[Congressional Record Volume 140, Number 86 (Thursday, June 30, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: June 30, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                           WASHINGTON REPORT

                                 ______


                          HON. LEE H. HAMILTON

                               of indiana

                    in the house of representatives

                       Wednesday, June 29, 1994,

  Mr. HAMILTON. Mr. Speaker, I would like to insert my Washington 
Report for Wednesday, June 29, 1994, into the Congressional Record:

                          Agricultural Outlook

    
    
       U.S. agriculture continues its strong performance. Net cash 
     income is expected to match last year's record level of $59 
     billion. The value of exports in 1994 is forecast to equal 
     last year's level of $42.5 billion. Although the value of 
     exports has remained stagnant, there has been a rise in high 
     value exports, particularly dairy, meat and poultry.


                             fy 1995 budget

       On June 17, the House approved a bill providing $68 billion 
     for the U.S. Department of Agriculture (USDA) for next year. 
     Roughly $55 billion will support mandatory spending such as 
     food stamps and price and income supports and the remainder 
     will support discretionary USDA programs such as farm credit, 
     crop insurance, research, and extension. In recent years, 
     agriculture has averaged about \1/3\ of USDA's budget with 
     most of the balance funding food, nutrition, and consumer 
     programs. Congress will continue its work on the FY 1995 
     budget to assure that farmers receive full benefit for each 
     dollar spent.


                                 trade

       Opening export markets is critical for U.S. farmers. One 
     out of every three acres of cropland already goes for export 
     each year, and U.S. productivity continues to rise. Because 
     the US economy cannot consume all the output from the steady 
     rise in farm productivity, expanding global export markets 
     must be a primary policy goal. The growth in the markets for 
     value-added farm products--like corn oil and soybean meal--
     will also help absorb the added production.
       The North American Free Trade Agreement (NAFTA) became 
     effective in January, and will phase out barriers in US, 
     Mexican, and Canadian agricultural trade over 15 years. Once 
     fully implemented, US agricultural exports are expected to be 
     $2.6 billion higher annually than without the agreement. 
     Although still early, the initial indicators are favorable. 
     The value of US exports to Mexico in the first three months 
     of this year was $1.44 billion, or about 12% higher than 
     during the same period in 1993. Congress is working on 
     implementing legislation to the Uruguay Round of the GATT, 
     which would cover agriculture for the first time. If adopted 
     by the member countries, those countries would be required to 
     make significant cuts in the value and volume of agricultural 
     export subsidies. Discussion continues on how to pay for the 
     loss of revenue that will result from the agreement's tariff 
     reductions. I have discussed this matter with the 
     administration, and have made it clear that I will oppose 
     funding proposals that unfairly place the burden of paying 
     for the loss of revenue on the backs of farmers. The 
     administration is also seeking new trade negotiating 
     authority that would permit Chile and other Latin American 
     countries to join the free trade agreement between the US, 
     Mexico, and Canada. I know of no single step that would help 
     farmers more to expand US agricultural exports. New global 
     markets provide the American farmer with exciting 
     opportunities.


                                new uses

       The Clean Air Act of 1990 expanded the role of cleaner 
     fuels, such as ethanol, in fighting air pollution. The 
     administration proposed a rule that would carve out a 
     specific niche for corn-based fuel additives in the 
     reformulated gasoline market. The rule, which will be 
     finalized this month, will help corn growers. I believe that 
     developing industrial uses of crops and producing new crops 
     for new uses are promising ways to increase markets for 
     agricultural products.


                          usda reorganization

       Earlier this month the House Agriculture Committee approved 
     a bill that would strengthen the Agriculture Secretary's 
     authority to reorganize the agency. The centerpiece of the 
     bill is a new Farm Services Agency that would carry out price 
     and income support, crop insurance, and farm credit programs. 
     Conservation programs would be placed in a new Natural 
     Resources Conservation Service. The bill would require the 
     administration to meet certain cost saving goals and to 
     merge, consolidate or close a number of its field offices. 
     However, the bill would require that job reductions in 
     Washington DC be larger on a percentage basis than those in 
     the field offices. I agree with the priority placed on making 
     the largest cuts from USDA headquarters. My goal is to reduce 
     the bureaucracy and save money, while providing improved 
     service to farmers. The full House may debate the 
     reorganization bill this week. The Senate approved its own 
     version of a reorganization bill in April.


                 conservation and environmental issues

       The 1985 farm act established several programs to provide 
     incentives to encourage soil conservation, and the 1990 farm 
     act established additional programs to address mainly water 
     quality issues. The upcoming reauthorization of the Clean 
     Water Act will again focus attention on agriculture's role in 
     non-point pollution and wetlands conversion; laws governing 
     pesticide sale and use will also be reviewed. I want Congress 
     to look at these proposals with great care. I will support 
     farmer friendly approaches to legislation. I do not want to 
     penalize farmers.


                             1995 farm act

       Enhancing farmers' competitiveness will be a high priority 
     in the 1995 farm act debate. Congress is expected to take 
     steps beyond the 1985 and 1990 farm acts to achieve greater 
     market orientation. More than in the past, agricultural 
     policy will likely be linked to national priorities, 
     including job creation in rural America. Environmental 
     policies will also be reviewed. For instance, debate has 
     begun concerning what will happen to the 36 million acres of 
     highly erodible cropland enrolled in the Conservation Reserve 
     Program when CRP contracts begin expiring in 1995. Discussion 
     on these and other issues is just getting started and will 
     likely culminate in the 1995 farm act.


                                outlook

       Strong economic growth and low interest and inflation rates 
     will continue to help US farmers. They will also benefit from 
     the lowest debt-to-asset ratio--a key indicator of farm 
     financial health--in 25 years. There will be challenges for 
     US agriculture, including declining price and income 
     supports, increased competition from abroad, lower sales to 
     the former Soviet Union, and reduced US export subsidies 
     under GATT. My view is that overall US agriculture is in a 
     strong competitive position to succeed over the decade. As 
     Congress prepares for the renewal of the farm act next year, 
     my hope is that greater economic growth at home and abroad 
     and stable production expenses will help US farmers 
     strengthen their position as the world's leading producers.

                          ____________________