[Congressional Record Volume 141, Number 55 (Friday, March 24, 1995)]
[Senate]
[Pages S4565-S4567]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           FARM POLICY REFORM

  Mr. KERREY. Mr. President, every year the President of the United 
States is required by law to send an economic report not just to the 
Congress but to the people of the country. It is a very, very important 
report. It provides us with the administration's assessment of where 
the economy is and what needs to be done both to sustain economic 
recovery and to adjust in certain areas.
  There is a section in the President's economic report described as 
farm policy reform. I would like to comment upon that here this 
afternoon in the time that I am allowed.
  Mr. President, one of the first statements that this document says 
is:

       Efficiency requires that farmers be given greater 
     opportunity to respond to marketing incentives, and the cost-
     effective public policies used to correct market failures in 
     agriculture. Revising agriculture to meet better these 
     objectives will help unleash more of the innovative energy 
     that has long characterized American agriculture.

  Mr. President, there is very little barrier between the farmer and 
the marketplace today, notwithstanding a lot of the political rhetoric 
that seems to imply that somehow agriculture is heavily subsidized. If 
agriculture was heavily subsidized, Mr. President, one would expect an 
economic analysis to reveal very low rates of productivity. That is 
typically what one sees.
  If I subsidize somebody a great deal--we hear this in the welfare 
debate--subsidize somebody a great deal, it is apt to encourage not 
increased productivity, it encourages just the opposite.
  If agriculture was heavily subsidized, one would expect to see very 
low rates of productivity and would expect to see economic analysis, 
particularly analysis that showed how the agriculture sector compared 
to other sectors of the U.S. economy and our international competitors, 
it would show that we are relatively unproductive. Just the opposite, 
Mr. President.
  Compared to our OECD competitors, agriculture is more productive than 
computers, more productive than automobiles, more productive than 
steel, more productive than pharmaceuticals, more productive than 
chemicals, more productive than all other sectors of our economy.
  This report, Mr. President, implies that the Government of the United 
States of America somehow is standing in between farmers out there who 
would like to be competitive and the market, and it just is not true.
  The report, in my judgment, distorts what is actually in plain view 
out there in the countryside. The report says that ``The farm sector no 
longer looms large in the macroeconomy.''
  Now, that is based on a GAO analysis that showed that only 2 percent 
of the U.S. population is now in agriculture production. But 18 percent 
of all the jobs, according to this report, are either directly or 
indirectly related to agriculture production. So if farmers are not 
making money, if the profit shifts someplace else, Mr. President, these 
businesses are going to have a tough time making ends meet and, 
[[Page S4566]] thus, production in agriculture is still vital not just 
in the micro-sense but in the macro-sense of the entire U.S. economy.
  Now, let me provide what I would have hoped this kind of report would 
have provided. Instead of beginning with, I think, an incorrect 
identification of what is going on in agriculture, let me provide those 
in America who are wondering what this farm program is all about with 
some basic facts.
  First, there are only 500,000 full-time farmers left in this country. 
This report has a statement in here, a commonly applied statement, that 
agriculture production is increasingly concentrated. Well, you would 
think--increasingly concentrated --does that mean that it is like 
automobiles, where we have three? Is that like pharmaceuticals, where 
we have 9 or 10? Is that like computers, where we have half a dozen? Is 
that what we are talking about? No.
  There are 500,000 fully competitive, relatively small businesses--
even a big farm is relatively small, Mr. President. A farm that an 
economist might describe as a large farm might not have as much revenue 
as an average McDonald's restaurant, for gosh sakes. So these are very 
competitive businesses.
  Indeed, if you ask a Nebraska farmer, ``Honestly, what is your idea 
of an enlightened policy?'', they will say, ``We pray for bad weather 
in Iowa.'' Well, you know, we do not honestly do that.
  But the truth is, it is very competitive. We are competing out there 
not just with each other, but we are competing throughout the world. We 
would not be this productive were we not faced with the blessing of 
having this large number, still relatively large number, of full-time, 
highly competitive small businesses, family-operated businesses, 
mostly, that are manufacturing food products.
  Now, one of the common things that I very often hear, not just in 
Washington, but I hear in Grand Island or Hastings and other 
communities in Nebraska, they will say, ``Well, why do we have to have 
any kind of a Government program?''
  Well, there are a couple of reasons that we do this. This report 
here, by the way, traces it all the way back to the 1920's and 1930's. 
It says in this report, ``Today's agriculture commodity support 
programs are rooted in landmark New Deal legislation that followed the 
agricultural depression of the 1920's and 1930's.'' Again, feeding a 
misperception that this is a 60-year old program, started by Franklin 
Roosevelt, no longer needed; modern times no longer needs this sort of 
thing.
  Well, Mr. President, one thing today is true that was true in 1930. 
And Americans who wonder why we have a program need to take this into 
consideration. Unlike other manufacturing businesses that I have 
referenced--automobiles, textiles, computers--we manufacture food out 
of doors. You might think that is kind of a silly and simple 
observation, but as long as we manufacture food out of doors we are 
always going to be dependent upon God to give us good weather. If we do 
not have good weather, if we have drought, we do not produce food. It 
is as simple as that, Mr. President.
  You think, well, that is not a big deal.
  Well, in 1987, I remember just after I left the office of Governor 
and went back into business, in 1987, swirling in the country was this 
big debate: What are we going to do with these enormous reserves that 
built up after the 1985 farm program was enacted? It is too costly--
$125 billion a year, I believe it was. What are we going to do with 
these large reserves?
  We had a drought in 1987. Then in 1988, we had another drought. I was 
campaigning at the time for the U.S. Senate. I almost remember the day 
when the American people stopped talking about these excess reserves 
and they started to say to themselves, ``Oh, my gosh. Maybe we do not 
have enough inventory.'' Suddenly, the reserves became an inventory.
  Now, I say that to Americans who are saying, ``Is this worth it?"
  We have an $8 billion program, the Commodity Credit Corporation 
program. There are $450 billion worth of food purchases in the United 
States. So you really pay $458 billion, $8 billion through farm price 
deficiency payments and $450 billion at the supermarket.
  The reason that this reserve issue is important, I say to consumers, 
is because--I will tell you, as somebody who represents about 55,000 of 
those full-time farmers in the State of Nebraska, if we cut this 
program back too much and listen to the rhetoric, both Republican and 
Democrat, around here, it leads me to believe that may happen. You may 
find this Senator on the floor saying to the American consumer, no 
longer are we going to maintain a reserve, because that reserve serves 
the American consumer, Mr. President. It does not serve the producer.
  In spite of what this report says, that reserve is there because the 
American consumer is concerned about what happens if we find ourselves 
short of food. You say, ``Well, that's an exaggeration.'' It is not.
  In 1993--and again, this report would lead you to believe that farm 
policy does not have any impact at all on macroeconomic policies--in 
1993, the Secretary of Agriculture, at that time Secretary Espy, was 
having to make a decision: What should our reserve program be? Should 
we set a 5-percent reserve, a 10-percent reserve, a 0-percent reserve? 
What should our reserve be?
  The farmers in Nebraska, the farmers in Iowa, but particularly in 
Nebraska where we are polled a lot, said, ``Set it at 10 percent 
acreage reduction program.''
  Secretary Espy said out loud and in public, ``I am going to set a 0-
percent acreage reduction program.'' Go back and look at what Secretary 
Espy said. He said:

       I'm afraid if I set a 10-percent ARP that my food prices 
     are going to be higher, and if food prices get higher, 
     inflation comes back in the economy, high interest rates 
     could come back in the economy and this entire recovery could 
     get shut down.

  That was the economic analysis done by the administration. You say, 
``Well, OK, so he did that, what is the impact?'' It is a big impact. 
Farmers were asking for a 10-percent acreage reduction program. They 
got a 0-percent acreage reduction program, and here is the effect:
  In 1993, the corn payments under CCC in the State of Nebraska were 
$600 million. In 1994, they dropped to $160 million. This year they are 
probably in the $700 million range again. You say, ``My gosh, why are 
they going back and forth? Why is it 600, 160, 700?'' The answer is, 
the price is impacted by the decision that the Secretary makes to set 
the reserve. When the Secretary set the reserve at 0 percent, farmers 
wanted 10 percent. When he set the reserve at 10 percent, we produced a 
bumper crop in 1994, along with tremendous weather that we had in 1994, 
we have lower prices and higher deficiencies in 1995.
  So the higher budget exposure in 1995, which would probably be $700 
million in my State, is not something I asked for. I asked for a 10 
percent reserve which probably would have cost the taxpayers $160 
million again. But USDA says, ``No, we're going to go with the 0-
percent reserve.'' The cost to the taxpayers ends up being four times 
greater, and guess who gets blamed? The farmer. The farmers in Nebraska 
are accused of wanting more welfare. The farmers in Nebraska are 
accused of wanting more money from the Government. Mr. President, 
American taxpayers should understand that the farmers were asking for a 
higher reserve which would have resulted in lower payments by the 
Federal Government.
  Now it may be, I must say, that this kind of language, and others 
that I have heard, will result this year in deficiency payments being 
cut back. Perhaps the permission granted to this program is going to be 
pulled out if we change it radically. Mr. President, if we change it 
radically, consumers need to understand that this representative for 
American farmers is going to come to the floor and say we ought to get 
out of the reserve business altogether. No more reserve for the 
American consumer, no more holding food back on behalf of the American 
consumer, and we will just let the market set the prices. There will be 
times, as a consequence of that, when the price ends up being much 
higher.
  This is not the only area where increasingly we come down and hear 
this mantra: Well, 60 years of failure, 40 years of failure. You hear 
it a lot about welfare today. You hear it a lot about other programs. I 
heard the chairman of I guess it is called the Health and 
[[Page S4567]] Economic Opportunity Committee. They renamed it over on 
the House side. The committee chairman, Representative Goodling, stood 
on the floor of the House of Representatives the other evening--I 
watched on C-SPAN--and he said, ``Just name me one thing this Federal 
Government of ours does well. Just name me one.''
  I wish that he was a Senator in some way so in unlimited debate we 
had an opportunity to challenge that. I would have said, ``Senator 
Goodling, how about you, are you one good thing? Are you efficient and 
effective? Because, if you are not, get out of here, resign and let 
somebody else take your job. If the answer is yes, then at least we 
found one.''
  Then I would pursue it.
  How about your staff, buddy? They work about 16 hours a day. Are they 
efficient and effective? Are the taxpayers getting their money's worth 
out of your staff? How about those folks over at NIH trying to find a 
cure for AIDS or cancer? Are you getting your money's worth? How about 
those folks up in the Endeavor a week ago exploring space? Are you 
getting your money's worth there?
  I must say, Mr. President, I think as we come and debate, 
particularly as we are trying to find ways to balance the Federal 
budget and trying to find ways to restore America's confidence in 
Government, we ought to take care not to throw out those things and, in 
fact, to work it and take care not to throw out those things that, in 
fact, are lifting a little bit of hope in the country.
  I find, as well, a tendency to blame the wrong people, blaming 
farmers for the farm program, while farmers are arguing for something 
that would cost taxpayers less; blaming the poor, for gosh sakes, for 
their own behavior. We know that the nonpoor behavior is having some 
difficulty as well.
  Mr. President, I came to the floor because I did not like the 
language in the President's economic report to the Nation. I hope, 
though I am not overly optimistic given what I have seen thus far, I 
hope that we are, in 1995, able to write not just a farm program but a 
health program, a children's program, an education program, a welfare 
program that takes into account what is going on in the countryside.
  I yield the floor.
  Mr. REID addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, before my friend from Nebraska leaves the 
Senate floor, I would like to respond through the Chair to my friend 
the Congressman from the State of Pennsylvania that I do believe 
without any question that we do have in this body a person who is 
efficient and effective, and I believe the State of Nebraska is 
certainly getting its money's worth from the junior Senator from the 
State of Nebraska.

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