[Congressional Record Volume 141, Number 13 (Monday, January 23, 1995)]
[Senate]
[Pages S1293-S1296]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         FEDERAL FARM PROGRAMS

  Mr. CONRAD. Mr. President, I rise today to issue a warning to those 
in Congress who are suggesting we eliminate or deeply slash the Federal 
farm programs.
  These programs have given American consumers the lowest price and 
highest quality food in the world. These programs have helped make 
America's farmers preeminent among the world's food producers. They 
have helped agriculture produce a $17 billion surplus in trade, one of 
the largest of any American industry. These programs are the foundation 
of a $950 billion industry employing over 23 million Americans that 
delivers food and fiber to American families.
  To those who would kill our farm programs, I say this amounts to 
unilateral disarmament in the battle for world agricultural markets. It 
is an unwise dismantling of our successful national food policy. Our 
agriculture programs are the foundation on which much of our ability to 
meet international competition is based. They are also the foundation 
for our national food policy, which has helped us become the most 
richly abundant nation in the world. No one would have suggested we do 
away with our missile defenses during the cold war. Yet some now 
suggest we do away with the farm programs that work for millions of 
Americans in the food industry and for all American consumers.
  Let me just explain very clearly why U.S. farm policy is right for 
America. First, our agriculture policy is vital for preserving our 
international competitiveness. Second, agriculture is a fundamentally 
unique type of business. Third, Federal farm programs are crucial for 
American consumers.
  Despite these compelling arguments, some people assume farm programs 
are an appropriate place to slash and even eliminate America's 
commitment to our most basic industry. Why do they assume this? Mr. 
President, I believe it is complacency. We have been so well 
[[Page S1294]] fed and blessed with food security for so long that we 
have forgotten why we created the system.
  I am here to remind America that the farm programs are part of an 
extraordinarily successful strategy to bring ample, affordable food to 
consumers and help us compete in a tough international fight for 
markets. Yet there remains a gap between our Federal agricultural 
policy and an appreciation for the food on our tables.
  Complacency has allowed critics to create myths about agriculture. 
Myth 1 is that farm programs are not necessary in the world economy. 
Myth 2 is that agriculture is like every other type of business. Myth 3 
is that consumers will benefit from the elimination of farm programs.
  I am here today to dispel those myths. I say to those who are 
pointing their finger at agriculture, they should think twice. They are 
suggesting a reversal of the policy that has made our Nation the world 
leader in agriculture. They are seeking to dismantle the policy that 
has provided American consumers with the highest quality, lowest priced 
food in the world. They are jeopardizing an American industry that is 
the envy of every other country in the world. They must explain why we 
should fix a system that is not broken.
  Mr. President, myth 1 about agriculture is that we do not need farm 
programs to compete in the world market. What many critics do not 
understand is that today there is an intense worldwide battle for 
agriculture market dominance. Our primary competitor is Europe. They 
have a plan. They have a strategy to win the world agricultural trade 
battle. They provide high levels of support to their producers to 
encourage surplus production. They dump those surpluses on the world 
market, undercutting our producers and grabbing international market 
share. They are on the march. They are on the move. Make no mistake.
  Meanwhile, we sleep. We are blissfully unaware that our markets are 
being stolen from us day by day. One day we may awaken to learn that 
Europe has done to us in agriculture what Japan has done to us in 
automobiles and electronics. The Europeans understand that there is a 
war being waged for markets, and they believe ultimately there will be 
a cease-fire. They believe there will be a cease-fire in place, and 
they want to occupy the high ground. The high ground is dominating 
world market share. And, oh, how well their strategy is working. In a 
few short years, Europe has transformed itself from the largest net 
importer of wheat to the No. 2 exporter.
  This chart shows precisely what has happened from 1960 to 1992. The 
red line shows European exports of wheat. The blue line shows imports. 
As one can see, Europe that was once the largest importer has now moved 
to the No. 2 exporter in the world. They have a plan. They have a 
strategy.
  Let me just tell you what we are up against. The Europeans support 
their producers at rates 2 to 20 times the level of support we give our 
farmers. For example, the Europeans spend $119 per metric ton to 
support their wheat producers; 2\1/2\ times the U.S. level. This chart 
shows the difference. This is just government levels of support. 
Europe, $119 per ton, the United States, $46 per ton; over 2\1/2\ times 
our level of support. It does not stop with wheat.
  The same is true for beef producers. Again, they support their 
producers at 2\1/2\ times the level we support our producers. Again, 
not surprisingly, Europe is No. 2 in beef exports.
  This chart shows European support versus U.S. support for beef. This 
is in dollars per metric ton. Europe is $2,274 per metric ton. The 
United States is $878 per metric ton. Europe is supporting their 
producers at 2\1/2\ times the level that we are supporting our 
producers.
  If that is not bad enough, Mr. President, let us look at oilseed. 
They give their oilseed producers 23 times the level of support we give 
our oilseed producers. While world oilseed demand and acreage have 
increased over 40 percent in the past 15 years, U.S. oilseed plantings 
have increased a minute 0.3 percent. European plantings have 
skyrocketed 330 percent.
  Mr. President, this chart shows European support in oilseeds versus 
U.S. support--a dramatic difference. It is $329 a metric ton in Europe, 
$15 a ton in the United States. And we wonder why Europe is capturing 
market after market.
  Mr. President, I hasten to point out that these examples demonstrate 
how much the European governments are supporting their producers. It 
does not count European consumer subsidies to their producers, which 
would make the levels of producer subsidy much higher.
  Mr. President, this is not a level playing field. This means that 
American farmers must not only compete against French and German 
farmers. American farmers must compete against the French Government 
and the German Government. This means that Europeans take income from 
American farmers. This means that Europeans take jobs from Americans 
working in processing, transportation, and the input industry.
  We can see how well this European strategy is working in trade 
negotiations, as well. While Europe supports their farmers at high 
levels, we consistently slash agriculture spending in this country. My 
colleagues should remember the early stages of the Uruguay round of 
GATT. The European GATT negotiators sat back, watched us cut our own 
programs and then toughened their negotiating position. We could have 
won more for our farmers and our agribusiness industry if we had not 
unilaterally cut our farm programs.
  Instead of a level playing field, Europe held out for equal 
percentage reductions from these unequal levels of support. That 
assures they will remain on top.
  Mr. President, again, I emphasize to those who are listening, the 
Europeans have a plan and a strategy to dominate world agricultural 
markets. Their plan, their strategy is to continue high levels of 
support--much higher levels than ours--on the assumption that at some 
point in this world trade battle, there will be a cease-fire. They 
believe there will be a cease-fire in place. They want to occupy the 
high ground. So in area after area, we see the European strategy 
playing out. Oh, how well it is working. We let them take advantage of 
us. We cannot allow that to happen again.
  The Europeans support their producers at high rates for simple yet 
compelling reasons. They've been hungry. They know what it is like to 
go through war and not have a stable food supply. They have made 
conscious decisions to avoid that ever happening again. They also know 
that every field of wheat and every field of sunflowers creates jobs 
and processing, transportation and input industries. I admire them for 
their foresight and commitment.
  Against these odds, agriculture in America is still one of the few 
sectors of the economy that contributes positively to our balance of 
trade. While the rest of the economy is heading for a $180 billion 
trade deficit, agriculture is producing a $17 billion trade surplus. 
The farm programs are the foundation on which our farmers are able to 
compete against these overwhelming odds. Remember, if American farmers 
do not grow it here, American workers do not transport, process and 
market it here.
  I repeat, we are in a worldwide battle for market dominance. The 
Europeans hope the United States will give up and give in. They hope we 
will roll over. They hope we will flinch.
  Mr. President, I am here to deliver a message. We must not back down. 
We must not unilaterally disarm. We must not retreat. We must fight if 
we are to preserve jobs and economic activity in this country.
  The current battle in this global market is crucial for millions of 
American jobs. That is precisely what is at stake--American jobs. The 
question is this: Will we stay in this fight? We cannot win the battle 
with our hands tied behind our backs. If we give in, we lose. This is 
not a question of subsidies. It is a question of whether we are going 
to stand behind our farmers in this global market battle. It is a 
question of whether we are going to stand for American jobs.
  Today, we are at a crossroads. We are beginning debate on the 1995 
farm bill, a bill that will set American agriculture and food policy 
into the 21st century. At the same time, debate on another round of 
GATT will begin in 
[[Page S1295]] the next few years. The choice is ours. We engage, or we 
retreat.
  Mr. President, myth two about agriculture is that it is like every 
other type of business. That is simply not the case. Unlike any other 
sector, farmers produce a basic human need: food. To sustain that 
abundant food supply, we maintain a reserve of basic commodities to 
fulfill our food and feed needs in times of shortfall. The reserve is a 
national food security system, an insurance policy for consumers 
against shortfalls in crop production. Inherently, reserves depress 
prices and reduce farmers' incomes.
  For many decades, the people of this Nation have believed that 
maintaining a stable reserve of critical commodities is in our national 
interests. For decades, we have believed that we should maintain 
producers' incomes at levels sufficient to sustain a stable supply. 
That is why we have farm programs.
  Not only do farmers produce a basic human need and maintain large 
inventories, but farmers must also deal with a highly volatile factor--
the weather.
  In other parts of the world, droughts have killed hundreds of 
thousands of people. Thankfully, our Nation has always been spared 
famine. We have had a rational food policy. Americans need not think 
long to recall the last time weather had a disastrous impact on U.S. 
agricultural production--the last time we made a claim on our national 
food insurance policy. The 1993 flood reduced corn production by one-
third. Luckily for the American consumer, we had stocks of grain on 
hand, a land reserve to increase plantings, and favorable weather in 
1994 to replenish our supply.
  How much would consumers have spent on higher food costs without a 
farm program? The answer is billions of dollars. On top of the billions 
of dollars consumers saved in 1993, food stocks in hand during the 
1988-1989 drought saved consumers some $40 billion in higher food 
costs. That is how a national food policy should work, and that is how 
our national policy does work.
  Moreover, the research that agriculture supports has given consumers 
a second insurance policy. Insects and disease have always presented 
formidable and destructive problems to agriculture. For example, 1993 
wheat production in some counties in North Dakota was cut 50 percent by 
disease. Farmers burned literally millions of acres of wheat destroyed 
by that disease. Researchers are now hard at work to prevent the spread 
and find a cure.
  We can remember what happened in other times, in other countries that 
did not have such a vigorous effort, such an insurance policy.
  The potato famine of the mid-19th century in Ireland provides a 
dramatic example of the importance of disease research. One single 
fungus destroyed Ireland's potato crop, forcing many into starvation. 
Fortunately for U.S. consumers today, food production research in the 
U.S. targets disease early, limits the spread, and prevents that type 
of human devastation.
  Mr. President, myth three about farm programs is that their 
elimination will benefit consumers. The purveyors of myth three ignore 
clear evidence to the contrary.
  First, American citizens enjoy a safe, high-quality, abundant, and 
stable food supply. Second, we spend less of our disposable income on 
food than any other consumers in the world.
  I have brought this chart to show what we pay in this country versus 
what other consumers in other countries pay. I think it is very 
revealing. This shows the percentage of income that goes for food. In 
Italy, 26 percent of their country's income goes for food--26 percent. 
In Australia, 23 percent; in Japan, 19 percent; Germany, 19 percent; 
France, 16 percent; the United Kingdom, 12 percent; Canada, 11 percent; 
and in the United States, 8 percent of our income goes for food, the 
lowest cost food in the world. And there are those who suggest we 
eliminate the underlying programs that make this possible. Mr. 
President, that makes no sense.
  We have been in a time when we spend less of our income for food than 
do the consumers of any nation, but at the same time we have achieved 
that result, we see food prices continuing to fall. According to the 
USDA, consumer spending has dropped from 10 percent of income in 1970 
to 8 percent today. So not only have we achieved the lowest cost food 
in the world, but we have also kept food costs going down. In 1970, 10 
percent of the average American's income went for food. In 1991, it was 
down to 8 percent.
  And of that declining percentage, only 22 cents of each dollar goes 
to the American farmer. Further, the cost of marketing food has been 
the principal factor affecting consumer costs.
  Let us just look for a moment at the price of bread. This chart shows 
what has happened with U.S. wheat prices versus what happened to bread 
prices. Wheat prices have been relatively stable. Bread prices have 
continued to rise. In other words, there is virtually no relation 
between the consumer cost and the price the farmer receives. Clearly, 
the increase is not going into the farmer's pocket. To further 
illustrate, from 1983 to 1993, 85 percent of the rise in consumer food 
costs went to the marketing bill, not to farmers.
  Returning to our examples of the 1993 flood and the 1988-89 droughts, 
while production dropped sharply, consumer prices remained stable. 
Again, this is how the farm programs are supposed to work and it is how 
they do work--protecting consumers against the dramatic fluctuations in 
supply that can occur because of weather-related and disease-related 
disasters.
  What would happen if farm programs were eliminated? Very likely, 
reserves of grains would be reduced, prices would fluctuate, and 
consumers' cost of food would increase. Does that sound like something 
that is good for the American consumer? Absolutely not.
  Mr. President, we are now engaged in a debate about how to reduce the 
budget deficit. I support a balanced budget. I have not only voted for 
deficit reduction measures, I have offered my own plans, as a member of 
the Senate Budget Committee, every year I have been in the U.S. Senate.
  But let us look at what you get if you eliminate agriculture 
spending. You do not get much. Agriculture represents less than 1 
percent of the entire Federal budget.
  This chart shows Federal outlays from 1996 to 2002, the period about 
which we are talking about balancing the Federal budget. Here is 
interest on the debt, nearly $2 trillion over that period; defense, 
over $2 trillion; Social Security is nearly $3 trillion; domestic 
discretionary spending, just over $2 trillion; Medicare, almost $2 
trillion. Where is agriculture? Where is agriculture, Mr. President? It 
is this little, tiny slice right here. You almost cannot see it.
  That is because, of the $13 trillion that we are projected to spend 
over the next 7 years, $87 billion is for agriculture--$87 billion out 
of $13 trillion, far less than 1 percent of Federal spending.
  Mr. President, I repeatedly encounter press reports of someone 
suggesting we cut agriculture and that cutting agriculture will somehow 
solve our deficit problems. It simply will not.
  Not only is it a small pot of money, it is a dwindling pot. 
Agriculture spending has suffered dramatic cuts in recent years. In 
constant dollars, farm spending dropped a full two-thirds since 1986. 
Still, some continue to point their finger at agriculture as the cause 
of our deficits. Nothing could be further from the truth.
  Mr. President, this chart shows in constant dollars agriculture 
program spending: In 1986, expressed in 1994 dollars, $35 billion; in 
1994, down to less than $12 billion, a dramatic reduction. In fact, if 
other parts of the budget had suffered the same reductions that 
agriculture has experienced, there would be no deficit problem. We 
would be in surplus.
  Mr. President, many critics of farm programs suggest that because 
some forms of agriculture production in the United States survive 
without Government programs, all commodities should be able to operate 
in that manner. Most often mentioned are livestock and fruits and 
vegetables.
  Let us just take livestock off the table right away. Anyone who 
suggests the livestock industry operates without the benefit of feed 
prices stabilized by our farm program is sorely misinformed.
  Fruits and vegetables are another case. Fruits and vegetables are 
perishable. While a reserve would be highly impractical, the prices of 
many such commodities are stabilized through 
[[Page S1296]] marketing orders administered by USDA. So, in fact, we 
do have price stabilization programs for the vast majority of 
agricultural commodities. That is why consumers enjoy stable supplies, 
high quality, and modest food prices.
  Mr. President, I believe I have demonstrated how important farm 
programs are to consumers. Now let us take a hard look at how the 
elimination of farm programs would affect producers.
  Who are these producers? They are good citizens. They are hardworking 
people. They get up early. They work late. They support their 
communities. They pay taxes. And, Mr. President, far from the media-
generated image of wealthy folks, the average net farm income in North 
Dakota is $20,000 a year. I know that is hard to believe when one sees 
portrayed over the media these images of wealthy farmers who are 
farming the mailbox.
  Mr. President, that is not the way it is. I come from North Dakota. I 
go across the State of North Dakota, through cities and towns, visiting 
farmsteads. I get a chance to see what the condition is in rural 
America.
  The hard reality is that the average farmer in my State is earning 
$20,000 a year. They have strong families. Farming is a family 
business. They raise good children; children that grow up with a strong 
work ethic, a good education, and good values.
  But those children rarely come back to farm because they do not see a 
future in it. They do not see a good opportunity. They do not see a 
secure and profitable profession. They see a struggle. They see a 
struggle to raise a good crop, a struggle to withstand low prices, a 
struggle to persevere through hail, drought, or flood.
  They watch their parents struggle and they ask why.
  Mr. President, I think we find farm families staying on the land not 
because it makes sense financially, because the rate of return for 
agriculture is as low as any industry one can find. I believe they stay 
with it because it is a way of life.
  What will the cuts that some people are suggesting do to this way of 
life? In North Dakota, the effect would be dramatic. According to USDA 
statistics, in 1993, farm program payments represented 82 percent of 
net farm income--82 percent of net farm income represented by Federal 
farm program payments. Nationally, startling statistics from the U.S. 
Department of Agriculture provide a clear picture of what is happening 
on the farm. Let me quote:

       * * * recently, entry has fallen fastest for farms operated 
     by those under 35.

  They go on to say:

       * * * the most noticeable change in the 1992 census (of 
     Agriculture) was among 35-to-44 year-old farmers. Farm exits 
     for this age group increased * * *

  What does this tell us? It tells us that farming is not an 
economically attractive business. It is high risk, not high income.
  Again, according to USDA:

       Approximately 90 percent of all farm operator households 
     received some income from off-farm sources.

  If farming were such a profitable business, far fewer households 
would have to search for alternative sources of income to meet their 
needs.
  Finally, the difference between the Consumer Price Index and the 
prices received for farm commodities clearly portrays the pressure that 
farmers face.
  Mr. President, this chart shows the farmers' financial squeeze. The 
Consumer Price Index rises much faster than farm prices. This chart 
shows from 1982 to 1993 the relationship between the Consumer Price 
Index, the prices that farmers pay for things, and farm prices, the 
prices that farmers get. This chart tells us a very clear story:
  From 1982 to 1993, the red line shows farm prices. It has been 
relatively stable. The blue line shows what has happened to the 
Consumer Price Index. It has risen each and every year on a steady 
course. So the gap between what farmers pay and the prices they receive 
has steadily grown.
  Farmers are being squeezed by low farm prices and rising costs. 
Further, agricultural program cuts will damage rural America in 
profound and irreversible ways. At a time when we need sustained 
economic growth in both rural and urban areas, the needs of rural 
America cannot be ignored. It would be flawed economic policy.
  In conclusion, let me restate why we need to maintain our agriculture 
policy. First, agriculture programs are the foundation for our 
international competitiveness. Without them, we unilaterally disarm in 
the world trade battle. That would harm American farmers, eliminate 
American jobs and threaten America's economic security.
  Second, agriculture programs are insurance policies for consumers. 
Without farm programs, consumers lose security over a basic human need: 
Food.
  Finally, agriculture is a fundamentally different form of business. 
To work properly, it must maintain a reserve, but that reserve 
depresses prices for farmers and benefits consumers. Because of 
agriculture's differences, farm programs are essential.
  We as a nation have maintained an agriculture policy for decades to 
protect producers and consumers. This is not blind generosity. This is 
not aimless policymaking. This is not luck. Those who seek to destroy 
the farm program must demonstrate why their way is right for America. 
The burden of proof is on them. I think the facts prove they are dead 
wrong.
  Our agriculture policy works. We have proof that it works. We must 
not destroy a program that is proven to deliver an abundance of low-
cost, high-quality food. We must not destroy a program that has made 
America the world leader in agriculture. We must not destroy a program 
that has worked. We must not unilaterally disarm.
  I thank the Chair, and I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DOLE addressed the Chair.
  The PRESIDING OFFICER. The majority leader.
  Mr. DOLE. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DOLE. Mr. President, is leader's time reserved?
  The PRESIDING OFFICER. It has been reserved.

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