHAIRMAN, COMMITTEE ON AGRICULTURE, 
                    NUTRITION, AND FORESTRY

    The Chairman. The Committee on Agriculture, Nutrition and 
Forestry of the U.S. Senate will come to order.
    I would first like to take this opportunity to welcome my 
colleagues, as well as our witnesses and members of the 
audience, to the first hearing in this committee on the 2002 
Farm bill, basically, as we move ahead to structure it.
    In particular, I want to thank Senator Lugar for his 
courtesy and consideration during the time that he served as 
chairman. I just want you to know, Senator Lugar, I look 
forward to continuing the same type of cooperative working 
relationship that we have thus far had. I want to thank you for 
your leadership, and I look forward to more of your leadership 
on this committee as we work together in this endeavor on a new 
farm bill.
    What I would like to do is proceed. I will make a short 
opening statement and then I would yield to Senator Lugar, and 
then we will just go back and forth for opening statements from 
Senators, hopefully to keep them at least under 10 minutes. I 
will try to keep mine under 10 minutes, and then we will go to 
our first panel. I know we have two votes at 9:45, so we will 
take a short recess from around 9:45 until about 10:00. Then we 
will come back and complete the hearing.
    As we work to formulate and draft a new farm bill, we must 
keep in mind that it is one of the most important pieces of 
legislation that Congress deals with. The Farm bill is, of 
course, critically important to farm and ranch families, but 
also to the well-being of all Americans, whether they are rural 
or urban areas. The bill covers a wide range of topics, from 
farm programs, to conservation, agricultural trade, research, 
nutrition and rural economic development.
    Today's hearing is part of what will be a busy schedule of 
hearings over the next several weeks. In these hearings, we 
will have an opportunity to cover in more depth the many issues 
in the various parts of a comprehensive farm bill. Because the 
Farm bill is so important to all of our Nation, we need a 
comprehensive farm bill.
    Some of us on the committee have been through a number of 
farm bills; others may yet have to endure their first. During 
my career in Congress, I have been involved in the writing of 
five farm bills, starting with the 1977 bill, the 1981 Farm 
bill, the 1985, 1990, and 1996. In many ways, the fundamental 
challenges and problems are similar from year to year, but our 
understanding and our approaches change over time.
    We must keep in mind that our responsibility is to write a 
farm bill that will look ahead rather than try to fix the 
problems or settle the issues of the past. Without a doubt, the 
new Farm bill must recognize 21st century realities and the 
fact that we live in an increasingly competitive global food 
and agricultural system. However, at the same time I believe we 
are also seeing around the world a deepening appreciation of 
the value of farms and ranches and local communities, and the 
critical need to promote their survival and prosperity.
    Fundamentally, we must seek to help agricultural producers 
earn a better return and a better return of the consumer dollar 
in the market. That applies to corn, soybean, wheat, cotton and 
rice producers, just as it does to pork, beef, dairy, poultry 
or specialty crop producers. We must help rural communities 
share in the economic growth, job creation and prosperity that 
our Nation in general has enjoyed over the years.
    In short, we need to keep what has worked in past farm 
bills, including the last one, and improve what has not worked. 
The planting flexibility and increased support for conservation 
in the last Farm bill were successes. The bill's income 
enhancement was not, so we need to improve the system of farm 
income enhancement, I believe, in the next Farm bill.
    To be sure, the large amounts of cash assistance to 
agriculture in recent years have been critical to the survival 
of thousands of farms and ranches across our country. I, along 
with others, have worked hard to obtain that assistance in the 
appropriations bills. Yet, we all know that this heavy reliance 
on Government payments is not a healthy or sustainable 
agricultural policy into the future. Again, we must look to 
creating opportunities and hope for the future, not just a 
continuation of the status quo.
    One of the greatest contributions to our society by farmers 
and ranchers is their age-old stewardship of our natural 
resources. As we formulate new farm policies for the 21st 
century, conservation should be a crucial part of our work. We 
must start, I believe, by adequately funding and strengthening 
our existing USDA conservation programs. I believe we can do 
more.
    We have before us bipartisan legislation, the Conservation 
Security Act, to support conservation on lands that are in 
agricultural production. The bill would do so through a totally 
voluntary program of incentive payments for conservation 
practices. The more conservation applied to the land, the 
higher the payments. The program is very flexible and suited to 
individual farms and ranches and local priorities. It is not 
top-down or one-size-fits-all. Since it is not based on price 
or production, it falls within the WTO ``green box'' as not 
being trade-distorting. Finally, this legislation helps all 
regions of the country and all types of producers, including 
growers of fruits and vegetables and specialty crops.
    On another topic, we have only scratched the surface of 
developing farm-based sources of renewable energy--ethanol, 
bio-diesel, biomass, wind, methane, hydrogen. Agriculture in 
this century should be more than just about food and fiber. 
Anything we can produce from a barrel of oil, we can produce on 
our farms. We do not have to drill for oil in environmentally 
pristine areas, nor do we have to be at the mercy of foreign 
oil producers.
    The potential is huge all around the country: ethanol from 
grains or biomass of various sorts and kinds; bio-diesel from 
soybeans or any kind of oilseeds, or even from animal 
byproducts. I know that we hear the arguments that renewable 
fuels are too expensive, but I maintain they are not too 
expensive when we consider all the extra costs of our 
dependence on fossil fuels, including military costs of 
protecting foreign oil and the environmental costs of using 
fossil fuels.
    A sound farm economy is essential to healthy rural 
communities, but it is not in and of itself sufficient. We also 
need to include in the next Farm bill policies that will help 
to improve economic opportunities and the quality of life in 
rural communities. We must honestly face the fact that farm 
families are relying more and more on off-farm income. We must 
help communities obtain the basic amenities--water, waste 
water, transportation, health care, education, 
telecommunications. In addition, we should help them gain 
access to the capital, the know-how and the markets that will 
promote economic growth and new jobs. I see tremendous 
potential for local and farmer-owned value-added businesses if 
they receive the help they need to get up and running.
    Finally, our committee cannot neglect its responsibility to 
fight hunger and malnutrition in our country and elsewhere in 
the world. We must ensure we have a solid system of food 
assistance in the U.S., and we should do more in developing 
countries. In particular, I hope that we will soon pass the 
McGovern-Dole legislation to create an international school 
nutrition program.
    These are, I believe, the highlights of the components of a 
new farm bill. The specifics of the various commodities and 
other programs, such as dairy and crop insurance and others, 
will have to be dealt with and integrated into this bill. We 
have a lot of work to do.
    We are fortunate to have on this committee, on both sides 
of the aisle, Senators with a deep understanding of and support 
for agriculture, our farm families and rural America. I am 
proud to serve with each of you and look forward to the task 
ahead.
    With that, I will yield to my distinguished ranking member 
and my good friend, Senator Lugar.

 STATEMENT OF HON. RICHARD LUGAR, A U.S. SENATOR FROM INDIANA, 
                 RANKING MEMBER, COMMITTEE ON 
              AGRICULTURE, NUTRITION, AND FORESTRY

    Senator Lugar. Thank you, Mr. Chairman. I simply want to 
start by congratulating you again on your assumption of the 
chairmanship. I appreciate the fact that our staffs have worked 
well in coordinating any transitions that were required, and I 
would just make that assurance to all of our friends from farm 
country today that the need for bipartisan cooperation as we 
try to do this complex farm bill is imperative. You certainly 
will have our support and I congratulate you on your statement.
    I would mention, as the chairman knows, that we had a 
running start on the Farm bill with our hearings, in which the 
chairman and members vigorously participated, on the credit, 
research, trade and conservation titles. The Farm bill will 
probably include titles that are dedicated to each of those 
topics and others, as staffs have been working on that.
    I look forward to working with you on a comprehensive farm 
bill which I hope we will be able to enact swiftly that ensures 
the full opportunity for the farmers that you have mentioned, 
and likewise allows farmers, ranchers, consumers and taxpayers 
to be heard during these hearings.
    Mr. Chairman, while our domestic markets and commodity 
programs are extremely important and must be reviewed and 
revised, foreign markets are vital to the health and viability 
of United States agriculture. I would suggest that any final 
farm bill legislation could be overshadowed in significance by 
the ultimate congressional decision on trade promotion activity 
either way. The foreign markets expand and our prosperity 
increases. Likewise, when the foreign markets contract, we have 
supplies up around our necks.
    It is critical that trade promotion authority be our 
highest trade and foreign policy priority, at least in terms of 
agriculture in this country. Ninety-five percent of the world's 
consumers of food and fiber live outside of our borders, and 
the viability of United States agriculture depends on our 
ability to have access to those markets.
    Although some trade bills have been enacted without trade 
promotion authority, negotiating trade agreements with other 
countries is not only more difficult and more uncertain; it may 
be in the current context virtually impossible without trade 
promotion authority. Other countries will engage in serious 
discussions only if they know that the Congress will not 
second-guess and amend, thus opening up the agreements to 
second-guessing and amendment by every other legislature around 
the world.
    Agriculture is two-and-one-half times more reliant on trade 
than the rest of our economy. Ag exports create and sustain 
hundreds of thousands of American jobs and income in the non-
farm sector. To illustrate the importance of ag exports, I 
would ask that USDA ag export facts and information on other 
sector exports for each State represented on this committee for 
the 106th and 107th Congress be entered into the record. Such 
statistics are available and, Mr. Chairman, for the record I 
will submit all of that so we will have it as part of the 
record.
    Senator Lugar. I hope my colleagues will reflect on those 
figures in terms of product moved overseas and jobs created. 
For example, in my home State of Indiana 22,000 jobs are tied 
to ag exports, and those exports account for 32 percent of all 
of our agricultural production. One-third has to be moved 
somewhere else outside Indiana and the United States.
    In Iowa, 48,000 jobs are tied to exports, and they account 
for one-third of the agricultural production in that State. 
12,600 jobs in Colorado and 33,400 jobs in Minnesota are in the 
category of being supported by ag exports. They are serious 
figures which underscore my conviction that this Congress must 
act on trade promotion authority now rather than later.
    I thank you again, Mr. Chairman, for calling this timely 
hearing with a comprehensive set of witnesses today and we look 
forward to each of the ensuing opportunities.
    Thank you.
    [The prepared statement of Senator Lugar can be found in 
the appendix on page 54.]
    The Chairman. Thank you very much, Senator Lugar, and again 
I want to thank you for your great leadership and look forward 
to working with you. You are right; this has to be a bipartisan 
approach. It has been in the past and I am certain it will be 
again this year.
    Now, I would like to turn to the Senator from North Dakota, 
Senator Kent Conrad.

STATEMENT OF HON. KENT CONRAD, A U.S. SENATOR FROM NORTH DAKOTA

    Senator Conrad. Thank you, Mr. Chairman, and I too want to 
add my words of congratulations to you as you take on the 
chairmanship of this important committee at this critically 
important time.
    I also want to congratulate you for the swiftness of the 
action and the leadership you have provided. We don't even have 
an organizing resolution yet in the U.S. Senate, but already 
you have an organized the first hearing with an outstanding 
panel of witness. It is very clear that your leadership is 
being expressed and you are moving rapidly, and I am just 
delighted, Mr. Chairman. Thank you.
    Also, I want to thank you for your statement because you 
have put the emphasis right where it belongs. What are we going 
to do for the future to strengthen farm income for families all 
across our country? We can look to the past and we can talk 
about a failed farm policy. Clearly, it has failed. We have had 
to write disaster bills each of the last three years, economic 
disaster bills, because of a disastrous farm policy. There are 
parts of that policy that are good. It is good to have 
flexibility to plant for the market rather than a farm program. 
That is something we ought to retain in a new farm policy.
    I also think you have properly put a focus on conservation 
because as we look at this world trading system, it is going to 
be critically important that we have programs that are in the 
so-called ``green box,'' and you have correctly identified the 
opportunity to do that in this Farm bill.
    I have a few charts here to illustrate some basic facts. 
While farmers pay more for everything they buy, they are 
receiving less. The green line is what farmers are paying for 
inputs, and that has gone up, up, up, and with the latest 
energy price shock it has become even more serious.
    On the other hand, the red line shows what prices farmers 
have received for the goods that they sell. It is interesting 
that the peak was when the last farm bill was written. Since 
then, it has been almost a straight line down, and that 
tremendous chasm between the prices that farmers receive and 
the prices that they pay has created the farm crisis.
    Mr. Chairman, the other thing we have to be ever mindful of 
as we write this Farm bill is our competitive position in the 
world, because our major competitors, the Europeans, are far 
out-stripping us in support for their producers. This shows, 
according to the Organization for Economic Cooperation and 
Development, who are the international scorekeepers, that on 
average the Europeans are providing $313 an acre of support, 
while we provide $38 an acre.
    I want to show a chart on what they are doing on export 
support because the picture is the same. Europe is the blue 
part of this pie and they account for 84 percent of all world 
agricultural export subsidy--84 percent. We in the United 
States account for that thin sliver there in red, 2.7 percent. 
They are out-spending us 30 to 1. This is not a level playing 
field. It is no wonder that our farmers are facing hard times, 
and it is imperative that we fight back and this hearing is the 
beginning.
    Again, I want to congratulate you, Mr. Chairman, and thank 
the ranking member as well because he has given us a running 
start by holding hearings. You have followed up swiftly and in 
an important way, and we appreciate the leadership the two of 
you provide, and again especially you, Mr. Chairman, for your 
actions here today.
    The Chairman. Thank you very much, Senator Conrad, and I 
just want to reciprocate in kind by congratulating you on your 
chairmanship of the Budget Committee and for ringing the alarms 
and letting us know the problems that we are confronting down 
the pike and why we have got to move on this Farm bill rapidly 
and expeditiously to make sure that we are able to enact the 
policies that will increase farm income within the confines of 
that budget. I personally want to thank you for alerting 
everyone as to what we have to do. I really appreciate that.
    Next, I would go to Senator Thomas.

  STATEMENT OF HON. CRAIG THOMAS, A U.S. SENATOR FROM WYOMING

    Senator Thomas. Thank you, Mr. Chairman. I am pleased to be 
able to be here today. All of you have talked about the number 
of times you have been through this. I have been involved in 
agriculture all my life, but it is the first time I have been 
involved in this committee with respect to the Farm bill, so it 
is an interesting experience for me.
    I notice in the announcement for the meeting and some of 
the statements talking about the next Farm bill. Of course, 
that is specifically what we will be doing, but I hope that is 
not where we focus entirely. You all have mentioned it, but it 
seems to me our real challenge is to look forward in the future 
as to what we want agriculture to be, and then this Farm bill 
ought to move us toward that direction.
    We have gotten, it seems to me, again from outside the 
committee, totally involved in the local and immediate 
questions which obviously have to be answered, mostly on 
payments and money, and so on, instead of looking at where we 
want agriculture to be 10 years from now, 20 years from now. I 
hope each of you will take a look at that and talk about where 
we need to be.
    I personally hope, of course, we can move to more of a 
market-based system. Most people agree to that. It is a 
difficult thing to do. We have tried to do that. There are 
other obstacles, in addition to the Farm bill. They have to do 
with tax burdens and environmental restrictions and market 
concentration and trade barriers, and all those kinds of 
things.
    I will submit my statement, Mr. Chairman. I don't want to 
take long, but I just want to emphasize again that we have to 
have a vision of where we want to be so that what we do here 
contributes to attainment of that vision. Otherwise, we will be 
back here next year looking at the same thing in short term and 
talking mostly about which programs we are going to fund and 
how you distribute the available money, which is an important 
element. I understand that, but it doesn't move us toward where 
we want to be over time.
    I appreciate the opportunity. Thank you, sir.
    The Chairman. Senator Thomas, thank you for your statement, 
and I would just say I couldn't agree with you more.
    I turn now to my good friend, the Senator from Montana, 
Senator Baucus.

   STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR FROM MONTANA

    Senator Baucus. Thank you, Mr. Chairman. I deeply 
appreciate your calling this hearing. It is desperately needed. 
I will submit my statement for the record.
    It is stating the obvious when I say this is a very 
difficult challenge ahead of us, and it is ironic that some 
peoples in the world are starving even though there is a glut 
of commodities in the world, and it is tragic. The cause for 
that disparity is really much more political than anything 
else; that is, it is the politics in the local areas that 
prevents food from getting to the people who need it.
    When the United States and other countries give aid, it is 
the warring factions in the particular part of the world that 
prevent the food from getting to the people. Yet, we in the 
United States produce so much food. Something is not right.
    Now, on our end of this, our producers, too, even though we 
produce so much, clearly are not getting a fair return. The 
problem has been getting worse over time, not better, with 
costs going up and prices in real terms, at least in wheat, 
essentially declining.
    Clearly, a farm bill can help address the problem, and 
clearly we have to revisit Freedom to Farm.
    We can do a lot in a farm bill. We can do a lot in the Farm 
bill, and we must. A safety net must be provided, stability, 
predictability, better assured. We must also recognize that 
much of our work has to do with international arena. Senator 
Conrad did an excellent job, and has many times demonstrated 
the degree to which other countries subsidize their production 
much, much more than do we, and particularly the European Union 
in its subsidies of exports much more than do we in the United 
States.
    There is another WTO round, and it is in services and it is 
also in agriculture. We know the challenge. It is huge, and we 
must find leverage, frankly, if we are going to get any results 
in the next round. That is a large part of it and it requires a 
lot of new thinking, too. The world is changing so 
dramatically.
    You know, it is interesting. Often, Pentagons and defense 
establishments get ready for the last war, and when we write a 
farm bill, we can't write a farm bill for the last farm war, 
the last set of problems that we were facing at the time. We 
have to look much more in the future and be very honest about 
what is happening to production agriculture and what is 
happening in the world.
    I don't know the answer. I only ask all of us, and I know 
all of us, including all the groups, will dig down even more 
deeply and more creatively, and maybe on some pilot project 
basis try something new, try something different. We have no 
choice; we have to, because the trend that we have been 
experiencing is on the decline. If we write another farm bill 
basically under the same old ways, my guess is this trend is 
going to continue. That is the way we have been doing things.
    I would just say to all of us we have a great opportunity 
here. It is an awesome challenge, and I ask all of us to step 
up to the plate and come up with some really significant, 
honest solutions. It is not going to solve the whole problem, 
but at least it will be a good start.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Baucus.
    Senator Hutchinson.

 STATEMENT OF HON. TIM HUTCHINSON, A U.S. SENATOR FROM ARKANSAS

    Senator Hutchinson. Thank you, Mr. Chairman, and let me 
join my colleagues in expressing my appreciation for your 
calling this hearing and for moving ahead with rewriting of the 
Farm bill.
    That is the number question I receive in farm country, in 
Arkansas. I was in the delta this past weekend and the question 
was, when are you going to write the Farm bill? Are you going 
to get it done this year, next year? What is it going to look 
like. I very much appreciate you moving even before we get that 
reorganization resolution completed.
    I also appreciate, Mr. Chairman, your leadership on the 
whole issue of conservation incentives for land that is in 
production. While we must continue our efforts on WRP and CRP, 
your leadership and others' who are very concerned that we 
provide those incentives for conservation for that land that is 
in production is very worthwhile. I commend you for that and 
look forward to working with you on that.
    I also appreciate your comments regarding the potential of 
bio-diesel. I have been pleased to work with Senator Dayton on 
that issue in introducing legislation to try to provide 
incentives similar to the ethanol program for bio-diesel, and I 
look forward to working with you in seeing that as part of this 
new farm bill.
    Senator Lugar's comments regarding the importance of 
exports and doing more in the area of trade are essential as 
well. As I look at the State of Arkansas, I don't know exactly 
where we would rank in population, but we are 11th in the 
Nation in agricultural exports. The future of agriculture in 
Arkansas is directly related to what we can do in increasing 
export markets. Senator Conrad emphasized that as well, and 
that is very important.
    Senator Conrad also accurately pointed out, and I want to 
underscore, the plight of farmers today. With commodity prices 
as low in many areas as they have been since the 1930's, and 
with costs of production at record highs and being exacerbated 
by fuel costs today, farmers are hurting. They are certainly 
hurting in the State of Arkansas. Many have either given up 
their land or are farming up what is left of their assets in 
order to stay in business, and that is not a viable situation.
    The other question I get asked all the time is are we going 
to get the second AMTA payment out. I hope that the Congress 
will move expeditiously on getting an AMTA payment out at the 
1999 level.
    We need to get a farm bill written to establish certainty, 
stability and predictability. The ad hoc, 1-year-at-a-time 
emergency bills is no way to run a farm program. I join my 
colleagues in that estimation, in that very strong feeling.
    I commend you again for the hearing today and for moving 
ahead with the writing of a new farm bill. Thank you.
    The Chairman. Thank you very much, Senator Hutchinson. I 
look forward to working with you, especially on that bio-diesel 
issue.
    It will be the Chair's intention that in all hearings that 
I chair we will recognize Senators in the order in which they 
appear, except for perhaps today, and with two other 
exceptions, of course, that the Chair will recognize whenever 
they arrive the two Chairmen Emeritus of this committee, both 
the ranking member and Senator Leahy.
    This has got to be another one of these firsts. This has 
got to be the first time that a chairman of a full committee 
sits between two former chairmen of a committee, one on either 
side of me. I don't think that has ever happened before here, 
but I am pleased and honored to sit here.
    With that, I would recognize the former, before Senator 
Lugar, chairman of the Senate Agriculture Committee who led us 
greatly in those years, in the late 1980's and early 1990's, 
and who has been on the Agriculture Committee longer than maybe 
anyone here, if I am not mistaken.
    Senator Leahy. Except Senator Helms.
    The Chairman. Except Senator Helms. Senator Helms has been 
here longer than Senator Leahy.
    With that, I recognize my good friend from Vermont, Senator 
Patrick Leahy.

STATEMENT OF HON. PATRICK J. LEAHY, A U.S. SENATOR FROM VERMONT

    Senator Leahy. Thank you, Mr. Chairman. I must say that one 
of the great delights of being on this committee is having 
served with both you and Senator Lugar. You are two of my best 
friends in the Senate and it has been good that way.
    I might point out to some of the new members, when I first 
came on here, there was a long, straight table back in the 
Russell Building. I am the very last person down there, and 
Senator Talmadge and Senator Eastland puffing on huge cigars up 
at the front. Senator Eastland brings up an amendment about 
this thick, and Senator Talmadge says, well, then, without 
objection, it is accepted.
    This was about my first meeting and I said, excuse me, 
could I just ask what is in the amendment? The two cigars come 
down and they look way down and they kind of say who is he? 
Talmadge looks at me and he just raps the gavel and he says we 
are adjourned.
    [Laughter.]
    Senator Leahy. Hubert Humphrey turned to me and he said--
and, Mark, you will appreciate this--Hubert Humphrey turns to 
me and he says, now you understand what is in it. That was it.
    [Laughter.]
    Senator Leahy. I don't want to speak substantively. The 
Farm bill should be completed this year because I don't believe 
funding can be available next year, and we run that real risk. 
The Farm bill has to be comprehensive and national and fair to 
farmers in all regions, and fair to all families living in 
rural areas, not just farmers and ranchers.
    ``Comprehensive'' means the Farm bill has to more evenly 
provide benefits for those living in rural areas and protect 
consumers in urban areas. ``Comprehensive'' means it does more 
than just transfer billions of dollars from taxpayers to 
certain farmers in limited areas growing certain types of 
crops. It should enhance farm land protection, conservation, 
small farm assistance, nutrition, and so on, and ensure the 
safety of our food supply, the quality of the water our 
children drink, the ability of our farm and ranch lands to act 
as carbon sinks. It should enhance the bargaining position of 
our farmers, who too often are given a ``take or leave it'' 
view on prices.
    The AMTA payments today concentrate the bulk of Federal 
assistance in the Midwestern States, leaving vast regions of 
the country with little assistance. Yet, the farmers in those 
other regions also work hard. They produce their share of 
America's abundance. They have families to support. Farmers in 
the Northeast and Mid-Atlantic States, in particular, have been 
effectively shut out of AMTA assistance.
    In the crop insurance bill, I have been working with a 
coalition of States and more than 20 Senators. We have 
informally become known as the Eggplant Caucus. That comes from 
one of our Mid-Atlantic States. The number one specialty crop 
export in New Jersey is eggplant.
    Let me put a chart up here just for a moment. The chart 
shows how the $5.5 billion in fiscal year 2001 ag economic 
assistance funds, funds being decided by this committee right 
now, would be allocated under current AMTA payments.
    The darkest red area shows counties who receive more than 
$100 million in AMTA payments, and you can see where that is 
concentrated right in the center of the country. The light pink 
counties, such as those in the Northeast and Mid-Atlantic, are 
going to get less than half a million. Based on the AMTA 
formula, farmers from the dark red counties in the Midwest will 
receive 1,000 percent more than, for example, the farmers in my 
own State.
    Now, the bottom shows what should be happening. Federal 
assistance payments should be distributed according to the 
value of agricultural products. If you do that, you notice that 
the map changes dramatically and it more accurately reflects 
where products are coming from. That is what we should do in 
constructing the $5.5 billion package for fiscal year 2001 and 
for the 2001 Farm bill.
    You have got the cost-shared EQIP program that helps 
farmers invest in their surrounding environment and protects 
their water supplies. In Vermont alone, EQIP is oversubscribed 
by more than 5 to 1. That we have to talk about the $3.7 
billion backlog we have in environmental conservation programs 
and the farm land protection program so families can hold on to 
their property. We should support the new, visionary 
conservation initiative developed by Senator Harkin, the 
conservation security bill.
    We need a strong nutrition component. We can't be talking 
about lowering WIC payments at a time when our economy may be 
slowing down, because after all the newly born child doesn't 
really have too much to say about how the economy goes, but we 
could have a great deal to say about how he or she eats or what 
kind of nutrition the child's pregnant mother has during the 
pregnancy.
    These are things to look at, and I will do more for the 
record, Mr. Chairman, but I wish everybody would look at that 
map because today, as I said, the heaviest concentration--is 
that North Dakota?
    [Laughter.]
    Senator Leahy. I read in the paper that they want to change 
the name just to ``Dakota,'' Fort Knox, Dakota, up there.
    Senator Conrad. We kind of like this first map.
    [Laughter.]
    Senator Leahy. I had the feeling you would.
    I wish you would put that up behind Senator Conrad; I 
didn't want him to really see it, especially now that he is 
chairman of the Budget Committee.
    In fairness, take a look at that, and also keep in mind 
that these Mid-Atlantic States and Northeastern States pay a 
very large part of the bill for what is going into these 
Midwestern States. We get very little back. We had one disaster 
bill where we got virtually nothing back, and yet we had to pay 
about 80 percent of our taxes for that.
    We should be looking at something that more evenly 
distributes it. It doesn't hurt the Midwestern States. In fact, 
in a couple of places it will actually improve the formula, but 
it more accurately reflects where we are producing agriculture.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Leahy.
    Senator Allard.

  STATEMENT OF HON. WAYNE ALLARD, A U.S. SENATOR FROM COLORADO

    Senator Allard. Mr. Chairman, I would like to join my 
colleagues in congratulating you on moving forward and becoming 
chairman of the committee, and also on moving ahead with the 
new Federal Farm bill. I appreciate being part of the panel.
    I was a member of the Ag Committee over on the House side, 
and I do think there were a lot of good things in the Freedom 
to Farm bill. I hope that we can use that as a basis as we move 
forward. I do also realize that there are some changes that 
need to be done to take into account safety net issues.
    We need to look carefully at what we can do to expand our 
markets, particularly in the export areas, as Senator Lugar 
mentioned. I also think that we need to look at renewables, 
which you mentioned in your comments. That is one area we can 
look to in order to expand demand and markets for our 
agricultural products. We need to look closely at crop 
insurance and taxes and also regulations on the farmers.
    One area that I want to mention, which others have failed 
to point out in their comments so far has to do with animal 
diseases and plant health. As a veterinarian, you might very 
well expect me to make those comments. That every member of 
this committee has been seeing what has happened in Europe. 
That part of the world has not paid as good attention as they 
probably should to animal disease, and it has had a devastating 
impact on the livestock industry in Europe. The same thing can 
happen with plant diseases.
    I hope that, as we move forward in our deliberations, we 
don't forget the important role that research and labs, such as 
the one at Plum Island, which does this kind of work, as well 
as a lab that you have in your State, in Ames, Iowa play. These 
national laboratories are key in what we are doing, 
particularly as far as animal health is concerned.
    Because of its importance, I will continue to push for an 
emphasis on research and make sure that we are putting in place 
a proper mechanism to protect our plant and animal industries 
from the ravages of disease.
    The Chairman. Thank you, Senator Allard. I am glad you are 
on the committee. You are the first veterinarian since Senator 
Melcher was on the committee.
    Senator Leahy. That is right.
    The Chairman. I believe that is right, and so I can just 
say in my capacity as chairman I will turn to you often for 
advice and consultation on these very crucial issues of animal 
health and animal diseases.
    A lot of people are concerned about what is happening with 
hoof-and-mouth disease, and so-called mad cow disease also. 
There is a great deal of concern about animal safety, and with 
your expertise and background, you can help us sort of weave 
through this as we develop the new farm and I am really glad 
you are here.
    Senator Leahy. Mr. Chairman, do we follow the past 
precedents of all us bringing any sick animals we have to 
markups?
    [Laughter.]
    The Chairman. Now, we turn to our good friend and a new 
member of the committee, the former Governor of the State of 
Georgia, Senator Miller.

   STATEMENT OF HON. ZELL MILLER, A U.S. SENATOR FROM GEORGIA

    Senator Miller. Thank you, Mr. Chairman, and it is a 
pleasure to be with this committee this morning as we take this 
first step in what I know is going to be a long journey.
    I know the minutes are ticking away, but I feel like I must 
respond to Chairman Leahy's comments about Senator Talmadge, my 
fellow Georgian. As one who has experienced that stare over the 
top of his glasses and amidst the cigar smoke, it hit close to 
home.
    In fact, when I went to the first Agriculture Committee 
meeting and there were those grand portraits of yourself and 
Senator Talmadge in the committee room, I wrote Senator 
Talmadge a note and told him that he was still in Washington 
and still looking over my shoulder.
    Senator Leahy. He still votes, too, Zell, I just want you 
to know.
    [Laughter.]
    Senator Miller. I do want to say, Mr. Chairman, before I 
get into talking about some of the different aspects that are 
essential to the new Farm bill that I hope that very soon we 
will begin to move quickly on the supplemental package that our 
colleagues in the House took up last week.
    In past years, this committee has provided relief to 
farmers for economic and natural disasters, and Georgia farmers 
are very grateful for this. This year's economic disasters are 
probably going to outweigh those of past years and it is very 
important that we move forward on that.
    I will submit my statement, but let me just pull out a few 
of the things that I did want to discuss.
    There has been a lot of talk about the need for an adequate 
safety net for farmers in times of price and weather disasters, 
and certainly this is true. I do not believe that the current 
disaster policy over the past few years can continue. No one 
knows what Mother Nature will bring, but our farmers have a 
right to a program that will provide them the security to 
continue their families' farm operation and the comfort of 
knowing how and when the Government will provide some 
assistance.
    I also think it is crucial that we establish commodity 
programs that will provide adequate funds for producers when 
prices are low. I don't think it is fair to punish producers 
with payment limits or caps. Also, with the problems in today's 
agricultural economy, reducing payments from the past levels is 
certainly not the answer. Not every farmer produces the same 
crops, not every farm has the same amount of acreage. Farmers 
want us to provide them flexibility to deal with their 
individual operations.
    Also, Mr. Chairman, there is a strong need, I believe, to 
implement a specialty crop program. Specialty crops are a 
growing industry in my State and all around this country. They 
should be given similar assistance to the major commodity 
programs.
    Conservation certainly should be an important aspect of the 
next Farm bill. Farmers understand this better than anyone how 
critical a healthy environment is to the continuation of 
agriculture and the general health of the community.
    Over the past few years, Mr. Chairman, farmers have been 
hampered by numerous regulatory burdens, and this committee 
should stress to regulatory agencies the requirement that 
judgments should be based on sound science before drastic 
actions are taken against farmers and agricultural industries. 
We must not give in to the shrill minority intend on hurting 
this industry rather than promoting it. Increased funding for 
agricultural research is vital for this Nation to remain the 
leader in agricultural production.
    Finally, we as a Congress should lend a hand, in my 
opinion, to this administration in helping them open new 
trading opportunities. There are many untapped markets out 
there all throughout the world, and I see no reason why the 
United States should not be knocking on those doors and 
providing the goods so many foreign countries need and desire. 
I also remain very firm in my commitment that food and medicine 
should not be used as foreign policy tools.
    Those are just some of the things that I have on my list of 
policy decisions that we will debate in this committee. Mr. 
Chairman, we have a daunting task ahead of us. I am excited 
that we are moving forward in what is a new era in agriculture 
policy, and I look forward to working with you and my 
colleagues.
    [The prepared statement of Senator Miller can be found in 
the appendix on page 55.]
    The Chairman. Thank you very much, Senator Miller, and we 
are delighted to have you on the committee.
    Now, we turn to Senator Crapo, from Idaho.

    STATEMENT OF HON. MIKE CRAPO, A U.S. SENATOR FROM IDAHO

    Senator Crapo. Thank you very much, Mr. Chairman. I also 
appreciate your holding this hearing and your interest in 
moving promptly on a new farm bill.
    Agriculture continues to drive Idaho's economy and, as 
such, Idahoans have a keen interest in having a fair and 
efficient Federal agriculture policy. Producers and processors 
and consumers, not to mention the environment, are all very 
interested in this debate.
    As we all know, farmers are hurting. Input costs have gone 
through the ceiling and prices have dropped through the floor. 
In many cases, the prices in Idaho are below the cost of 
production. I am sure that is true in many other parts of the 
country.
    A choice has to be made as to whether we want to continue 
to support a viable and vibrant domestic agricultural policy in 
this country, and I believe this committee has the opportunity 
to make that choice. A safe, affordable, abundant supply of 
domestic food is vital. The current energy problem serves as a 
warning to what we could face nationwide in our food policy. It 
shows what happens when we are subject to foreign supplies, 
proving that domestic production is a true matter of national 
security.
    America's farmers are the most efficient in the world and 
consistently produce the safest, highest-quality products in 
the world, and our consumers directly reap the benefits of 
American agriculture practices. As we work on this important 
legislation, we must not lose sight of the fact that this is 
not just a farm bill, but it is a national food policy that we 
are developing. Everybody benefits from a vibrant domestic 
agriculture policy.
    To this end, I look forward to working with you and our 
other colleagues on the committee to make sure that we do 
provide an adequate safety net to our producers; that we 
increase the commitment to conservation, and I too have been 
working on a number of conservation items and would like to 
work with you directly on that; to bolster our export promotion 
programs; to continue our commitment to agricultural research; 
and to find innovative ways to address rural development needs.
    As those of us who worked on the 1996 Farm bill know very 
well, the Farm bill alone will not solve all of our problems. 
We also have to continue to pursue tax reform, to address 
unfair regulatory burdens, and move toward free and fair trade. 
Our producers are being handcuffed by unfair competition and 
barriers to exports, and it is time that we stop it.
    Finally, I also want to say that while these long-term 
fixes are vital and a comprehensive bill is needed before the 
next crop year, our producers do need immediate help. Farmers 
are facing greater difficulties than last year and we have to 
provide assistance now. I look forward to working with you and 
my other colleagues to address these needs in our economic 
assistance package as well.
    I will submit the rest of my statement for the record, Mr. 
Chairman, and thank you very much.
    The Chairman. Thank you very much, Senator Crapo, and again 
we are delighted to have you on this committee also from Idaho.
    [The prepared statement of Senator Crapo can be found in 
the appendix on page 59.]
    Now, we turn to Senator Stabenow. I just want you to know 
that I wore my Michigan tie this morning.
    Senator Stabenow. Well, I am very appreciative, Mr. 
Chairman.
    The Chairman. These are Michigan cherries right here.
    Senator Stabenow. That is very good, and we want you to 
remember Michigan cherries, Mr. Chairman.

STATEMENT OF HON. DEBBIE STABENOW, A U.S. SENATOR FROM MICHIGAN

    Senator Stabenow. Thank you for the opportunity to be here 
and, Mr. Chairman, for your leadership in pulling us together.
    I want to first say thank you to former chairman Lugar for 
his leadership in conducting the committee in a bipartisan 
manner, and I know that our current chairman, Chairman Harkin, 
will do the same. This is important to all of us that we 
develop a farm bill that makes sense for American agriculture.
    I would first just say that we all know that our farmers 
are working harder than ever and earning less, and that is not 
in our interest or theirs. I am hopeful that as we move forward 
we will be creating policies to allow that hard work will 
result in strengthening family farms, as well as agriculture, 
in general.
    Mr. Chairman, I will submit my statement for the record. I 
would just indicate that in Michigan we grow a little bit of 
everything. We have a lot of focus on dairy, and when we talk 
about animal disease I will just note that bovine TB is a 
critical issue for us in Michigan.
    We also have a lot of sugar beets, and you have heard me 
talk many times about specialty crops, which will be a focus 
for me in the Farm bill as we proceed to make sure that we are 
keeping an eye toward specialty crops and the unique nature of 
specialty crops in anything we do.
    We are proud to have a premier research institution 
Michigan State University, in Michigan, and obviously research 
is critical. Conservation, in which the chairman has taken such 
tremendous leadership, is very important. Food and nutrition, 
are important and rural development--I am hoping to see us 
expand upon our rural development efforts.
    It is very exciting to be a part of this committee at a 
time when we can focus on an energy title, which will be 
important for agriculture and for the country's energy needs. 
Expanding markets is certainly important as well.
    Overall, I would just indicate that I appreciate the fact 
that we are moving quickly. We need to be thorough, but we also 
understand that it is important to move forward and I 
appreciate the chairman's leadership.
    Thank you.
    [The prepared statement of Senator Stabenow can be found in 
the appendix on page 62.]
    The Chairman. Thank you very much, Senator Stabenow, and we 
are honored and delighted to have you on the committee.
    Senator Roberts, I just said a little bit ago this has got 
to be a first, where I sit between two former chairmen. It has 
also got to be a first, I have got to believe, where a 
committee has three former chairmen of committees sitting on 
it.
    I turn now to my good friend from Kansas, the Chairman 
Emeritus of the House Agriculture Committee and valuable member 
of this Senate Agriculture Committee, one of the three former 
chairmen who sit on this committee, Senator Roberts.

   STATEMENT OF HON. PAT ROBERTS, A U.S. SENATOR FROM KANSAS

    Senator Roberts. Thank you, Mr. Chairman. It is also 
noteworthy that it is a first that I am sitting to your left.
    [Laughter.]
    The Chairman. Do you want to keep it that way?
    Senator Roberts. You never know on agriculture policy.
    The Chairman. That is true.
    Senator Roberts. I was going to start off by repeating some 
names--Bob Pogue, Tom Foley, Kika de la Garza, Bob Smith, Larry 
Combest, somebody named Roberts, Herman Talmadge, Pat leahy, 
Dick Lugar, and now Tom Harkin.
    I want to thank our distinguished former chairman, Senator 
Lugar, for his spirit of cooperation and his bipartisan 
leadership as we tackle the tough problems facing agriculture, 
and the ranking minority member, Senator Harkin, who now has 
the privilege of being chairman.
    It was Kika de la Garza who said that everybody that is 
privileged to serve on the Agriculture Committee, like our 
farmers and ranchers, can feel the ground; there is a special 
purpose, a special calling, a special responsibility.
    Tom, I know you feel that, and my heartfelt congratulations 
to you and I look forward to working with you.
    We certainly have our work cut out for us as we begin the 
task of writing a new farm bill. I have been through six of 
them, as a I counted them up, as a former staffer, a member of 
the House, and now a member of the Senate. My godfathers in 
this business are the Honorable Cliff Hope, Sr., who was a 
Republican chairman of the House Ag Committee a long time ago; 
somebody by the name of Bob Dole; Frank Carlson, a former 
Senator and Governor and Congressman; and Keith Sebelius, who 
was my boss when I was a staffer over on the House side. We 
have a lot of history in regard to agriculture and what we 
believe in in Kansas and how we can be of help.
    As we begin this process, the first thing we need to do is 
to put to bed the myth that a farm bill is only about our 
farmers and ranchers and the commodity title. A farm bill is a 
bill for rural and urban America. It is a bill to create a 
safety net that provides a steady, stable income for our 
farmers and ranchers, and virtually every dollar makes it back 
to Main Street and our rural communities.
    We have all made the speech that the consumer in America 
today spends only 10 cents of their disposable income dollar 
for that market basket of food, thus freeing up 90 cents, if 
you will, to spend for other essential items. It is not only a 
farm bill; it is a bill for rural America, and certainly for 
urban America as well.
    It is a bill to promote the conservation programs that 
protect not only our most fragile land, but which also protects 
our water, air and wildlife. The chairman has a unique 
initiative in that regard in regard to legislation.
    It is about rural development programs to provide our rural 
communities with the infrastructure and public facilities that 
many of our city cousins simply take for granted.
    It is about, as Senator Allard did point out, bolstering 
the research and education programs that ensure our producers 
have access to the best crop varieties, disease control 
methods, and the technology to allow our rural communities to 
continue to move forward. It is a bill to preserve our economic 
foundation in the future and way of life in our rural areas.
    Now, we are not in very good shape with the shape we are in 
in farm country. Times have been difficult in rural America in 
recent years. We have taken some short-term steps to address 
our problems. Now, it seems to me we must face the difficult 
task of writing a new farm bill.
    We have a choice, Mr. Chairman. We can continue to focus 
primarily on the myriad of complex micro issues in farm program 
policy that usually put our colleagues into a high glaze after 
talking to them for about one minute--all of the program 
details, all of the parochial interests, and certainly we have 
heard about that this morning, and loan rates, AMTA payments, 
deficiency payments, loan deficiency programs, supply 
management, acreage reduction, and so on and so forth, as we 
have done for the past 3 to 5 years. Or we can make every 
effort to try to work together to come up with a product that 
will improve farm income and sustain agriculture over the long 
term.
    It seems to me we spend so much time around here really 
focusing on prices that we forget that price means nothing if a 
producer has no crops to sell. We must focus on income.
    Mr. Chairman, it would be easy for each of us to wander 
down on our own path of political and personal trails. I would 
hope we could resist this temptation and really put our heads 
together to try to think out of the box on these issues.
    Without question, the current Farm bill has not been able 
to address all the problems associated with the Asian flu, 3 or 
4 years of outstanding growing weather all throughout the 
world, unfair trading practices by our competitors, and an 
overvalued dollar that is hurting us in the export market.
    As a matter of fact, no farm bill is perfect. Certainly, no 
farm bill is ever written in stone. In the last 10 years, we 
have had nine emergency bills, regardless of what farm bill has 
taken place, due to the dynamic nature of agriculture and the 
way things change.
    I would point out that in terms of what we tried to do in 
1996 with the other component parts of crop insurance, 
regulatory reform, better conservation, tax relief, and a 
consistent and aggressive export policy, some of those things 
have not happened. However, I do want to thank the chairman for 
his outstanding help in providing $8.3 billion in a new crop 
insurance program that was authored by Senator Bob Kerrey and 
myself. Certainly, that is a help. The previous Farm bill could 
not address the problems of a producer who had high prices but 
no crop to harvest. That is the previous Farm bill. The current 
farm bill does.
    It is time we tried to look at things a little differently. 
In the trade arena, the historical relationship of stocks-to-
use ratios in world stocks would seem to indicate that grain 
prices should be on the rise. That is not happening, and we 
know that the purchasing patterns of our world buyers have 
changed. We need to look at new approaches.
    I have a laundry list here of all the export programs. I 
see some people in the audience who testified before the 
committee not too long ago, and I said what out-of-the-box 
program could you come up with with this new challenge that we 
face? They had some good ideas, but most that I have read, Mr. 
Chairman, is as we went down the list we wanted more money for 
the same programs. I am not too sure that is the best answer.
    I have got some goals for this Farm bill. No. 1, ensure a 
stable, consistent farm income that supports not only our 
producers, but also our rural communities and businesses. Two, 
maintain the flexibility of the 1996 Act. Three, avoid if we 
can set-asides and mandatory acreage reduction programs that 
only cause us to lose world market share in the long run and 
that are not very friendly to our environment.
    Four, we must adhere to our WTO obligations as best we can. 
Five, we continue a voluntary, incentive-based approach to 
conservation issues, expanding the funding and eligibility for 
the Environmental Quality Incentives Program. The chairman has 
a bill that is much more comprehensive than that.
    One other thing, Mr. Chairman. we really need to focus on 
carbon sequestration and what agriculture can do as a partner 
in our efforts to find answers to the global warming syndrome.
    Six, revisit our trade programs to address the world trade 
issues and patterns as they currently exist, not as they did in 
1990.
    Seven, supplement the rural development programs to address 
many of the critical infrastructure and the technology needs we 
have in rural America.
    Eight, invest in our agriculture research, including the 
upgrading of USDA facilities, so that we can be sure that we 
are prepared to address the disease threats that were mentioned 
by Senator Allard.
    Mr. Chairman, I served on the Emerging Threats Subcommittee 
of the Armed Services Committee as its chairman for three 
years. Right now, our intelligence sources will rate agri-
terrorism as a very serious risk and a higher risk. We must be 
prepared to address that kind of a threat.
    Finally, I have no illusions about this process. It is not 
going to be easy. It never is and, yes, we will have our 
differences. With the wide disparity in farm bill proposals 
that are out there and a nearly evenly split Senate, we have no 
choice but to work together.
    I want to thank you, sir. I want to thank you for your past 
contribution to agriculture and I look forward to working with 
you and my colleagues on this committee.
    The Chairman. Senator Roberts, thank you very much for a 
very strong statement. I wrote down those issues and these are 
issues I know we can work together on. I really can't take 
exception to any of them. These are all things that we have to 
do and focus on. I appreciate that and look forward to working 
closely with you and calling upon your vast background and 
expertise in developing farm bills to get this one through.
    We have about four minutes left in the vote, so my 
intention is to recess now. We have two votes, so we can get 
over and do this vote, then vote early on the next one and then 
come right back. We will pick up with Senator Dayton as soon as 
we come back.
    We will be in recess for about 15 minutes.
    [Recess.]
    The Chairman. The Agriculture Committee will resume its 
sitting.
    I would like to now call to the witness table the following 
individuals: Mr. Leland Swenson, President of the National 
Farmers Union; Mr. Bob Stallman, President of the American Farm 
Bureau Federation; Chuck Fluharty, Director of the Rural Policy 
Research Institute; Craig Cox, Executive Vice President of the 
Soil and Water Conservation Society; Howard Learner, 
Environmental Law and Policy Center; Dr. Barbara Glenn, Member 
of the Board of Directors of the National Coalition for Food 
and Agricultural Research; Sharon Daly, Vice President for 
Social Policy of Catholic Charities; and Dave Carter, 
Secretary-Treasurer of the Mountain View Harvest Cooperative.
    Before we start with the panel--I just wanted to make sure 
you were all here--are we missing Mr. Learner? Well, anyway, I 
wanted you all here, but we are going to finish our statements 
by Senators on the committee. Senator Dayton is here and then 
also Senator Lincoln is on her way back to give her statement, 
and hopefully she will be here by the time that our 
distinguished Senator from Minnesota and my good friend, 
Senator Dayton, makes his opening statement.
    At this time, I will recognize Senator Dayton.

  STATEMENT OF HON. MARK DAYTON, A U.S. SENATOR FROM MINNESOTA

    Senator Dayton. Thank you, Mr. Chairman, and I want to 
congratulate you, as others have, on your chairmanship. I very 
much look forward to working with you. I am reminded that I am 
actually officially here today as a guest of the committee. 
When you are 100th in seniority, it is hard to imagine you can 
actually get demoted, but I have lost all my committee 
assignments.
    [Laughter.]
    The Chairman. How do you think I feel? I am talking about 
all the firsts here today. I am officially chairman of the 
committee, but I am in the minority, which is what you are 
saying, because of the resolution we have not gotten passed 
yet. This is another first.
    Senator Dayton. Don't call for any votes, that is my 
suggestion.
    [Laughter.]
    Senator Dayton. I would like to get to our distinguished 
panel, as well, Mr. Chairman, so I am going to limit my remarks 
to say that I look forward to working with you. We have got 
some major challenges, obviously, facing this legislation, but 
you have got us right on the right track with all of these 
opportunities as well as some tough issues we are going to have 
to face. I look forward to working with you, and I look forward 
to hearing from our panelists today.
    The Chairman. We do have the time. I appreciate that, but 
if you wanted to delve any further, I would be glad to hear any 
statements. Otherwise, it will be made a part of the record in 
its entirety.
    Senator Dayton. I will submit that for the record later. 
Thank you.
    The Chairman. I thank you very much, Senator Dayton.
    [The prepared statement of Senator Dayton can be found in 
the appendix on page 64.]
    The Chairman. Since Senator Lincoln is not here, we will 
turn to our panel, and when she arrives, we will interrupt for 
her statement.
    As I said, we have a very distinguished panel, and while we 
had had a couple of hearings earlier this year regarding some 
elements of the Farm bill, they were not in the contextual 
framework of looking at the Farm bill. Senator Lugar was 
correct. He did chair some hearings. We started laying the 
groundwork. Now we are into the real meat of trying to get all 
the information we can from all the various groups so that we 
can begin the drafting of this Farm bill.
    I just might say for those of you who are here and for the 
staffs and Senators who are here that we are developing a very 
aggressive hearing schedule for the month of July. I am certain 
that we will be calling upon you again in the following months 
for clarification of your positions, perhaps for further input 
from you as we develop this legislation.
    With that, I thank you for being here. Without objection, 
all of your written statements will be made a part of the 
record. I ask, if you could, sum up for us and give us sort of 
the highlights of where you think we ought to be going in the 
Farm bill and what you think we ought to be writing into it for 
the future. If you do that, I would sure appreciate it, and 
then we can get into questions and answers.
    With that, I would first turn to a longtime friend of mine, 
Mr. Leland Swenson, President of the National Farmers Union. I 
just want you to know, I did read your statement last night. It 
is very long and involved, but very comprehensive. Both you and 
Bob Stallman, both of your statements are very, very inclusive 
and I appreciated both of those statements. There is a lot of 
meat in there.
    With that, I will begin with Mr. Swenson.

STATEMENT OF LELAND SWENSON, PRESIDENT, NATIONAL FARMERS UNION, 
                         WASHINGTON, DC

    Mr. Swenson. Thank you, Chairman Harkin. I congratulate you 
on assuming the chair and look forward to working with you. 
Ranking Member Lugar is not here, but I thank him for his 
outstanding leadership in his role as chair of the committee, 
and the fellow members of the Senate Agriculture Committee.
    As President of the National Farmers Union, it is a 
pleasure to appear before you today on behalf of the 300,000 
farm and ranch members of the National Farmers Union to discuss 
with you our ideas for new, and I emphasize comprehensive, 
agricultural policy. We believe such a policy must be developed 
that will provide a more sustainable and predictable long-term 
economic safety net for producers and further encourage the 
conservation of our natural resource base.
    Additionally, agricultural policy should create new 
economic opportunities for producers, for our rural 
communities, for rural businesses, and through increased demand 
of our agricultural products, both domestically and 
internationally, and help establish more open and competitive 
markets, and understanding that we must do all of this with a 
limited funding resource that is available. Our proposals 
encompass those visionary principles.
    I want to just highlight very quickly for you some of the 
goals that we hope farm program policy will achieve.
    No. 1 is that farmers will be able to achieve 100 percent 
of full cost of production and a reasonable profit from the 
marketplace.
    No. 2, that farm policy will help create opportunities to 
increase both domestic and international demand for U.S. 
commodities, and we do support the establishment of a 
nationwide renewable fuel standards to triple the demand for 
U.S. commodities and provide energy security and protect our 
environment, and we know that a number of the members of this 
committee, including Senator Lugar, Senator Daschle, you, Mr. 
Chairman, Senator Johnson, and Senator Hagel have provided the 
leadership in the introduction of the renewable fuels standard 
and we support that enactment.
    We also believe farm policy should establish a 
countercyclical safety net based on current production rather 
than obsolete yields and bases to address unpredictable market 
circumstances.
    Mr. Chairman, we believe that the Farm bill needs to look 
at providing discretionary authority for the Secretary to 
contain program costs through targeting and inventory 
management programs.
    I want to highlight very quickly some of the issues that we 
think need to be encompassed. One is the non-recourse marketing 
loan, which currently exists. We believe it should be continued 
in the next farm program, but that the structure of the 
marketing loan should be based on a percentage of the cost of 
production and productivity, not based on some arbitrary number 
that is just picked out of the air.
    All of you in your opening comments highlighted increased 
input costs that have impacted farmers, that they have been 
unable to deal with in relation to the price they received, or 
the safety net that has been provided through the ad hoc 
emergency disaster. If we structured a loan rate that was tied 
to a percentage of cost of production, that way, it would 
respond to those fluctuations of which impact producers beyond 
their control. We hope you will take a look at that, and then 
have it be countercyclical so that it is commodity-specific, 
based on actual production, and allowing planning flexibility 
so farmers can produce what they want to produce. With the 
marketing loan, it is non-recourse, planning flexibility is 
already in place, and it is understood by producers.
    We want to emphasize to have you look at some new vision in 
the program, and we want to emphasize three Reserve programs 
that we hope you will take into some consideration.
    One is a renewable energy reserve. I was pleased, sitting 
here listening, of the unified comments made about the 
commitment to ethanol and bio-based fuel expansion. If we are 
going to do that and not have it contract when we might have a 
disaster that improves prices in the market, I believe we have 
to have a renewable energy reserve as important as a strategic 
oil reserve that we currently have in this country. It should 
be government-owned, and farmer-stored, to support bio-energy 
demand, limited to one year's needs, so it does not overhang 
the commercial food or feed markets. It is a dedicated reserve 
to energy.
    The second reserve we would ask you to look at is a 
humanitarian food assistance reserve that is government-owned, 
farmer-stored, to support the demand for growth of food aid 
programs, such as P.L. 480 and the international school lunch 
program that has been talked about already, and again, does not 
overhang the commercial market.
    The last reserve we would like you to consider is a 
production loss reserve. A farmer-owned, farmer-stored, 
supplement to the crop insurance coverage and the improvements 
made in the last farm program with the leadership of Senator 
Roberts, Senator Kerrey, and many of you on this committee, 
which enhanced the program, but farmers are still left without 
15 to 20 percent of coverage within the program. The production 
loss reserve, we are proposing would allow about a 20 percent 
limit on what farmers produce to go into that production loss 
reserve, and if they suffer a partial loss, they could draw out 
of that to receive crop protection within that production year. 
We hope you will give that some consideration.
    The other thing we would like to touch on is the 
authorization, for discretionary authority to put in the tool 
box, if you want to call it, for the Secretary to have a 
program of cost containment authority via the nature of a 
voluntary inventory management program.
    Moving on very quickly, because I know my time is limited, 
we do have in our proposal a proposal for dairy, which 
establishes a structured target price support for dairy. We 
also encourage and include provisions of S. 847 introduced by 
Senator Dayton to impose TRQs on milk protein concentrate, 
which we believe is impacting dairy producers all across this 
country. We do support the inclusion of a safety net for 
specialty crops.
    We believe that conservation must be a critical element of 
this Farm bill. We increase the conservation reserve program, 
and we establish a short-term soil rehabilitation program of up 
to five million acres. I want to emphasize that, because a new 
issue that is unfolding in agriculture. Karnal bunt is 
impacting producers in Texas, and the concern of it spreading. 
Here is an opportunity where those farmers could enroll in a 
short-term soil rehabilitation program of which to eradicate 
that disease and receive some compensation. That way, we 
address it not just to the benefit of the producers, but to the 
benefit of agriculture as a whole. We also strongly support the 
Conservation Security Act, Senator, that you are advancing.
    I want to also emphasize that we believe a key component 
has to be expanding the whole rural development initiative 
within the farm program structure.
    I want to also emphasize that in the area of trade, as has 
been pointed out, we think a full effort should be made to 
expand international trade, but some critical issues must be 
addressed within that dialog, within that discussion, if we are 
going to have that opportunity for producers. I believe the 
largest obstacle to U.S. trade today is the lack of a mechanism 
to address exchange rate differentials and distortions, because 
that has really kept us out of many markets or made us less 
competitive, even with the lowest prices in the last 20 years.
    I also support that removal of all sanctions of food and 
medical products. We also believe that labor and environmental 
standards must be brought to the table if we are going to again 
compete in an international market place. We can say they have 
to be considered as a different remedy, but we have to compete 
in the nature of production with environmental standards, labor 
standards, that are directly related to our cost of production. 
We must bring it to the table for discussion.
    We also believe that we must retain domestic trade remedy 
authority for those issues that arise. We also believe the 
implementation of the Trade Adjustment Assistance Act for 
farmers, which is there for workers. Also, we believe that, of 
course, credit must be part of the Farm bill, research must be 
part of the Farm bill. Concentration must be a key element and 
enhancements and some new visionary approaches in the area of 
addressing less-open, less-competitive markets.
    I am pleased to say, Mr. Chairman and members of the 
committee, that as we analyze our very comprehensive farm bill 
in relation to the budget approved, we were pleased that in the 
analysis provided by the University of Tennessee, that it came 
within the budget approved, and so we hope you will take that 
in consideration.
    In conclusion, let me just say that we urge you to enact a 
new, comprehensive agricultural legislation that creates a 
broad range of opportunities for producers, rural communities, 
and consumers. I am often asked by producers and policymakers 
what our proposal means to farmers and ranchers. We prepared a 
worksheet, Mr. Chairman and members of the committee, that 
allows producers to compare our proposal to current law, using 
yields and acreage from their own farms. We would like to 
provide to the committee, if there is no objection, and a copy 
of the worksheet completed by a diversified Kansas farmer as to 
what our farm program would mean. We will also provide you a 
blank one of which to look at or share with producers from your 
respective States.
    Mr. Swenson. We hope you will give close review to our 
proposal and we look forward to the opportunity to address any 
questions. Thank you, Mr. Chairman and members of the 
committee.
    The Chairman. Thank you very much, Mr. Swenson, for 
summarizing this very comprehensive statement you have here.
    [The prepared statement of Mr. Swenson can be found in the 
appendix on page 78.]
    The Chairman. I am now going to interrupt, as I said I 
would, to recognize Senators who were not here earlier for any 
opening statements they might have. First, we welcome to the 
committee my neighbor, Senator Fitzgerald from Illinois.

    STATEMENT OF HON. PETER FITZGERALD, A U.S. SENATOR FROM 
                            ILLINOIS

    Senator Fitzgerald. Mr. Chairman, thank you very much. If I 
could just get unanimous consent to enter a statement in the 
record, I would appreciate that.
    I want to compliment the chairman and the ranking member 
for holding these hearings and I wanted to welcome Howard 
Learner from Chicago to the committee. I knew Howard back when 
I worked in the Illinois State Senate in Springfield, Illinois.
    I wanted to compliment the chairman, also, on press reports 
that you wanted to add a new energy title to the Farm bill. I 
look forward to helping the committee craft such a title and 
that is a very good idea. We should think about it and work 
toward it and I would like to help you do that.
    With that, Mr. Chairman, thank you very much.
    The Chairman. Thank you very much, Senator Fitzgerald. We 
are delighted and honored to have you also serve on this 
committee.
    [The prepared statement of Senator Fitzgerald can be found 
in the appendix on page 73.]
    The Chairman. Senator Lincoln has not returned, so now we 
turn to Mr. Bob Stallman, a rice and cattle producer from 
Columbus, Texas, serving his first term as President of the 
American Farm Bureau Federation, elected January 13 of 2000. My 
notes say you are the first President to hail from the Lone 
Star State.
    Welcome, Mr. Stallman, and again, I thank you for your 
long, very comprehensive statement, which I also read last 
night and look forward to your statement this morning.

  STATEMENT OF BOB STALLMAN, PRESIDENT, AMERICAN FARM BUREAU 
                   FEDERATION, WASHINGTON, DC

    Mr. Stallman. Thank you, Mr. Chairman, and congratulations 
and we look forward to working with you under your leadership 
of this committee that is extremely important to American 
agricultural producers. Senator Lugar and members of the 
committee, it is a pleasure to be here this morning.
    I want to begin today by talking about a farm opportunity 
rather than a farm problem. I ask you as policymakers to commit 
to a view of agriculture in which it plays a vital role in 
solving world problems and in the process sets the stage for 
our industry to grow. It is not an exaggeration to call our 
farm opportunities issues of national security. American 
agriculture provides food security for this nation and much of 
the rest of the world. We contribute to our national economic 
security by running a positive balance of trade and generating 
off-farm employment. We contribute to the world's environmental 
security by making use of intensive, high-tech production that 
saves fragile lands. We can do much more.
    Our vision of the future is a vision of a growing industry 
that depends less on government payments and more on returns 
from the marketplace, but we must implement policies that will 
grow our markets. We can build demand by continuing to pursue a 
level playing field in international markets. We must finalize 
the elimination of unilateral trade sanctions and open trade 
with these markets now. We must increase market promotion and 
market access. We must pass trade negotiating authority. We 
must fight world hunger with increased food assistance 
programs. As markets grow, farm program costs decrease and 
farmer incomes grow from the marketplace.
    The cornerstone of this vision is a major role for 
renewable fuels in our nation's energy policy. Agriculture can 
provide fuels that improve air quality and make the Nation less 
dependent on foreign oil. This energy contribution improves the 
environment, decreases reliance on foreign oil, creates jobs, 
dramatically increases agricultural markets, and decreases farm 
program costs as markets grow. However, bridging the gap 
between where we are now and where we want to be in the future 
requires an expanded public investment in agriculture.
    Another part of our short-term reality is that we will 
continue to need income support consistent with our 
international trade obligations. Part of this new spending 
authority would be countercyclical and, therefore, would 
decline as opportunities for market growth are realized.
    Before I move forward with our summary of specific 
recommendations for the next Farm bill, I want to share the 
parameters used by our board of directors in making the 
recommendations.
    One, Farm Bureau, along with 23 other farm and commodity 
groups, earlier in the year strongly urged Congress to 
authorize $12 billion in additional annual spending for 
improvements in the Farm bill. We are concerned that the fiscal 
year 2002 budget resolution only includes an additional $8 
billion, on average, in agricultural funding for the next five 
fiscal years for the Agricultural Committees to draft a bill 
that will provide an adequate safety net for farmers and 
ranchers in the future. We have, however, prioritized the needs 
outlined for the farm to comply with the average $8 billion in 
additional budget authority as passed by the House and Senate.
    Two, we believe it is extremely important for the new Farm 
bill to stay within the WTO amber box commitments. The 
recommendations we present today are targeted toward the next 
Farm bill. They are not our recommendations for a short-term, 
low-income relief package. We believe Congress should approve 
an economic assistance package of $7 billion for crop year 2001 
as opposed to the $5.5 billion approved over in the House, and 
we think those decisions need to be made fairly rapidly on 
behalf of producers.
    Farm Bureau is the only group that will appear before your 
committee that represents producers of all agricultural 
commodities in all 50 States and Puerto Rico. Because of this 
diversity in American agriculture, our recommendations 
constitute a tool box approach. We, like this committee, must 
ensure a balance between all those interests. We believe our 
recommendations achieve that balance, as well as stay within a 
reasonable budget request and our WTO commitments.
    Specifically, Farm Bureau recommends, one, that production 
flexibility contract payments to current contract holders be 
continued and that current provisions limiting the planting of 
fruits and vegetables on land receiving PFC payments also 
should be continued.
    We did consider the need for updating bases and yields, but 
believe that until more analysis on the economic impacts of 
that decision, bases and yields should not be updated at this 
point.
    The $4 billion in production flexibility contract baseline 
should be increased by $500 million in order to allow oil seed 
production to be eligible for PFC contracts. This amount is 
based on an average of what soybean producers have received 
from market loss assistance payments over the last two years.
    We support a loan rate rebalancing plan to increase loan 
rates to be in historical alignment with the current soybean 
loan rate of $5.26 per bushel in order to reduce the distortion 
between soybeans and other program commodities.
    The Farm bill should include a new countercyclical income 
assistance safety net that would be classified green box, and 
the details of a proposal that we believe would be green box 
are incorporated in our written statement.
    We oppose new supply management programs, a farmer-owned 
reserve, or any federally controlled grain reserve, with the 
exception of the existing capped emergency commodity reserve. 
We also oppose extension of the CCC loans beyond the current 
terms, means testing, all payment limitations, and targeting of 
benefits.
    With respect to dairy, we think the dairy price support 
program should be extended with a support price of $9.90 per 
hundred weight. We also support reauthorization and expansion 
of the Northeast Dairy Compact and authorization of a Southern 
Dairy Compact.
    Farm Bureau supports a non-recourse marketing loan program 
for wool and mohair that would operate similarly to other 
commodity marketing loan programs.
    Moving away from the commodity provisions, we also support 
an increase of $2 billion within that $8 billion in funding for 
conservation stewardship programs. Conservation stewardship 
should include a mix of cost-shared funding and conservation 
incentive practice program payments.
    We also would support additional funding for peanut and 
sugar producers to help them address the structural problems 
and the problems they are experiencing within those two 
industries.
    Mr. Chairman, Farm Bureau looks forward to working with you 
and other members of this committee on the upcoming Farm bill 
and I will look forward to questions when the rest of the 
panelists finish.
    The Chairman. Mr. Stallman, thank you again very much for a 
succinct summation of a very strong statement and comprehensive 
one that you submitted to the committee. We look forward to 
working with you as we develop this Farm bill.
    [The prepared statement of Mr. Stallman can be found in the 
appendix on page 130.]
    The Chairman. I now turn to Mr. Chuck Fluharty, Director of 
the Rural Policy Research Institute of Columbia, Missouri, and 
again, as I said earlier, your statement will be made a part of 
the record and I thank you for getting it to us so I could look 
at it last night. Mr. Fluharty.

   STATEMENT OF CHARLES W. FLUHARTY, DIRECTOR, RURAL POLICY 
             RESEARCH INSTITUTE, COLUMBIA, MISSOURI

    Mr. Fluharty. Thank you, Mr. Chairman. Let me add my 
congratulations on your assuming the chair and thank Senator 
Lugar for his excellent tenure and all the members of this 
committee for the outstanding work on behalf of agriculture and 
rural communities. I really appreciate the opportunity to 
briefly discuss the context for this Farm bill, the framework 
you will use in for the content of this re-authorization.
    As you know, our nation's rural communities and farmers are 
facing very difficult challenges today. Indeed, many 
communities, firms, farms and ranches, and rural families are 
in very real crisis. Conversely, however, this is also a time 
of great opportunity in other rural communities, which are 
experiencing for the first time in-migration, unmitigated 
sprawl, and the challenges inherent in their culture and 
infrastructure for that development.
    Indeed, one of the greatest challenges this committee faces 
is the amazing diversity of rural America and the need to craft 
a comprehensive approach which addresses these many realities. 
You must fully acknowledge this diversity, and recognize the 
differences in space, geography, culture, and context for the 
entire rural America which you address.
    We appreciate your commitment, Mr. Chairman, to taking a 
look at a more integrative approach and we do all realize 
everyone in this room, that this is a daunting challenge. I 
would say, however, that I believe every one of the diverse 
stakeholders that are with us today acknowledge, and are 
willing to play a role in building, a new mutual 
interdependence which actually reflects the long understood and 
acted upon interdependence that their constituents in rural 
communities work through every day.
    It is far past time, Mr. Chairman, that the advocates for 
agriculture and rural communities unite around the basic truth 
that we are in the same rowboat in a very large ocean. I 
commend this committee for initiating this discussion with that 
spirit, and I believe everyone at this table and in this room 
recognizes that must occur.
    Also, Mr. Chairman, we are developing this at an historic 
moment. Never before in my professional career have I seen the 
organizations and institutions in this room representing the 
diverse rural people, places, and producers, in common 
recognition that we must develop a comprehensive, integrative 
approach to this Farm bill. We simply must no longer accept the 
fragmentation of the past. We need a comprehensive, 
contemporaneous approach designed to sustain agriculture and 
rural communities in a new global environment.
    Mr. Chairman, our nation needs a national rural policy. 
That does not exist and it matters that it does not. This is 
the committee of mandate for rural people, and the hopes and 
dreams of rural people stand with you. I urge, as you begin 
this, that this becomes the committee where the future of rural 
America has champions for a new and integrative way.
    If this goal of an inclusive, informed dialog about rural 
policy is to be initiated, what would the policies look like 
that we might craft? How would they be developed, and could we 
build the bipartisan leadership to do that?
    I really believe rural people today are in very bad need of 
this and I would urge the development of that comprehensive 
framework. I know budgets are tight and time is tight, but I 
believe this Farm bill should be different in kind and not 
degree from all of the past. The times demand it, our 
constituencies need that, and if you can seize this moment, we 
will have, frankly, optimized the most unique opportunity of 
this generation to link rural development and agriculture.
    In my written statement, Mr. Chairman, I lay out the 
interdependence of farm and rural economies, the continuing 
challenges of rural poverty, out-migration, and suburban 
sprawl. Each of these issues has unique rural implications and 
there are many sector-specific issues, from transportation to 
infrastructure, that are also challenging. As we begin this 
reauthorization, I would urge special attention to the 
importance of a comprehensive approach.
    In this regard, the recommendations of the bipartisan 
Congressional Rural Caucus are especially key. Their 
recommendations to President Bush are significant, and the 
ability to build a more comprehensive approach will be realized 
if this administration takes action, in concert with the 
agriculture committees in doing this.
    I would simply raise several overarching principles that 
must be addressed in my closing comments, and I hope we can 
then get into specifics.
    The first is that we are going to need to sustain 
categorical programs and funding streams regardless of what we 
do, and be very careful, in moving to a new incremental 
approach, that we first do no harm. There is great fragility in 
this infrastructure, and as we rethink approaches, we must be 
certain we sustain existing programs.
    Second, we must build rural community capacity and 
leadership. In my testimony, Mr. Chairman, I discuss the 
relationship of Federal funding flows to rural and urban areas. 
This is a very critical issue. The Federal Government is now 
spending more money in urban areas than rural, even with your 
expanding emergency payments. The challenge is, this rural 
commitment is 70 percent transfer payments to individuals. In 
urban areas, that figure is 48 percent transfers. The rest of 
that urban money is going to build infrastructure, community 
capacity for government, and sustaining community-private-
philanthropic linkages. That 70-48 differential inhibits the 
ability of rural local leaders, like yourselves, to build upon 
this Federal commitment.
    Urban areas have HUD and they have the Department of 
Transportation. They have a CDBG that is essentially a place 
entitlement. I would urge that this committee rethink a place 
entitlement for rural places, so that they do not have to 
compete against one another for these monies through local 
government, but can begin to think about a way for that 
capacity to be built.
    Two last points, Mr. Chairman. First of all, we must 
rethink the linkage between agriculture and rural development. 
Agriculture is a rural development strategy and that 
interdependency, is amply pointed out in my testimony. As we 
think about rural development this year, let us talk about 
agriculture as a key component of that.
    Last, Mr. Chairman, we simply must address the challenge of 
venture and equity capital in rural America. We will not build 
rural entrepreneurship unless we address the decided disparity 
in venture and equity capital between rural and urban America.
    Mr. Chairman and members of the committee, I thank you so 
much for this comprehensive approach and we look forward to 
specific questions and working with you in the future. Thank 
you so much.
    The Chairman. Thank you very much, Mr. Fluharty.
    [The prepared statement of Mr. Fluharty can be found in the 
appendix on page 151.]
    The Chairman. Next, we will turn to Craig Cox, Executive 
Vice President, Soil and Water Conservation Society. Mr. Cox.

  STATEMENT OF CRAIG COX, EXECUTIVE VICE PRESIDENT, SOIL AND 
            WATER CONSERVATION SOCIETY, ANKENY, IOWA

    Mr. Cox. Mr. Chairman, Senator Lugar, members of the 
committee, as you remember, I appeared before this committee in 
March at a conservation hearing that Senator Lugar held, and at 
that time, we reported to you on what we heard in a series of 
five workshops that we held across the country in 2000. Since 
that time, we have taken what we heard at those workshops and 
we have developed a set of concrete recommendations for reform 
of both conservation provisions and farm policy, which are 
contained in our new report that has been made available to 
members and the committee and detailed in my written statement.
    What I would like to do in my oral remarks is to hit the 
high points, as you instructed Mr. Chairman. In short, what we 
heard at these workshops was that the next Farm bill has to be 
about more than the price of corn or the price of wheat or the 
price of cotton or any other particular agricultural commodity. 
What our workshop participants were looking for was a 
comprehensive, integrated agriculture policy designed to care 
for the land and to keep people on the land to care for it. 
They communicated to us, often with great passion, that current 
agricultural policy is falling short of that goal.
    Based on our analysis of what we heard at our workshops, we 
think the reason agricultural policy is falling short of that 
goal is because that policy is out of balance. We think 
conservation policy is unbalanced and we think farm policy is 
unbalanced, and our recommendations are designed to restore 
that balance.
    On the conservation side, we think the imbalance comes from 
an over-reliance on tools that take land out of production and 
devote it then primarily to conservation purposes. What we are 
missing in current conservation policies and programs is the 
ability to keep land in production and work with producers who 
want to keep farming and ranching, but do so in a more 
environmentally sound way.
    On the farm program side, we believe we have developed an 
over-reliance on a set of tools that is designed to either 
subsidize the income of or affect the price of a handful of 
commodities. As production of those commodities has 
concentrated on fewer and fewer farms, the benefits of those 
programs have concentrated in fewer and fewer hands. For 
example, in 1999, about 47 percent of the subsidy benefits 
flowed to about 8 percent of producers who are operating about 
32 percent of farm acres.
    Those two imbalances, taken together, means that the reach 
of our current agricultural policy is seriously limited. We 
simply are not touching most farmers, either on conservation or 
on the farm policy side, in a way that can really effectively 
keep all of agriculture working and keep all of agriculture 
taking care of the land.
    To restore balance on the conservation policy side, we 
would urge you to double funding for existing conservation 
programs from about $2.5 billion to $5 billion a year. Most of 
that additional $2.5 billion investment go to; No. 1, programs 
like EQIP that help working farms and ranches landscape and the 
technical infrastructure--research, technical assistance, 
education--that is absolutely critical to a renewed focus on 
the working landscape.
    That is the minimum we think that ought to happen, and it 
is about, in percentage terms, the same increase in funding 
that this committee accomplished in the 1985 Farm bill. It 
would be a big mistake at this juncture to settle for the 
minimum. We instead would urge you to make room in farm policy 
itself for an option based on land stewardship, an option that 
would pay people a fair return for investing their labor and 
capital in improving the environment, to pay them a fair return 
for what they are already doing to improve the environment and 
to encourage them to do more to improve the environment.
    In our vision, we see this new program as being an analog 
to the existing production flexibility contract, except the 
stewardship contracts would be based on the care of the land 
rather than on the mix of commodities that were produced in 
some historical period in the past.
    Fixing what we have got is the first step, but we will miss 
a tremendous opportunity if we do not take this chance to build 
into farm policy itself a program based on stewardship. Thank 
you, sir.
    The Chairman. Thank you very much, Mr. Cox.
    [The prepared statement of Mr. Cox can be found in the 
appendix on page 163.]
    The Chairman. Now we will turn to Howard Learner of the 
Environmental Law and Policy Center in Chicago.

      STATEMENT OF HOWARD A. LEARNER, EXECUTIVE DIRECTOR, 
          ENVIRONMENTAL LAW AND POLICY CENTER OF THE 
                   MIDWEST, CHICAGO, ILLINOIS

    Mr. Learner. Thank you, Mr. Chairman, Senator Lugar, and 
the members of the committee for the opportunity to appear 
today to discuss why wind power and biomass energy development 
in farming communities can produce both environmental quality 
gains for the broader public and economic development benefits 
for farmers in particular.
    We encourage the committee to explore ways to include clean 
energy development initiatives in a new energy title in the 
Farm bill. We believe that farmers can effectively become 
suppliers, not just users, of energy.
    Everybody knows that the Midwest farmlands, in particular, 
are ideal for growing crops that energize our bodies. If the 
right public policies are put into place, farmers can also be 
encouraged to develop wind power opportunities, produce crops 
for bio-diesel and ethanol fuels, use land for conservation 
stewardship, and grow high-yield energy crops that can be used 
to generate electricity to power our economy. Expanding wind 
power and biomass energy, will provide new markets for crops 
while reducing air and water pollution, deterring soil erosion, 
and providing rural income and jobs. Let us give farmers the 
tools to succeed and the incentives to succeed in these 
genuinely new markets that provide environmental value.
    I have five points to present today in summary fashion. 
First, let me turn to wind power development opportunities. 
Wind power is the world's fastest-growing energy source. It 
expanded about 35 percent in 1998. More than 600 megawatts of 
new wind power has come on line in the Midwest alone since 1998 
that avoids pollution from central power plants and provides 
rural economic development opportunities.
    Wind energy is truly a cash crop for farmers. The typical 
annual lease payment for windy sites in the Midwest is about 
$3,000 per turbine. For a 50-megawatt wind farm, that is about 
$125,000 to $150,000 per year.
    Iowa and Minnesota have led the way with wind power 
development and there are major new wind power projects now 
going up in Iowa, Illinois, Kansas, Minnesota and Wisconsin. 
Wind power is fast becoming a larger reality in the Midwest and 
across our nation. There are more development opportunities for 
large wind farms. There are also significant untapped 
opportunities for small-scale distributed wind power to serve 
individual farms and smaller communities that are in more 
remote locations.
    Congress should consider steps that can be taken to map 
good wind power sites in rural communities, provide easy access 
to monitoring equipment to determine what is a good windy site 
for local farmers, and provide low-cost financing for smaller 
distributed wind power projects.
    Let me turn to my second point. Energy efficiency is the 
best, the fastest, and the cheapest solution to power 
reliability problems. Inefficient energy use continues to waste 
money and cause unnecessary pollution, and the places for 
energy efficiency improvements are not limited to the major 
cities and the suburbs. There are many opportunities to be 
tapped for cost-effective energy efficiency improvements and 
farming activities that include more efficient motors and 
pumps, more efficient grain-drying equipment, and better 
lighting.
    The third point; the importance of a renewable portfolio 
standard. Federal policy action is necessary to transform this 
energy development potential for farmers from a good idea into 
reality. The single most important legislative step would be a 
Federal renewable portfolio standard that requires all retail 
electricity suppliers to include a specific percentage of 
renewable energy supplies as part of the generating power mix 
that they are providing to consumers.
    It is essential that the types of renewable energy be 
carefully defined to include principally wind power, biomass 
energy, and solar power; not municipal solid waste 
incineration, the burning of tires, construction wastes, and 
some other materials. Otherwise, the value of a renewable 
portfolio standard gets sidetracked. The opportunity to provide 
wind power and biomass energy development is undermined.
    Fourth point, in developing the Federal farm bill, this 
committee should explore a potential new conservation energy 
reserve program that would recognize the value of putting 
agricultural lands into energy production in ways that also 
provide conservation production. The Chariton Valley biomass 
energy project in Iowa is a good example of how switchgrass can 
be grown and harvested to provide 35 megawatts of power. A 
conservation energy reserve program could be structured to 
allow, for example, one cut of switchgrass each fall after the 
birds have migrated. That is good for the farm economy, that is 
good for the environment. It provides a new cash crop.
    A fifth and final point, we need transmission access 
reform. If you cannot get the wind power to the load centers 
and the market because of transmission constraints, it stymies 
the development of wind power and biomass energy.
    To wrap up, historically, America has relied on farmers to 
work their lands to provide crops to put food on our tables. 
There are now 21st century opportunities to use lands to 
produce crops that power our economy, our homes, our schools, 
and our factories. We urge this committee to consider an energy 
title to the Farm bill that can spur these clean energy 
development opportunities, especially wind power and biomass 
energy development.
    Thank you for the opportunity to appear today. We look 
forward to working with the members of the committee on the 
Farm bill.
    The Chairman. Thank you very much, Mr. Learner.
    [The prepared statement of Mr. Learner can be found in the 
appendix on page 174.]
    The Chairman. Now we turn to Dr. Barbara Glenn, member of 
the Board of Directors of the National Coalition for Food and 
Agricultural Research and Executive Vice President of the 
Federation of Animal Science Societies. Dr. Glenn.

        STATEMENT OF BARBARA P. GLENN, MEMBER, BOARD OF 
          DIRECTORS, NATIONAL COALITION FOR FOOD AND 
           AGRICULTURAL RESEARCH, AND EXECUTIVE VICE 
            PRESIDENT, FEDERATION OF ANIMAL SCIENCE 
                 SOCIETIES, BETHESDA, MARYLAND

    Ms. Glenn. Thank you, Mr. Chairman, for inviting the 
National Coalition for Food and Agricultural Research to 
testify. I am a member of the Board of Directors of the 
National C FAR, as you mentioned, in my role as Chairperson of 
CoFARM, which is the Coalition on Funding Agricultural Research 
Missions. We look forward as NC FAR to working with this 
committee.
    First, we want to thank the members of this committee for 
your support of food and agricultural research and education 
programs. We believe increased Federal support for food and 
agricultural research and education should be a key component 
of this committee's goal to develop sound food and agricultural 
policy.
    National C FAR is a newly organized, broad-based, 
stakeholder coalition of some 90 organizations. National C FAR 
recommends the doubling of Federal funding of food, nutrition, 
agriculture, natural resource, and fiber research, extension, 
and education programs during the next five years. This is to 
be net additional funding on a continuing basis that 
complements but does not compete with or displace the existing 
portfolio of Federal programs of research and education.
    Why should the Federal Government invest in food and 
agricultural research extension and education? We believe the 
answer is because the food and agriculture sector is 
fundamentally important to the United States, as we have heard 
this morning. It provides food, creates jobs and income, 
reduces the trade deficit, contributes to the quality of life, 
and bolsters national security. In addition, public financed 
research and education should complement private research by 
focusing in areas where the private sector does not have an 
incentive to invest.
    What have been the measurable benefits of Federal 
investment for American farmers and consumers? According to a 
recent analysis by the International Food Policy Research 
Institute, the average annual rate of return on public 
investments in food and agricultural research and extension was 
a whopping 81 percent, an extremely high rate of return by any 
benchmark. Additionally, as we know, advancements in 
agricultural productivity have led to enhancing the environment 
and the quality of life, especially linking good food to good 
health.
    Why should we double food and agricultural research? Well, 
there are three basic reasons, the way we see it.
    First, agricultural research and education can address many 
of today's pressing problems. World food demand is escalating. 
Some $100 billion of annual U.S. health costs are linked to 
poor diets and foodborne pathogens. Farmers are suffering from 
some of the lowest prices in over two decades. We need longer-
term approaches to assist farmers and retain value of their 
commodities. Other problems include threats to our environment, 
the escalating costs of energy, and the need for improved bio-
security and bio-safety tools to protect against bio-terrorism 
and dreaded problems, such as the foot and mouth and mad cow 
diseases and other emerging plant and animal pests.
    Second, Federal funding of food and agricultural research 
in the USDA, when measured in real, inflation-adjusted dollars, 
is less now than it was in 1978, so it has essentially been 
flat for over 20 years. Furthermore, currently, we only invest 
about one dollar of Federal funds in food and agricultural 
research for every $500 of consumer expenditures on food and 
fiber, a very low rate, indeed.
    The third reason, but perhaps one of the most important for 
doubling food and agricultural research is to capitalize upon 
the promising opportunities that advances in science and 
technology make possible, for example, the sequencing of the 
human plant and animal genomes. Taking advantage of these 
unprecedented bio-technological advances will require 
significant increases in research funding.
    Last, how should the doubled funds be spent? Well, there 
are several areas of opportunity. The National C FAR does not 
have a list of specific research recommendations. However, 
major areas of research and education opportunities have been 
identified by our members and related consensus-building 
coalitions and they are included in our written testimony.
    National C FAR emphasizes the continuing need to build the 
capacity to do quality research and education. We must maintain 
a balanced portfolio of Federal research and education 
programs, including competitive grants, formula funds, and 
intramural programs.
    With respect to current legislation, National C FAR 
recommends that, first, the basic authorization and provisions 
of the Agricultural Research, Extension, and Education Reform 
Act of 1998 be extended and incorporated in the new Farm bill.
    Second, an additional provision should be included that it 
is the sense of Congress that Federal funding of research, 
extension, and education be doubled over the next five years.
    Third, the provisions should be strengthened to expand 
stakeholder participation in identifying that research and 
education funding and the needs and opportunities.
    In conclusion, National C FAR hopes that we have convinced 
you that because of its primary role in serving all Americans, 
Federal investments in food and agricultural research should be 
doubled over the next five years. Again, we appreciate the 
opportunity to share our views. We look forward to working with 
you and members of the committee toward enhancing Federal 
support of food and agricultural research and education. Thank 
you.
    The Chairman. Dr. Glenn, thank you very much for that 
statement and for the more comprehensive statement you 
submitted to the committee.
    Ms. Glenn. Thank you.
    [The prepared statement of Ms. Glenn can be found in the 
appendix on page 180.]
    The Chairman. As I announced earlier, I would try to 
recognize Senators when they arrived for their statements, and 
Senator Lincoln has returned. I want to recognize our 
distinguished Senator from the State of Arkansas for her 
opening statement and any other comments she might wish to 
make. Senator Lincoln.

STATEMENT OF HON. BLANCHE LINCOLN, A U.S. SENATOR FROM ARKANSAS

    Senator Lincoln. Thank you so much, Mr. Chairman, and I 
apologize for interrupting such a distinguished panel. I do 
thank all of you all as witnesses for being here and working 
with us, your testimony that you have submitted as well as what 
you are giving.
    Mr. Chairman, I want to thank you so much for holding this 
important hearing and for getting this committee on track to 
rewrite a new farm bill. Of course, the short-term and the 
long-term are both very important to our agricultural producers 
in Arkansas. I would like to put a plug in for our supplemental 
appropriations and emergency assistance and also to put a plug 
for the AMTA payments that we will be providing, or hope to be 
providing, at a 1999 level and how crucial that is to ensure 
that our farmers are actually going to have the resources to be 
able to complete this agricultural production year. It is 
coming at an awfully late time for them and it is going to be 
absolutely essential.
    In terms of the long-term, Mr. Chairman, I am anxious to 
get to work on a new farm bill, because, frankly, our farmers 
need some relief from our current farm policy. For almost six 
years, our farmers have labored under a farm policy that is 
ill-suited for the pressures that global markets and poor 
weather can exert. That is why for each of the past 3 years we 
have sent back to our farmers a multi-billion-dollar emergency 
aid package.
    Freedom to Farm offered our farmers the flexibility to 
plant the crops they felt were most needed by the market. This 
was a fundamental component of Freedom to Farm, allowing our 
farmers for the first time in a long time to respond to a free 
domestic marketplace rather than to the government. Yet, 
Freedom to Farm did not give our farmers the tools to respond 
to a global marketplace that is influenced by the actions of 
foreign governments. This shortcoming reveals the FAIR Act's 
fatal flaw, the lack of an adequate safety net.
    The next Farm bill that we hope to produce, with your 
assistance, those of you all here today working with us and 
others that will contribute, should be built on these lessons. 
Planting flexibility should be retained. Our farmers must have 
the power to choose what they grow and when they grow it. This 
planting flexibility must be paired with some recognition that 
the policies of our trading partners can have as much effect on 
commodity incomes as any drought or flood.
    I believe my colleague from Arkansas, Senator Hutchinson, 
may have mentioned some of these issues in terms of trading 
partners and opening up those markets.
    We must encourage the expansion of our overseas markets 
wherever and whenever we can. As a member of the Senate Finance 
Committee, working with our chairman, Senator Baucus, I am 
committed to lowering trade barriers and providing our farmers 
with the leverage they need to push the global commodities 
market into the 21st century and seeing the U.S. as an absolute 
player in that. We must also provide a solid, reliable safety 
net. With a strong safety net, our farmers, our rural bankers, 
and the rural economy that depends on them will know they will 
have the support to weather the bad years.
    Senator Roberts in his opening statement alluded to some of 
those issues in terms of the fact that we are not just 
addressing the issues of producers and farmers, but to all of 
rural America. Rural America will also know that they can look 
to the coming years with confidence rather than with fear and 
uncertainty.
    The next Farm bill must also address other areas of 
importance for our rural communities. It should contain a 
strong forestry title that promotes sustainable forestry in 
this country, and it should recognize that our private forests 
provide everything from timber production, carbon 
sequestration, wildlife protection, recreation, and clean 
water. We need to remember that tree farmers are farmers, too. 
It just takes them longer to grow their crops than those of us 
that are used to traditional row crops.
    We should also remember the wisdom of conservation, and we 
appreciate, Mr. Learner, your input there. Whether we are 
talking about our farmlands or our wetlands, energy sources, 
bio-conversion, a multitude of options and opportunities that 
are out there, we must help our rural communities protect 
against the damaging forces of erosion and overuse, not to 
mention what it can do to help our income in rural economies 
and in producers by taking marginal lands out of production in 
ways that we have seen productive over the past several years.
    Finally, we must look down the road to the long-term needs 
of rural development. Many small towns are missing the 
financial support to develop their own resources. Often, the 
support that we offer does no more than help them struggle from 
one crisis to the next. We must provide better support for 
these communities so that they can build the necessary 
infrastructure to grow rather than simply to survive.
    Mr. Chairman, all over the country, our rural communities 
are collapsing. Virtually every commodity is suffering. It is 
high time that we got to work on a new farm bill. I thank you 
for your leadership, for the ranking member, Senator Lugar, for 
his willingness to work with us on this, for both of your 
patience as well as the unbelievable institutional history and 
wisdom that we have on this committee to be able to make this 
process a huge success. I stand with you and ready to work hard 
and we, too, appreciate all of the input that you all as our 
first panel of witnesses and the many individuals that will 
have a great deal of input into this very, very important 
process and the product that we will produce for the American 
people. Thank you, Mr. Chairman, very much.
    [The prepared statement of Senator Lincoln can be found in 
the appendix on page 75.]
    The Chairman. Thank you for a very eloquent statement, 
Senator Lincoln, and I look forward to working with you in 
developing this legislation.
    Now we will turn to my neighbor to the West--Mr. Fitzgerald 
is my neighbor to the East. Now my neighbor to the West, our 
former great Governor of the State of Nebraska, now Senator 
from my neighboring State of Nebraska, Senator Ben Nelson.

   STATEMENT OF HON. BEN NELSON, A U.S. SENATOR FROM NEBRASKA

    Senator Nelson. Thank you, Mr. Chairman, and Senator Lugar, 
I appreciate your work, as well. I want to thank you for 
convening this hearing this morning. I apologize also for being 
later getting here and certainly hate to interrupt the 
panelists.
    It is good to be with you today and I really look forward 
to working on this important committee and I hope to be a part 
of it when the organizing resolution is accomplished. I hope I 
will be able to rejoin it.
    Of course, moving forward on the new Farm bill is my top 
priority for agriculture and it is of critical importance not 
only to farmers in Nebraska, where it is extremely important, 
but also to our rural communities and the economy of our entire 
State and the economy of almost every rural State. With one of 
every four jobs in Nebraska dependent on agriculture, we 
clearly have a lot at stake.
    Chairman Harkin, let me commend you for focusing on some 
issues in this hearing today that don't often get as much 
public attention in the Farm bill and in the debate as they 
ought to--rural development, nutrition, research, and the three 
``F''s I talk about so often, food, fiber, and now fuels, 
oxygenates, alternative sources of energy.
    This piece of legislation is the closest thing we have to a 
rural America policy, and as Mr. Fluharty points out in his 
testimony, only 6 percent of rural Americans live on farms and 
less than 2 percent of the rural population is engaged in 
farming as a primary occupation. It is still a rural America 
issue.
    Many of our rural communities are withering away, and as a 
former Governor, I can attest to the huge impact that that has 
on our State. I am pleased to see that many of our witnesses 
today are talking about some of the policies that affect the 
rural areas, as well as directly affecting farmers and 
ranchers.
    Mr. Chairman, as you are well aware, I am eager to work 
with you and help hold whatever necessary hearings and to get 
to work on crafting our new farm bill. That is what I have 
heard from one end of the State of Nebraska to the other end of 
the State, and I appreciate the urgency, as I know you do and 
the members of this committee appreciate the urgency. I thank 
you for getting us started. I want to be brief, but I look 
forward to working together in the upcoming months. Thank you 
very much.
    The Chairman. Thank you very much, Senator Nelson. I look 
forward to working with you on this important legislation.
    Now we will turn to Sharon Daly, Vice President for Social 
Policy. Ms. Daly provides overall direction to Catholic 
Charities USA's legislative efforts and leads its work on 
welfare reform and Federal budget and tax issues. Welcome, Ms. 
Daly.

  STATEMENT OF SHARON DALY, VICE PRESIDENT FOR SOCIAL POLICY, 
          CATHOLIC CHARITIES USA, ALEXANDRIA, VIRGINIA

    Ms. Daly. Thank you very much, Mr. Chairman, for this 
opportunity to testify about the key role of the food stamp 
program. Catholic Charities USA represents 1,400 independent 
local agencies with a quarter-of-a-million staff and volunteers 
who serve ten million people a year. They provide every kind of 
social service, but the single most frequently needed service 
is emergency food, so we have very strong views about the food 
stamp program.
    My first point is that, until recently, the food stamp 
program has been a resounding success in reducing hunger among 
families with children. Over the last three years, even though 
earnings for low-income workers actually declined when adjusted 
for inflation and welfare payments went down dramatically, 
childhood hunger declined because of the food stamp program, 
the WIC program, school nutrition programs, and the Earned 
Income Credit.
    The food stamp program has always had strong bipartisan 
support with great leadership by Senators Harkin and Leahy and 
Lugar, and, of course, Senator Dole, who is in our prayers 
today.
    My second point is that even though there is less hunger 
now than 30 years ago, there is still far more than a rich 
nation should tolerate, and as food stamp rolls have declined 
recently, hunger is again on the rise. We begin with the 
premise that here in the United States, the strongest economic 
powerhouse in human history, that parents working full-time 
should earn enough to support their children in dignity and 
should not be reduced to begging for food for their children. 
That is the fact for millions of Americans, and not just 
occasionally, but regularly.
    Despite the high employment rates, record profits, and 
stock market highs, wages at the bottom of the labor market 
have stagnated, especially compared to the higher costs for the 
basic necessities, like rents, gas and electric, and gasoline. 
The working poor are forced to swallow their dignity and rely 
more and more on handouts from charities.
    Now, the lack of affordable housing is the single biggest 
culprit, but the outdated and outrageous rules of the food 
stamp program are close behind. Just like Senator Conrad's 
chart about the farmers, the working poor in America are paying 
more and getting less.
    The experience of Catholic Charities agencies in every 
State is they report steady increases in need for emergency 
food of 20 percent or more each year since 1996. Meanwhile, 
participation in the food stamp program was dropping by more 
than seven million people. We think there is a connection. Most 
of the increased need has been among working families with 
children, the very same group who have been dropped from the 
food stamp program. In fact, nearly two-thirds of the families 
leaving welfare-to-work were dropped from food stamp within six 
months, even though they were still poor enough to qualify for 
and need food stamps.
    Twenty-five years ago, it was rare for working parents to 
show up at churches looking for food unless a death in the 
family or a fire left the family without food or money for 
food. Now we have a nationwide network of emergency food 
programs trying desperately to cope with chronic emergencies, 
emergencies of low wages, high rents, and no food stamp 
benefits.
    I am not suggesting that the food stamp program alone can 
solve the problem. We need increases in the minimum wage and 
more affordable rental housing. The food stamp program could do 
a much better job. Unfortunately, the program operates on three 
outdated assumptions.
    The first is that low-income families can afford to spend 
30 percent of their incomes on food, and food stamp benefits 
are calculated to fill the gap between the cost of the lowest-
possible-cost diet and 30 percent of family income. In fact, 
only one-fourth of low-income households get any housing 
subsidy, so three-fourths are now paying rents that consume 50, 
60, and 70 percent of their incomes. A parent working at or 
near the minimum wage with take-home pay of only $800 or $900 a 
month has to pay about $700 a month or more in rent, and that 
is before utilities, leaving not enough for food.
    Our first recommendation is to adjust the food stamp 
program to the reality that the majority of food stamp 
households can't afford more than 15 or 20 percent of their 
incomes for food.
    The second outdated assumption is that most recipients only 
need help temporarily. The benefit structure is based on a diet 
that is minimally adequate for short periods. Unfortunately, 
families need help for years. The very people who create the 
conditions that give the rest of us a decent quality of life 
through their work in nursing homes and cleaning office 
buildings and serving food are expected to survive on long term 
on a diet that is officially ``minimal''. America's children 
are being nurtured on a diet that is like prisoners' rations.
    Our second recommendation is to adjust the food stamp 
program to the reality that people are not going to be able to 
get off food stamps quickly.
    The third outdated assumption is that people who need food 
stamp are on welfare or unemployment insurance and can spend a 
full day every few months at the food stamp office, once again 
filling out a 26-page application and supplying 14 kinds of 
verification and enduring the condescension of the eligibility 
worker. In some States, Mr. Chairman, it is easier to pass the 
bar exam than to get certified for food stamps.
    Today, in the typical household, the adults have jobs that 
do not provide time off, and a visit to the food stamp office 
means sacrificing a day's pay and risking their jobs. In many 
States, working parents have to reapply for food stamps every 
three months. It is no wonder that less than half of the 
eligible households are participating in the program.
    Our third recommendation is to recognize the reality that 
low-paid workers are the largest group of eligibles and to 
allow families who are leaving welfare-to-work to automatically 
be enrolled in food stamp for a full year without additional 
paperwork and to allow other low-wage workers to apply for food 
stamps on a simplified form by mail.
    We are also concerned about welfare recipients who are now 
reaching their lifetime limits and will depend more on food 
stamps than ever. About a third of these parents have severe 
physical and mental disabilities or care for a parent or a 
child who is disabled. Eventually, they are going to qualify 
for an exemption or some kind of disability payment, but 
meanwhile, the food stamp program is the only thing standing 
between them and starvation.
    We need a comprehensive communication strategy to inform 
parents that their food stamp eligibility does not end with the 
TANF time limit. The committee should require States to conduct 
outreach and education campaigns to maintain that food safety 
net.
    Congress should not be misled. The religious and community 
organizations that feed the poor now are already stretched 
beyond their capacity. The cupboard is almost bare.
    In addition, Mr. Chairman, I would like to mention once 
again to this committee that it is important to restore 
eligibility to food stamps for immigrants who are legally 
present in this country and are working incredibly hard. I was 
disappointed that I didn't hear the word ``farm worker'' in 
anyone's statement so far, member or witness. We heard about 
farmers. We heard about growers. Nobody mentioned farm workers.
    The Catholic Bishops' Conference and Catholic Charities USA 
and the National Rural Life Conference recently began a series 
of listening sessions on agriculture issues and they will be 
listening to testimony on research and on conservation and on 
problems of small farmers, all of those important issues. They 
also have already heard some important testimony in Sacramento, 
California, last week about farm workers, and Mr. Chairman, the 
plight of farm workers is just as bad as it was when Cesar 
Chavez began organizing in the 1960's. I urge you to hold a 
hearing to look into what is happening to America's farm 
workers, who are being exploited, dehumanized, and treated like 
commodities.
    Mr. Chairman, I also want to flag another issue for you, 
which is WIC appropriations. As you know, the administration's 
request is insufficient for this coming year and if the 
Congress does not add $110 million to the administration's 
request, WIC offices will have to turn away perhaps as many as 
200,000 children next year, so we urge you all who care about 
WIC to help make that additional $110 million happen.
    Mr. Chairman, thank you so much for the chance to testify 
and to raise issues that are just as important as all the other 
agriculture issues.
    The Chairman. Thank you very much, Ms. Daly, for reminding 
us that the Farm bill needs to be comprehensive and the food 
stamp portion is one vital part of this bill that we are going 
to address. Your suggestions are right on target. We are going 
to be looking at that and I assume we will be in contact with 
you further on this issue.
    [The prepared statement of Ms. Daly can be found in the 
appendix on page 199.]
    The Chairman. I am told that there is a vote supposedly at 
11:50 or 11:55. We have one more witness. If we have time for 
questions, we will do that and we will move into that. If there 
is a vote, then I assume we will just adjourn, and because of 
the late hour, we will not return.
    Now we will turn to Mr. Dave Carter, Secretary-Treasurer of 
the Mountain View Harvest Cooperative, Longmont, Colorado.

  STATEMENT OF DAVID E. CARTER, SECRETARY-TREASURER, MOUNTAIN 
              VIEW HARVEST COOPERATIVE, LONGMONT, 
                            COLORADO

    Mr. Carter. Thank you, Mr. Chairman and Ranking Minority 
Member Lugar and members of the committee. I am indeed honored 
to testify before you today. I am here in my capacity today as 
the Secretary-Treasurer and board member of the Mountain View 
Harvest Cooperative, which is a producer-owned bakery in 
Northern Colorado that is owned by 225 Colorado wheat farmers. 
I want to tell you very briefly the story of Mountain View 
Harvest and then use that to illustrate some of the things that 
we think need to be included in particularly the rural 
development title of the new Farm bill.
    It was in early 1994 that I had an opportunity to join a 
small group of producers, all of whom were part of an old-line 
traditional grain origination cooperative that had gone 
bankrupt in the 1980's, but it was a group of producers who 
wanted to take a look at reestablishing a presence, a 
cooperative presence in Colorado for particularly grain 
marketing. We went through the summer of 1994 and talked about 
various ideas and began to think that perhaps we ought to look 
down some other avenues, and in September 1994, we received a 
$100,000 grant from the U.S. Department of Agriculture to 
conduct feasibility work.
    That gave us the ability to hire some professional 
expertise to come in and take a look at marketing 
opportunities, 14 different areas of potential marketing 
opportunities for Colorado producers. We looked at everything 
from grain origination and gluten to pizza dough and pretzels. 
What we identified were some emerging opportunities in a 
segment of the baking industry particularly known as par-bake, 
or partially baked bread. You take the dough, you mix it, you 
let it rest and rise and you bake it about 90 percent of the 
way. You sell it to a customer. They pop it in the oven and 
tell everybody they make their own bread. This is a growing 
part of the industry and it represented a real opportunity.
    Well, following that feasibility study, then we were also 
fortunate enough to receive a $25,000 no-interest loan from a 
for-profit subsidiary of a non-profit organization that allowed 
us to bring on three individuals, an investment advisor, an 
accountant, and an attorney, to really go through and do the 
due diligence and to develop a business plan for the operation 
of this new cooperative. In that process, we were able to 
locate that there was an existing bakery in Northern Colorado, 
a modern facility that might be available for purchase.
    We entered into some negotiations and reached an 
arrangement that we knew would require us then to generate $5 
million to finalize that purchase. We developed a plan in which 
there would be 400 shares of stock at $12,500 apiece to 
capitalize this new cooperative. Now, not too many farmers have 
got $12,500 laying around in the kitchen drawer, and that is 
why it is so critical that the local Farm Credit office stepped 
up to the plate at that time, and they put together a signature 
loan program in which producers, qualified producers, could go 
in and borrow the money to make their equity investment in that 
cooperative.
    With that program in hand and with the business plan in 
hand, we were able to go to the countryside and market the 400 
shares to 225 producers, and on April 15, 1997, we closed the 
purchase of Gerard's French Bakery in Northern Colorado. It was 
a $6 million bakery at the time we purchased it. Last year, the 
annual sales topped $17 million. We are the national supplier 
to a well-known sandwich chain as well as a regional supplier 
to several restaurants, and through a joint venture with 
another cooperative, we are in the retail business.
    The growth has been a blessing, but it has come with some 
challenges. Unfortunately, we have not been able to pay the 
dividends that we would like to with our members because we 
have been forced to try and fund the growth through internal 
profits, but we feel that we are building a very successful 
business.
    Well, that is the Mountain View Harvest scenario. I have 
also been involved with some other cooperatives, including one 
in Southern Colorado/Northern New Mexico that involved 110 
limited resource ranchers that had an idea of putting together 
a certified kosher beef processing cooperative. They had a much 
different experience. They didn't have the feasibility 
resources. They didn't have an institution that stepped up to 
the plate. They were under-capitalized. They had inexperienced 
management and it had severe difficulties before shutting down 
in 1997.
    In taking a look at those two experiences, as well as other 
emerging cooperatives, and Senator Roberts, I had an 
opportunity yesterday, for example, to visit with Kent Sims of 
the American White Wheat Association and their process, and so 
that has led me to the recommendations that there are five 
particular areas that we think would be very helpful in the 
rural development title.
    No. 1 is we simply need to have more money available for 
feasibility studies. That $100,000 that was used by Mountain 
View Harvest was critical in keeping us not only on the right 
path, but keeping us from pursuing some other alternatives that 
we thought were very attractive, but in the analysis would have 
been an absolute disaster.
    Second, we need to have more funding through the Rural 
Cooperative Development Grant program. We are very fortunate in 
our area to have a Cooperative Development Center, and other 
States are equally as fortunate. If you look at the map, there 
are some black holes, and we think that every State ought to 
have adequate funding to have a Rural Cooperative Development 
Grant Center in their State to provide those resources and the 
technical assistance that are necessary for successful 
development.
    Third, the Business and Industry Loan program needs to be 
strengthened and expanded. We think that that is a good 
concept. When Mountain View came along, we didn't have that 
program in place to help producers borrow the money for their 
equity shares. B and I is supposed to help us do that. It is 
not working quite as well as envisioned. It needs to be 
retooled.
    One of the things that is very important is we also need to 
recognize that the real emerging opportunities in cooperative 
development may come from acquisition rather than a new 
startup. Many times when you go into an acquisition, what you 
end up buying are blue sky, customer lists, the distribution 
routes, markets, and those are extremely valuable, but they are 
not the type of assets the lenders like to use as collateral. 
They aren't bricks and mortar, and so we need to make that 
change.
    Fourth, we need to expand the Value-Added Grant program. 
The $60 million in requests that were in for this round that 
were just announced, the $10 million in funding demonstrate 
that there is a tremendous pent-up demand, and that can be very 
successful in helping new co-ops get across the threshold of 
the organizational stage and into the operational stage.
    Then, fifth, we feel that the new Farm bill ought to direct 
Federal institutions to expand the purchases of food that they 
make from farmer-owned cooperatives and minority-owned 
businesses. We feel that that could provide a demand pull that 
could provide a consistent customer that can help the 
cooperatives move into new areas.
    Mr. Chairman and Senator Lugar, Senator Roberts, those are 
five recommendations. We feel that this is critically 
important, because not only are cooperatives and farmer-owned 
enterprises going to be important in the food and fiber sector, 
but as has been mentioned repeatedly, the demand for energy is 
going to create new opportunities for farmer-owned 
cooperatives.
    I would like to just end with a comment that summarizes 
many of the comments here today. In the final analysis, safe, 
healthy food and reasonable, reliable energy all begin with 
secure, profitable farm and ranch families. Thank you very 
much.
    The Chairman. Thank you very much, Mr. Carter.
    [The prepared statement of Mr. Carter can be found in the 
appendix on page 205.]
    The Chairman. I want to thank all of the panel for your 
patience and willingness to be here and to sit through a long 
morning. As I said in the beginning, your testimony is most 
valuable and I am certain that we will be in contact with you 
through our staffs for further development of your thoughts and 
your suggestions. I assume that we will probably see some of 
you back here again as we have more hearings in July and on to 
however long we have to go to get this thing put together.
    We do not have a vote yet. What I will do is I will just 
ask one question and then I will turn to Senator Lugar and then 
Senator Roberts and maybe we can go for as long as until we 
have a vote here.
    I first want to turn to our two individuals that represent 
the broad-based farm organizations, the Farm Bureau and the 
Farmers Union, to just, again, ask a little bit more of a 
development in your thinking on the situation we have now in 
terms of farm income and stocks on hand and what we need to do 
in terms of a countercyclical program. Both of you mentioned 
countercyclical and I am not certain I know exactly how we are 
going to move ahead on that countercyclical program. We talk 
about countercyclical, but I will bet a lot of us have 
different ideas on what that really means. If you could just 
elaborate a little bit, both of you, on where you think we 
ought to be headed on a countercyclical type of a support 
program.
    Mr. Swenson.
    Mr. Swenson. Thank you, Mr. Chairman. It is a very good 
question. No. 1, it is clear now in the filing with the WTO 
that AMTA payments as such are going to be classified as amber, 
and so taking that into consideration, as we take a look to the 
future, how do we structure an appropriate safety net?
    First of all, we would stress equity, equity in the support 
mechanism among all commodities.
    Two is that if we are going to maintain, as we believe we 
should, planting flexibility to allow producers to plant 
whatever commodity they may wish, we believe that the 
countercyclical then should be tied to commodity specific. That 
is why in our proposal we have gone away from any just payment 
regardless of payment and just to produce and produce, is that 
we tie our support to the actual commodity via an adjustment 
within the commodity loan rate. We do not believe that will 
then----
    The Chairman. A marketing loan?
    Mr. Swenson. The marketing loan, the loan program. That 
will not distort what happens in the market because we maintain 
the marketing loan program, the non-recourse element so that 
the commodities have that choice to flow into the market. It is 
just a protection via the loan rate if that commodity price 
goes low. It serves as a countercyclical, but it is tied to 
what a farmer chooses to produce today.
    Then you have the protection of not being able to produce 
by participation, No. 1, in the crop insurance program, which 
has been enhanced, and two, in the crop protection program that 
we have outlined in our proposal.
    The Chairman. Thank you very much. Mr. Stallman.
    Mr. Stallman. Well, you are right, Mr. Chairman. There has 
been a lot of discussion about countercyclical and probably not 
enough definition at this point, although we are moving toward 
a little better definition. I would disagree with my colleague 
that AMTA payments are going to be classified as amber box in 
the future. That notification specifically referred to the 
supplemental assistance payments, and also it was classified as 
a de minimis payment under the amber box provisions, which in 
essence means it does not count against our $19.1 billion cap.
    Having looked at countercyclical ideas in terms of 
programs, if you look at what the Congress has done the past 
three years, in essence, that has been countercyclical. 
Although it has been on an ad hoc basis, it has been very much 
appreciated and needed. We looked at ways to structure a 
system, a payment system that would more or less mimic what the 
Congress did in response to low prices, where payments would go 
out in low-price periods. Then when prices improved, those 
payments would not go out.
    We think in looking at the agreement on agriculture under 
the WTO that as long as you meet certain provisions of that 
agreement, one can be structured green box and still be 
countercyclical. It would not be tied to an individual producer 
and their individual situation, because when you tie it to 
production, current production, that, by definition, is going 
to make it amber box.
    Our example in there, we believe would be classified as a 
green box. Obviously, no one would know until there was an 
actual WTO dispute case because no one gives you pre-clearances 
with respect to whether a program is amber box or green box. It 
can be done, but it will have to be crafted, and in the end, it 
may not satisfy enough of the objectives of producers or 
Members of Congress, but we will have to see, we are working on 
it.
    The Chairman. Thank you both very much. We will explore 
this further as we go along on the countercyclical.
    Senator Lugar.
    Senator Lugar. Thank you very much, Mr. Chairman. I just 
wanted to comment on several things just briefly that came up 
in the hearing today that require some thought and, hopefully, 
some incorporation.
    Specifically, Mr. Learner, in your testimony, in addition 
to advocating more efficient use of electricity in the country, 
and you suggest a number of changes in which large corporations 
in this country that are producing appliances and various other 
things could make sales of those to a willing public that would 
adopt them and use less electricity, and ideally, some Federal 
energy policy may come along that gives some push to that.
    Specifically with regard to agriculture and your third 
recommendation, you call for a Federal renewable portfolio 
standard that requires all retail electrical suppliers to 
include a specified percentage of renewable energy resources. 
That would steadily increase from 8 percent in 2010 to 22 
percent in 2020, and you specify three specific kinds of 
energy, wind power, solar power, and closed-loop biomass energy 
as the ones to qualify, and you would exclude various others.
    In the closed-loop biomass energy, describe what that is 
and how that applies to farmers and producers.
    Mr. Learner. That includes what most of us call biomass 
energy of farm crops, be it corn waste, be it switchgrass, or 
be it alfalfa. What we are trying to get away from here is the 
battle over incineration versus what most people consider 
biomass energy. There is tremendous public support for 
developing biomass energy, both to help out farmers and reduce 
pollution. There is a different public view when it comes to 
incineration. Closed-loop means you keep it within the system.
    Senator Lugar. As you know, I have advocated annually 
research funds for this purpose. Senator Harkin has been a 
strong advocate. Each year, we have watched House appropriators 
slice this into small pieces. Even if it survives at places 
like Purdue or Iowa State or so forth, the ability, or at least 
the willingness of people who supply energy to incorporate 
these ideas out of our university laboratories has been very 
limited. I have tried to follow this or trace it, piece by 
piece, as to how it might get out there. Obviously, this is a 
very big idea. An administration, any administration, 
Democratic or Republican, who finally took energy seriously 
would have adopted this a long time ago and moved down the 
trail, as opposed to leaving the vulnerability that we have.
    Essentially, you are asking in this Farm bill, as I see it, 
for us to undertake that. In other words, we, as an 
authorization committee, would mandate that this occur. 
Clearly, some other committees are going to say, well, we have 
some interest in this, maybe in jurisdiction. You folks are 
supposed to be dealing with farmers, producers, farm workers, 
food stamp recipients, and what have you, but not the energy 
problems of the country. Fundamentally, that is what we are 
doing here. I like the idea, obviously. I am trying to sketch 
in my own mind's eye how we do it, how we make it stick, how 
something like this happens.
    Mr. Learner. Clearly, energy issues cut across committee 
jurisdiction lines. There is no way around that. The production 
tax credit, for example, extension of which is very important, 
would not fall appropriately within this committee's 
jurisdiction, and that is key to biomass energy production, 
especially closed-loop, as well as for wind power and solar 
power development.
    I am not suggesting that this committee take up the whole 
of energy policy, but, rather that a rural-focused energy title 
is very appropriate as a part of what this committee does in 
the Federal Farm bill, and there are steps that can be taken in 
the Farm bill that would seriously advance biomass energy and 
wind power energy. The Conservation Energy Reserve Program, 
patterned after, in many ways, the Conservation Reserve 
Program, falls quite comfortably within the Federal Farm bill 
parameters.
    Where a renewable portfolio standard goes is an interesting 
jurisdictional question. Clearly, Senator Jeffords, who has 
sponsored a bill, might have some views on the appropriate 
committee. It is also appropriate for consideration by this 
committee here.
    Going to your point about the link between developing 
biomass energy and bringing that clean energy to consumers, 
that is why the renewable portfolio standard is so important. 
If all retail electricity suppliers are required to include a 
reasonable percentage of renewable energy in the power they 
deliver to consumers, that would encourage biomass energy 
development and pull it into the market.
    Ten years ago, this may have been visionary and simply 
interesting. Today, it is on the front burner, for national 
domestic energy policy, and as you have eloquently written, as 
a matter of foreign policy and security as well.
    Senator Lugar. I thank you, and perhaps you can help us 
with some language that will guide that section, because it is 
an important concept.
    Mr. Learner. Senator, we would be pleased to work with you 
and your staff.
    Senator Lugar. May I ask just one more question of Mr. Cox? 
In your report, and it is a very important document, ``Seeking 
Common Ground for Conservation,'' which you mentioned from the 
previous hearing, but let me just mention, on page 38, you have 
some provocative ideas, one of which is that the combined 
effect of crop insurance premium subsidies would add 900,000 
acres to aggregate plantings of eight major field crops--this 
is a USDA Economic Research, ERS, estimate--that marketing loan 
benefits have added four million to five million acres to the 
total U.S. acreage planted to eight major field crops, and you 
go on to point out that crop insurance has the other benefit, 
or liability, of keeping fragile lands in production.
    Now, the effect of this, as some of us have pointed out, is 
that we are attempting to do some things that help farmers and 
they get income out to farmers and a lot more of that has been 
suggested today. The net effect of that also is to increase 
plantings, to increase production, to increase supply. At the 
very time that we are worrying about countercyclical, we are 
pushing up the amount of supply and pushing down the price, and 
the price is inevitably going to remain low so long as we have 
policies that encourage people to plant more, a whole lot more, 
and really ensure the income of doing so.
    These thoughts innocently placed on page 36, or maybe not 
innocently enough, simply point out that we have got a problem. 
We are working both sides of the coin. If I had a dollar for 
everybody I have heard today say we want full flexibility, 
Freedom to Farm, everybody making their choices, but we want a 
lot of money for farmers, even though Freedom to Farm may mean 
prices go down, stay down, we do not export and they stay down 
further.
    Now, in the midst of all of that, you can spend a lot of 
money and still, in fact, get net income on farm investment up 
to a very minimal figure. What you are suggesting is a 
different approach, and that is, essentially, you get income to 
farmers for being stewards of the land, and that helps a lot of 
small farmers as well as large farmers. It is sort of 
indiscriminate on that basis, so we are not into a class 
warfare clash that hits us frequently in these hearings.
    I would just say, more power to you. It is an excellent 
suggestion. The question would be how much of the resources 
given to this committee by the 10-year budget, or whatever 
budget we are working on, are to be allocated to conservation 
and to the sorts of things you have suggested, as opposed to 
income supplements or countercyclical funds or so forth.
    I don't know the answer to that, but this is a good entry 
into the field, at least as the competition for those resources 
begins. I do not have a question, I just commend you, and 
likewise Mr. Fluharty and Mr. Carter, really, for another facet 
of the fact that we are talking about agriculture development 
because we are talking about rural America and less than 20 
percent of our counties even have 20 percent of their income 
coming from farming that are in agricultural territory, which 
means 80 percent have very, very little visible support from 
anything in the production side.
    Now, maybe that is not the jurisdiction of this committee, 
either, in other words, to take on the demographics of the 
whole country and try to shore up farm country. If not us, who? 
We are trying to get back to that predicament, so we probably 
should tackle it, even with the potential of others interloping 
in or making amendments and suggestions.
    I appreciate all of your testimony. It is very, very 
helpful in terms of a new vision for a farm bill as we try to 
take a look at all of the persons who are affected, including 
the rural poor. Ms. Daly has made a very good point. She has 
mentioned farm workers, and so has Senator Harkin and so will 
I. They are a very important facet, in addition to the 
recipients of the food stamps.
    I thank you, Mr. Chairman, for indulging me these extra 
minutes.
    The Chairman. No, I am delighted to hear it. I am tracking 
with you on exactly what you are talking about. That is going 
to be one of the real challenges of this Farm bill, to put this 
together with that methodology, but you are right. We are 
really going to have to look at rural development and how we 
get those funds out there in the rural development sector, and 
a lot of these people talked about that, too.
    I recognize Senator Roberts.
    Senator Roberts. Mr. Chairman, I ask unanimous consent that 
the committee now report the current Farm bill, that we double 
existing program funding for all nine provisions and establish 
farm prices at parity levels, and that farmers are allowed to 
farm as determined by Purdue University.
    [Laughter.]
    The Chairman. It is nice having you on the committee.
    [Laughter.]
    Senator Roberts. There is a workshop that is going on right 
now with the distinguished National Association of Conservation 
Districts, since we are talking about conservation, Kansas 
State University, home of the ever-optimistic and Fighting 
Wildcats, the University of California, Iowa State, and the 
speaker is me. I began speaking about five minutes ago. I do 
not know what is going to be on the floor, but instead of 
asking specific questions, if I could be permitted to list some 
concerns, other than the concern I have of the former 
distinguished chairman's comments as to where we should farm 
and not farm.
    Leland, a loan rate based on 80 percent of the cost of 
production, and I am assuming you are referring to a national 
cost of production as opposed to individual producers, the year 
is 1981. As you remember, the deficiency payments at that 
particular time and the loan rate were pretty much tried to 
figure out on a national cost of production. The first 
amendment that this member ever got passed in the House 
Agriculture Committee was a Cost of Production Board, a 
producer Cost of Production Board, and Bill Turentine from 
Garden City, Kansas, America, was the chairman and Bill Lesher 
had to put up with him when he worked down at the Department of 
Agriculture. We had people from all sections from the country 
and they had what I call meaningful dialog for the greater part 
of a year trying to figure out cost inputs, different regions, 
and different commodities.
    I do not know if that is possible, but it seems to me that 
something out of the Department of Agriculture a little more 
specific as to the cost of production would be helpful, 
regardless if we feel we want to go down and make the loan rate 
an income protection device as opposed to a market-clearing 
device. It is an interesting comment and I would like to visit 
with you further about that.
    Then in addition, one of the problems or one of the 
challenges we have is we have learned in the past, or at least 
our producers out in Kansas will set aside their most marginal 
land and they increase the inputs on their more productive land 
when we go to something like flex-fallow, and that has always 
been a concern, not to mention that our competitors increased 
their production by more than we set aside. Bob, you have got a 
good statement on that in your statement. That is something we 
have to consider.
    Then again, you indicate, Leland, that we need to target 
benefits to small and moderate-sized farms. Congressman Tim 
Penny and I used to go into this at considerable detail and we 
finally both thought that the small family farmer is somebody 
five-foot-two who farmed up in Vermont, and that a large family 
farmer was somebody six-foot-two that had about, what, 5,000 
acres in Kansas.
    [Laughter.]
    Senator Roberts. I really have some concern, having the 
Department of Agriculture or anybody else trying to define who 
is a small family farmer and what is a small family farm. It 
would be an interesting debate.
    One other concern. Bob--well, I am going to leave the green 
and amber business to the House Agriculture Committee.
    What would you do--in terms of Farm Bureau members, is it 
more important for your members to maintain the soybean loan 
rate at $5.26 or to reduce it, if necessary for budget reasons, 
in order to establish an AMTA payment or a PFC payment for 
soybeans? Is there a choice? I know you want both. I know 
everybody wants both. I don't know of anybody here that did not 
say, I want an increase in my budget. I understand that because 
you represent outstanding programs. Anyway, think about that a 
little bit. It may have to come to that.
    You are recommending $8 billion per year. Is that just in 
commodity program spending or does that include other important 
programs, i.e., exports, rural development, and conservation, 
over the $7.3 billion that is in the budget? Does that $8 
billion include all of that?
    Mr. Stallman. Well, it included the prioritized list out of 
our original $12 billion, which included those other 
components. The board decided that $8 billion should be focused 
on more of the direct income support programs as opposed to the 
other, although we say, if we can get additional funding, we 
need to have those others. It was prioritized that way.
    Senator Roberts. All the commodity groups and the farm 
organizations have indicated--well, almost all, I cannot think 
of anybody that thinks the current budget is enough, and it 
goes from your recommendation of $8 billion, Your original 
recommendation was $12 billion, and we have some up to $14 
billion. I would point out, over a 10-year period, that is not 
$73 billion, it is $101 billion up to $137 billion. I don't 
know. I don't mean to be Scrooge around this place, just the 
opposite, as far as I am concerned. We have to really think 
about where we are headed in total.
    Mr. Cox, you have, and this is just a concern of mine and 
Senator Lugar and I have had a lot of dialog in this regard, 
CRP seems to be concentrated in several States in the Plains 
area and should be moved throughout the country. I remember 
being shown a red map and a blue map, at Purdue, by the way, 
where on the blue map, it showed, obviously, that Kansas and 
the Great Plains had a significant amount of funding on CRP. 
After all, it was our bill. I authored it. I thought it might 
be appropriate if we would do that. Then there was a red map.
    Purdue is saying, in other sections of the country, we have 
vital resource needs, and that is true. I said, why don't maybe 
you get a supplemental instead of taking money from us for you? 
If we don't have CRP, I would remind you of the sodbuster days 
in the 1930's and all of that, and I don't think we want to go 
back to that.
    That should be a concern, and that really speaks to the 
effort. We have to work together as opposed to robbing Pat to 
pay somebody else. I would remind everybody that soil is the 
greatest non-toxic, I guess, pollutant that we have.
    Now, Mr. Chairman, I had a whole series of concerns here, 
but in the interest of time and the interest of getting down 
the road and making my speech and sparing you the agony of 
listening to me, I want to thank every witness especially for 
coming all this way and taking your time, your very valuable 
time, to give us your suggestions and your proposals. I don't 
know how we do it all under the budget restrictions we have, 
but each one of you have dedicated a great deal of time and 
effort in this enterprise and I thank you for your testimony, 
and I thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Roberts, and 
believe me, it is always a delight to listen to you, always. We 
may not always agree, but it is a delight to listen to you and 
to hear your views, and again, the long history and knowledge 
of our agricultural programs.
    I wish we had more time, but now a vote has started, to get 
into more questions. I had some on the food stamp program and 
the whole new system of using plastic rather than the stamps 
itself and how that is working out, but we will get back to 
that in future hearings.
    Again, what we see from this panel is the diversity of the 
issues that confront us. Regarding a couple of those issues in 
terms of energy, I noted carefully and wrote down carefully all 
of the comments made by the members of this committee, and 
almost everyone mentioned something about the energy issue. I 
believe there is going to be some consensus here, at least to 
do something in that area.
    Senator Lugar, of course, has pointed out the 
jurisdictional problems. It is unclear as to what jurisdiction 
we have and what we can do under our jurisdictional 
constraints, and, of course, under the budget constraints, 
also. I will just speak for myself in saying that I don't mind 
pushing the envelope a little bit on the energy issue. If other 
committees are not addressing this in terms of what it means to 
rural America, then we should. We will just have to, perhaps, 
duke it out with some of the other committees later on. We 
ought to go very aggressively down this road. Whereas there may 
be some disagreements on other aspects of agricultural policy, 
this is one on which we might find some pretty broad-based 
agreements.
    Also on conservation, I note that there is at least a 
desire to move beyond the old land reduction CRP, taking land 
out, but to do something about providing some support for 
farmers on working land. I picked that up from a lot of the 
comments, also.
    On the research end, I just want to say, Dr. Glenn, of 
course, this is something that is going to be vitally 
important. You can rest assured that we are going to continue 
our support for a good sound agricultural research system here.
    Again, when it comes to energy and value-added products, 
cooperatives hold a great promise for helping farmers get more 
of that consumer dollar. I just close my comments by saying 
that, right now, the farmers are getting the lowest share of 
the consumer dollar ever in history. That won't be made up by 
government payments. It has got to be made up through some way 
of getting more of that value-added from the crops that they 
produce, and the cooperatives in terms of energy, value-added, 
all these other things, can help get more money back to those 
individual farmers. We will be pursuing that.
    Last, I throw out a question for all of you who are here 
and others on this whole concept of price supports, safety 
nets, and countercyclical. However this all works out as we try 
to come up with bipartisan agreements and find out where we can 
agree and work this thing out. I ask this question. Should we 
still be involved as a nation in supporting every bushel and 
every bale that is produced? Should we continue the policy of 
supporting every bushel and every bale produced? I will just 
let that linger there. Think about it. It is a question that I 
will be asking in July as we have further hearings, as to 
whether or not we want to continue that policy or maybe shift 
into other areas.
    With that, I thank you. As Senator Roberts said, I thank 
you for being here. A lot of you came a great distance. Rest 
assured that we have taken your testimony into account and it 
will be made an entire part of the hearing record. As I said 
earlier and repeated and I will repeat one more time, we look 
forward to having further contact with you as the hearing and 
markup process proceeds.
    Thank you. The committee will stand adjourned until the 
call of the chair at some time after the Fourth of July recess. 
We are working now and I am going to be working with Senator 
Lugar to set up a hearing schedule in July. We will be back 
sometime the first week after we come back.
    [Whereupon, at 12:19 p.m., the committee was adjourned.]
      
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                            A P P E N D I X

                             June 28, 2001



      
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                   DOCUMENTS SUBMITTED FOR THE RECORD

                             June 28, 2001



      
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                         QUESTIONS AND ANSWERS

                             June 28, 2001



      
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