[Congressional Record Volume 141, Number 137 (Wednesday, September 6, 1995)]
[Extensions of Remarks]
[Page E1705]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                           THE 1995 FARM BILL

                                 ______


                          HON. LEE H. HAMILTON

                               of indiana

                    in the house of representatives

                      Wednesday, September 6, 1995
  Mr. HAMILTON. Mr. Speaker, I would like to insert my Washington 
Report for Wednesday, August 30, 1995, into the Congressional Record.
                           The 1995 Farm Bill

       When Congress returns to Washington after Labor Day, it 
     will begin action on the 1995 farm bill. Farm programs are a 
     bewildering variety of production limits, loans, income 
     support payments, conservation programs, export promotion, 
     research, and rural development. This year they are caught in 
     the debate between budget constraints and the traditional 
     constituencies that support farm programs.
       Without much doubt, these programs have contributed to the 
     stability and strength of American agriculture. American 
     farmers produce the safest and cheapest food supply in the 
     world. Americans spend less than 15% of their income on 
     food--far less than our major competitors. While the number 
     of Americans working on farms may be small (2%), almost 20% 
     of the country is involved in production, processing, 
     marketing, transport, sale, and export of agricultural 
     products. Agriculture's success strengthens the American 
     economy.
       But, like most areas of the federal budget, farm spending 
     will be reduced over the next several years. The debate in 
     Congress centers on the depth and composition of those cuts. 
     Unfortunately, the congressional leadership may include major 
     farm programs in a huge omnibus budget reconciliation bill. 
     This seven-year budget bill will include major changes in 
     Medicare, welfare, defense, student loans, taxes, and 
     hundreds of other agencies and programs. It will be thousands 
     of pages long. Because of the enormous size of the 
     reconciliation bill, debate on the farm bill may be severely 
     limited on the House floor. Several different farm bill 
     proposals are pending.


                          single-payment plan

       This proposal would replace all commodity programs with one 
     yearly payment. This plan would cut farm assistance almost a 
     half, from about $9 billion this year to $5 billion in 2002. 
     Farmers would receive one reduced payment each year based on 
     a percentage of their historical payments. Farmers would not 
     have to raise crops to receive payments, but they would be 
     required to maintain existing conservation plans.
       One advantage of this proposal is that it separates 
     payments from crop planting requirements, and farmers would 
     be more free to farm according to the market. A disadvantage 
     is that, in bad years, farm payments would still decrease, 
     and many farmers could be forced out of business. This 
     proposal also makes no effort to reform current conservation 
     programs, which favor Great Plains states at the expense of 
     hillier areas such as Southern Indiana.


                        Lower Target Price Plan

       Another proposal would make equally deep cuts, but keep the 
     basic programs. For most crops, the government currently sets 
     a target price and pays farmers a deficiency payment when 
     prices fall below the target. This plan would lower those 
     target prices 2 to 3 percent each year for seven years. That 
     means that deficiency payments would eventually be paid only 
     if prices dropped to extremely low levels. This plan would 
     keep the link between production and payments and allow 
     reforms in other programs. However, if payments are cut too 
     low, farmers might leave the programs, threatening erosion 
     control and other conservation efforts to protect safe 
     drinking water.


                            Other proposals

       Urban Members have proposed abolishing farm programs 
     entirely, or reducing payments to large corporate farms. 
     Other Members have suggested an alternative budget that still 
     balances the budget by 2002, but makes only one-third of the 
     cuts in farm programs described above. It is not clear which 
     of these proposals will be considered on the House floor.


                                My Goals

       I believe we should move aggressively to a market-oriented 
     farm policy. Farmers must have increased planting flexibility 
     to respond to world markets, and regulations must be 
     significantly reduced. Cuts in farm programs will be 
     necessary to balance the budget, but farmers should not bear 
     a disproportionate share of the burden.
       Regulation: Regulation should be reduced. Farm programs 
     must be streamlined and made more flexible at the local 
     level, with an emphasis on voluntary incentives rather than 
     mandates. All regulations should be based on sound science, 
     and the cost of regulations should be weighed against their 
     benefits.
       Research: Agricultural research and extension have given 
     U.S. farmers their competitive edge. I do not believe 
     agricultural research should be reduced. With global 
     competition and market reforms, research should be a top 
     agricultural priority. Research boosts production and 
     develops innovative agricultural products, such as ethanol, 
     soydiesel, and biodegradable ink.
       Trade: The United States should aggressively act to open 
     new markets for American farmers. We should continue strong 
     export promotion programs to maintain U.S. market share, so 
     long as our competitors do the same. Small businesses, such 
     as food processors and forest product manufacturers in 
     Southern Indiana, depend increasingly on exports for growth. 
     U.S. export promotion programs should be aimed more at these 
     smaller businesses.
       Conservation Programs: Important conservation programs 
     should continue. The Conservation Reserve Program (CRP), 
     which removes environmentally important land from production, 
     should be targeted to more environmentally sensitive areas, 
     such as rolling hills, waterways, and wildlife areas.
       Supply Management: Programs that limit crop production 
     should be cut back. Current production controls stabilize 
     prices in years of surplus by removing land from production. 
     This reduces crop supplies and increases prices. However, 
     when U.S. farmers produce less, foreign farmers gain world 
     market share and American agribusiness loses money. Strict 
     supply management programs place U.S. farmers at a 
     competitive disadvantage.


                               Conclusion

       In the next few weeks, I am concerned these important 
     considerations may be lost in the rush to complete a mammoth 
     budget reconciliation bill. Farm legislation is too important 
     to brush off with minimal consideration in the overall budget 
     and reform debate.
       The farm bill must maintain the strength of American 
     agriculture and move toward free market principles. The farm 
     bill should increase farmer flexibility, decrease 
     regulations, preserve a safe and stable food supply, and 
     provide family farmers with a decent return for their labor 
     and investment.
     

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