[Congressional Record Volume 141, Number 192 (Tuesday, December 5, 1995)]
[Senate]
[Pages S17998-S18002]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             THE FARM PROVISIONS OF THE RECONCILIATION BILL

  Mr. JOHNSTON. Mr. President, we knew that when the farm provisions of 
the reconciliation bill were agreed to, they were bad for the State of 
Louisiana, but we had no idea how bad these provisions were for the 
State of Louisiana when they were passed.
  The reason is, Mr. President, we had no opportunity to be involved in 
this, no input into the provisions of it, no ability to evaluate it, no 
ability to discuss it. It was in conference committee and the 
reconciliation bill. The chairman of the House Agriculture Committee 
met with the Speaker of the House and, boom, ipso facto, it was created 
out of the ashes in whole part without any input from anybody.
  Mr. President, now we have evaluated this bill. I can tell my 
colleagues that the agricultural provisions of the reconciliation bill 
will simply destroy the cotton industry and the rice industry in the 
State of Louisiana.
  Let me repeat that: The agricultural provisions of the reconciliation 
bill will destroy the rice industry and the cotton industry in the 
State of Louisiana.
  Mr. President, these are two of our largest crops. They contribute 
over $2 billion to the State of Louisiana, 7,000 direct jobs and 27,000 
indirect agriculture jobs, according to Louisiana State University and 
the Louisiana Cooperative Extension Service.
  Mr. President, they have done an analysis of what the bill does for 
rice and cotton. They have taken a typical Louisiana rice tenant farm, 
which is 287 planted acres--and this takes up about 90 percent of our 
tenant farms in the State of Louisiana--and they have a whole series of 
calculations as to what the economic effect on that rice farmer will 
be.
  Mr. President, I ask unanimous consent that the calculations which 
they have done in great detail both as to the comparison of net returns 
for cotton, net returns for rice under the conference committee, and 
rice gross returns under alternative farm program, that these figures 
be printed in the Record at this time.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

         COMPARISON OF NET RETURNS FOR COTTON UNDER CONFERENCE COMMITTEE FARM PROPOSAL AND EXTENSION OF CURRENT FARM BILL, LOUISIANA, 1996-2002         
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             1996         1997          1998          1999          2000          2001          2002    
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            ............
                  Analysis Parameters                                                                                                                   
                                                                                                                                                        
Cotton farm acreage:                                                                                                                                    
(6) (acres)                                                                                                                                             
    Base acres.........................................          353          353           353           353           353           353           353 
    Percent of base paid...............................           85           85            85            85            85            85            85 
    Acres planted (85 percent of base) \1\.............          300          300           300           300           300           300           300 
Cotton yields:                                                                                                                                          
(6) (lbs/acre)                                                                                                                                          
    Louisiana actual yield.............................          740          740           740           740           740           740           740 
    Louisiana program yield............................          722          722           722           722           722           722           722 
Current program parameters:                                                                                                                             
(6) (cents/lb)                                                                                                                                          
    Target price.......................................        72.90        72.90         72.90         72.90         72.90         72.90         72.90 
    Loan rate..........................................        50.00        50.00         50.00         50.00         50.00         50.00         50.00 
    Estimated deficiency payment.......................        13.22        13.22         13.22         13.22         13.22         13.22         13.22 
Conference program parameters:                                                                                                                          
(6) (acres)                                                                                                                                             
    Estimated transition payment \2\...................         7.93         7.53          8.06          7.74          7.09          5.71          5.50 
    Loan rate..........................................        50.00        50.00         50.00         50.00         50.00         50.00         50.00 
Market price level analyzed:                                                                                                                            
(6) (cents/lb)                                                                                                                                          
    1990-94 Louisiana average price....................        59.68        59.68         59.68         59.68         59.68         59.68         59.68 
                                                                                                                                                        
        Estimated Net Returns (tenant operator)                                                                                                         
                                                                                                                                                        
Current program                                                                                                                                         
(6) (Total cotton returns ($) per farm)                                                                                                                 
    Total farm market returns \3\......................      149,720      149,720       149,720       149,720       149,720       149,720       149,720 
    Total farm deficiency payments.....................       28,639       28,639        28,639        28,639        28,639        28,639        28,639 
                                                        ------------------------------------------------------------------------------------------------
    Total farm gross returns \4\.......................      178,359      178,359       178,359       178,359       178,359       178,359       178,359 
                                                        ================================================================================================
    Land rent (25 percent).............................       44,590       44,590        44,590        44,590        44,590        44,590        44,590 
    Net returns above land rent........................      133,769      133,769       133,769       133,769       133,769       133,769       133,769 
    Variable costs ($332.73/acre)......................       99,836      102,831       105,916       109,093       112,366       115,737       119,209 
    Net returns above variable costs...................       33,933       30,938        27,854        24,676        21,403        18,032        14,560 
    Fixed costs ($72.09/acre)..........................       21,631       21,847        22,065        22,286        22,509        22,734        22,961 

[[Page S 17999]]
                                                                                                                                                        
    Net returns above total costs......................       12,303        9,092         5,788         2,390        (1,106)       (4,702)       (8,401)
Conference program:                                                                                                                                     
    Total farm market returns \3\......................      149,720      149,720       149,720       149,720       149,720       149,720       149,720 
    Total farm transition payments.....................       17,179       16,313        17,461        16,768        15,359        12,370        11,915 
                                                        ------------------------------------------------------------------------------------------------
    Total farm gross returns \4\.......................      166,899      166,032       167,180       166,487       165,079       162,089       161,635 
                                                        ================================================================================================
    Land rent (25 percent).............................       41,725       41,508        41,795        41,622        41,270        40,522        40,409 
    Net returns above land rent........................      125,174      124,524       125,385       124,865       123,809       121,567       121,226 
    Variable costs ($332.73/acre)......................       99,836      102,831       105,916       109,093       112,366       115,737       119,209 
    Net returns above variable costs...................       25,338       21,693        19,470        15,772        11,443         5,830         2.017 
    Fixed costs ($72.09/acre)..........................       21,631       21,847        22,065        22,286        22,509        22,734        22,961 
    Net returns above total costs......................        3,708         (153)       (2,596)       (6,514)      (11,065)      (16,904)      (20,944)
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Estimated planted acreage level at maximum deficiency payment rate under $50,000 payment limitation.                                                
\2\ Preliminary payment rates under Agricultural Market Transition Program, November 1995.                                                              
\3\ Includes sales of cottonseed valued at $0.05 per lb.                                                                                                
\4\ Marketing loan payments are excluded from the analysis since the provisions for a marketing loan are the same under both programs.                  



          COMPARISON OF NET RETURNS FOR RICE UNDER CONFERENCE COMMITTEE FARM PROPOSAL AND EXTENSION OF CURRENT FARM BILL, LOUISIANA, 1996-2002          
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            1996          1997          1998          1999          2000          2001          2002    
--------------------------------------------------------------------------------------------------------------------------------------------------------
                  Analysis Parameters                                                                                                                   
                                                                                                                                                        
Rice farm acreage:                                                                                                                                      
(6)(acres)                                                                                                                                              
    Base acres........................................          338           338           338           338           338           338           338 
    Percent of base paid..............................           85            85            85            85            85            85            85 
    Acres planted (85 percent of base) \1\............          287           287           287           287           287           287           287 
Rice yields:                                                                                                                                            
(6)(cwt/acre)                                                                                                                                           
    Louisiana actual yield............................        48.00         48.00         48.00         48.00         48.00         48.00         48.00 
    Louisiana program yield...........................        41.31         41.31         41.31         41.31         41.31         41.31         41.31 
Current program parameters:                                                                                                                             
(6)($/cwt)                                                                                                                                              
    Target price......................................        10.71         10.71         10.71         10.71         10.71         10.71         10.71 
    Loan rate.........................................         6.50          6.50          6.50          6.50          6.50          6.50          6.50 
    Estimated deficiency payment......................         3.82          3.82          3.82          3.82          3.82          3.82          3.82 
Conference program parameters:                                                                                                                          
(6)($/cwt)                                                                                                                                              
    Estimated transition payment \2\..................         1.52          2.66          2.86          2.77          2.53          2.04          1.98 
    Loan rate.........................................         6.50          6.50          6.50          6.50          6.50          6.50          6.50 
Market price level analyzed:                                                                                                                            
(6)($/cwt)                                                                                                                                              
    1990-94 Louisiana average price...................         6.89          6.89          6.89          6.89          6.89          6.89          6.89 
                                                                                                                                                        
        Estimated Net Returns (tenant operator)                                                                                                         
                                                                                                                                                        
Current program:                                                                                                                                        
(6)(Total rice returns ($) per farm)                                                                                                                    
    Total farm market returns.........................       95,016        95,016        95,016        95,016        95,016        95,016        95,016 
    Total farm deficiency payments....................       45,337        45,337        45,337        45,337        45,337        45,337        45,337 
                                                       -------------------------------------------------------------------------------------------------
    Total farm gross returns \3\......................      140,353       140,353       140,353       140,353       140,353       140,353       140,353 
                                                       =================================================================================================
    Land and water rent (20 percent for each).........       56,141        56,141        56,141        56,141        56,141        56,141        56,141 
    Net returns above land/water rent.................       84,212        84,212        84,212        84,212        84,212        84,212        84,212 
    Variable costs....................................       67,605        69,633        71,722        73,873        76,090        78,372       80, 723 
    Net returns above variable costs..................       16,607        14,579        12,490        10,338         8,122         5,840         3,488 
    Fixed costs.......................................       13,543        13,679        13,816        13,954        14,093        14,234        14,377 
    Net returns above total costs.....................        3,064           900        (1,325)       (3,615)       (5,971)       (8,395)      (10,888)
Conference program:                                                                                                                                     
    Total farm market returns.........................       95,016        95,016        95,016        95,016        95,016        95,016        95,016 
    Total farm transition payments....................       18,040        31,570        33,944        32,875        30,027        24,211        23,499 
                                                       -------------------------------------------------------------------------------------------------
    Total farm gross payments \3\.....................      113,056       126,586       128,959       127,891       125,043       119,227       118,515 
                                                       =================================================================================================
    Land and water rent (20 percent for each).........       45,222        50,634        51,584        51,156        50,017        47,691        47,406 
    Net returns above land/water rent.................       67,833        75,951        77,376        76,735        75,026        71,536        71,109 
    Variable costs....................................       67,605        69,633        71,722        73,873        76,090        78,372        80,723 
    Net returns above variable costs..................          229         6,319         5,654         2,861        (1,064)       (6,836)       (9,614)
    Fixed costs.......................................       13,543        13,679        13,816        13,954        14,093        14,234        14,377 
    Net returns above total costs.....................      (13,314)       (7,360)       (8,162)      (11,092)      (15,157)      (21,070)      (23,991)
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Estimated planted acreage level at maximum deficiency payment rate under $50,000 payment limitation.                                                
\2\ Preliminary payment rates under Agricultural Market Transition Program, November 1995.                                                              
\3\ Marketing loan payments are excluded from the analysis since the provisions for a marketing loan are the same under both programs.                  


                                      LOUISIANA RICE GROSS RETURNS UNDER ALTERNATIVE FARM BILL PROPOSALS, 1996-2002                                     
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   1996         1997         1998         1999         2000         2001         2002   
--------------------------------------------------------------------------------------------------------------------------------------------------------
Rice yields:                                                                                                                                            
(6) (cwt/acre)                                                                                                                                          
    Louisiana actual yield...................................        48.00        48.00        48.00        48.00        48.00        48.00        48.00
    Louisiana program yield..................................        41.31        41.31        41.31        41.31        41.31        41.31        41.31
Current program:                                                                                                                                        
(6) (acres)                                                                                                                                             
    Base acres...............................................          100          100          100          100          100          100          100
    Percent of base paid.....................................           85           85           85           85           85           85           85
    Acres planted (85 percent of base).......................           85           85           85           85           85           85           85
Price/payment rates:                                                                                                                                    
(6) ($/cwt)                                                                                                                                             
    Target price.............................................        10.71        10.71        10.71        10.71        10.71        10.71        10.71
    Loan rate................................................         6.50         6.50         6.50         6.50         6.50         6.50         6.50
    1990-94 Louisiana average price..........................         6.89         6.89         6.89         6.89         6.89         6.89         6.89
    Deficiency payment.......................................         3.82         3.82         3.82         3.82         3.82         3.82         3.82
Estimated gross returns:                                                                                                                                
(6) (Total rice returns ($))                                                                                                                            
    Total farm market returns................................       28,111       28,111       28,111       28,111       28,111       28,111       28,111
    Total farm deficiency payments \1\.......................       13,413       13,413       13,413       13,413       13,413       13,413       13,413
                                                              ------------------------------------------------------------------------------------------
    Total farm gross returns.................................       41,252       41,252       41,252       41,252       41,252       41,252       41,252
                                                              ==========================================================================================
Conference bill:                                                                                                                                        
(6) (acres)                                                                                                                                             
    Base acres...............................................          100          100          100          100          100          100          100
    Percent of base paid.....................................           85           85           85           85           85           85           85
    Acres planted (85 percent of base).......................           85           85           85           85           85           85           85
Price/payment rates:                                                                                                                                    
(6) ($/cwt)                                                                                                                                             
    Loan rate................................................         6.50         6.50         6.50         6.50         6.50         6.50         6.50
    1990-94 Louisiana average price..........................         6.89         6.89         6.89         6.89         6.89         6.89         6.89
    Transition payment.......................................         1.52         2.66         2.86         2.77         2.53         2.04         1.98
Estimated gross returns:                                                                                                                                
(6) (Total rice returns ($))                                                                                                                            
    Total farm market returns................................       28,111       28,111       28,111       28,111       28,111       28,111       28,111
    Total farm transition payments \1\.......................        5,337        9,340       10,042        9,726        8,884        7,163        6,952
    Percent change from current program \3\..................          -60          -30          -25          -27          -34          -47          -48
                                                              ------------------------------------------------------------------------------------------
    Total farm gross returns.................................       33,448       37,451       38,154       37,838       36,995       35,274       35,064
                                                              ==========================================================================================

[[Page S 18000]]
                                                                                                                                                        
House bill:                                                                                                                                             
(6) (acres)                                                                                                                                             
    Base acres...............................................          100          100          100          100          100          100          100
    Percent of base paid.....................................          100          100          100          100          100          100          100
    Acres planted (85 percent of base).......................           85           85           85           85           85           85           85
Price/payment rates:                                                                                                                                    
(6) ($/cwt)                                                                                                                                             
    Loan rate................................................         6.50         6.50         6.50         6.50         6.50         6.50         6.50
    1990-94 Louisiana average price..........................         6.89         6.89         6.89         6.89         6.89         6.89         6.89
    Transition payment.......................................         4.10         3.98         4.26         4.13         3.80         3.12         3.04
Estimated gross returns:                                                                                                                                
(6) (Total rice returns ($))                                                                                                                            
    Total farm market returns................................       28,111       28,111       28,111       28,111       28,111       28,111       28,111
    Total farm deficiency payments \2\.......................       16,937       16,441       17,598       17,061       15,698       12,889       12,558
    Percent change from current program \3\..................           26           23           31           27           17           -4           -6
                                                              ------------------------------------------------------------------------------------------
    Total farm gross returns.................................       45,048      44,553,       45,709       45,172       43,809       41,000       40,669
                                                              ==========================================================================================
Senate bill:                                                                                                                                            
(6) (acres)                                                                                                                                             
    Base acres...............................................          100          100          100          100          100          100          100
    Percent of base paid.....................................           70           70           70           70           70           70           70
    Acres planted (85 percent of base).......................           85           85           85           85           85           85           85
Price/payment rates:                                                                                                                                    
(6) ($/cwt)                                                                                                                                             
    Target price.............................................        10.71        10.71        10.71        10.71        10.71        10.71        10.71
    Loan rate................................................         6.50         6.50         6.50         6.50         6.50         6.50         6.50
    1990-94 Louisiana average price..........................         6.89         6.89         6.89         6.89         6.89         6.89         6.89
    Deficiency payment.......................................         3.82         3.82         3.82         3.48         3.23         2.89         2.66
Estimated gross returns:                                                                                                                                
(6) (Total rice returns ($))                                                                                                                            
    Total farm market returns................................       28,111       28,111       28,111       28,111       28,111       28,111       28,111
    Total farm deficiency payments \1\.......................       11,046       11,046       11,046       10,063        9,340        8,357        7,692
    change from current program \3\..........................          -18          -18          -18          -25          -30          -38          -43
                                                              ------------------------------------------------------------------------------------------
    Total farm gross returns.................................       39,157       39,157       39,157       38,174       37,451       36,468       35,803
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Marketing loan payments not included.                                                                                                               
\2\ No marketing loan program in House bill.                                                                                                            
\3\ Percent change in program payments from continuation of current program (excluding marketing loan).                                                 



        COMPARISON OF GROSS RETURNS FOR COTTON UNDER CONFERENCE COMMITTEE FARM PROPOSAL AND EXTENSION OF CURRENT FARM BILL, LOUISIANA, 1996-2002        
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   1996         1997         1998         1999         2000         2001         2002   
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                        
                     Analysis Parameters                                                                                                                
                                                                                                                                                        
Cotton farm acreage:                                                                                                                                    
(6) (acres)                                                                                                                                             
    Base acres...............................................          353          353          353          353          353          353          353
    Percent of base paid.....................................           85           85           85           85           85           85           85
    Acres planted (85 percent of base)\1\....................          300          300          300          300          300          300          300
Cotton yields:                                                                                                                                          
(6) (lbs/acre)                                                                                                                                          
    Louisiana actual yield...................................          740          740          740          740          740          740          740
    Louisiana program yield..................................          722          722          722          722          722          722          722
Current program parameters:                                                                                                                             
(6) (cents/lb)                                                                                                                                          
    Target price.............................................        72.90        72.90        72.90        72.90        72.90        72.90        72.90
    Loan rate................................................        50.00        50.00        50.00        50.00        50.00        50.00        50.00
Conference program parameters:                                                                                                                          
(6) (cents/lb)                                                                                                                                          
    Estimated transition payment \2\.........................         7.93         7.53         8.06         7.74         7.09         5.71         5.50
    Loan rate................................................        50.00        50.00        50.00        50.00        50.00        50.00        50.00
Market price levels analyzed:                                                                                                                           
(6) (cents/lb)                                                                                                                                          
    10 percent above CBO baseline............................        70.40        67.10        66.00        64.90        66.00        66.00        66.00
    CBO baseline.............................................        64.00        61.00        60.00        59.00        60.00        60.00        60.00
    10 percent below CBO baseline............................        57.60        54.90        54.00        53.10        54.00        54.00        54.00
                                                                                                                                                        
                   Estimated Gross Returns                                                                                                              
                                                                                                                                                        
``Current program'':                                                                                                                                    
(6) (Total cotton returns ($) per farm)                                                                                                                 
    10 percent above CBO baseline prices:                                                                                                               
        Total farm market returns............................      156,314      148,987      146,544      144,102      146,544      146,544      146,544
        Total farm deficiency payments.......................        5,416       12,565       14,948       17,331       14,948       14,948       14,948
                                                              ------------------------------------------------------------------------------------------
        Total farm gross returns\3\..........................      161,730      161,552      161,492      161,433      161,492      161,492      161,492
                                                              ==========================================================================================
    CBO baseline prices:                                                                                                                                
        Total farm market returns............................      142,104      135,443      133,222      131,002      133,222      133,222      133,222
        Total farm deficiency payments.......................       19,281       25,780       27,946       30,112       27,946       27,946       27,946
                                                              ------------------------------------------------------------------------------------------
        Total farm gross returns\3\..........................      161,384      161,222      161,168      161,114      161,168      161,168      161,168
                                                              ==========================================================================================
    10 percent below CBO baseline prices:                                                                                                               
        Total farm market returns............................      127,893      121,898      119,900      117,902      119,900      119,900      119,900
        Total farm deficiency payments.......................       33,145       38,994       40,944       42,894       40,944       40,944       40,944
                                                              ------------------------------------------------------------------------------------------
        Total farm gross returns\3\..........................      161,039      160,893      160,844      160,796      160,844      160,844      160,844
                                                              ==========================================================================================
``Conference program'':                                                                                                                                 
    10 percent above CBO baseline prices:                                                                                                               
        Total farm market returns............................      156,314      148,987      146,544      144,102      146,544      146,544      146,544
        Total farm transition payments.......................       17,179       16,313       17,461       16,768       15,359       12,370       11,915
                                                              ------------------------------------------------------------------------------------------
        Total farm gross returns\3\..........................      173,493      165,300      164,005      160,870      161,904      158,914      158,459
                                                              ==========================================================================================
        Percent change from current program..................          7.3          2.3          1.6         -0.3          0.3         -1.6         -1.9
CBO baseline prices:                                                                                                                                    
    Total farm market returns................................      142,104      135,443      133,222      131,002      133,222      133,222      133,222
    Total farm transition payments...........................       17,179       16,313       17,461       16,768       15,359       12,370       11,915
                                                              ------------------------------------------------------------------------------------------
    Total farm gross returns\3\..............................      159,283      151,755      150,683      147,769      148,582      145,592      145,137
                                                              ==========================================================================================
    Percent change from current program......................         -1.3         -5.9         -6.5         -8.3         -7.8         -9.7         -9.9
10 percent below CBO baseline prices:                                                                                                                   
    Total farm market returns................................      127,893      121,898      119,900      117,902      119,900      119,900      119,900
    Total farm transition payments...........................       17,179       16,313       17,461       16,768       15,359       12,370       11,915
                                                              ------------------------------------------------------------------------------------------
    Total farm gross returns\3\..............................      145,073      138,211      137,361      134,669      135,259      132,270      131,815
                                                              ==========================================================================================
    Percent change from current program......................         -9.9        -14.1        -14.6        -16.2        -15.9        -17.8        -18.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Estimated planted acreage level at maximum deficiency payment rate under $50,000 payment limitation.                                                
\2\ Preliminary payment rates under Agricultural Market Transition Program, November 1995.                                                              
\3\ Marketing loan payments are excluded from the analysis since the provisions for a marketing loan are the same under both programs.                  

 
[[Page S 18001]]


         COMPARISON OF GROSS RETURNS FOR RICE UNDER CONFERENCE COMMITTEE FARM PROPOSAL AND EXTENSION OF CURRENT FARM BILL, LOUISIANA, 1996-2002         
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   1996         1997         1998         1999         2000         2001         2002   
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                        
                     Analysis Parameters                                                                                                                
                                                                                                                                                        
Rice farm acreage:                                                                                                                                      
(6) (acres)                                                                                                                                             
    Base acres...............................................          338          338          338          338          338          338          338
    Percent of base paid.....................................           85           85           85           85           85           85           85
    Acres planted (85% of base)\1\...........................          287          287          287          287          287          287          287
Rice yields:                                                                                                                                            
(6) (cwt/acre)                                                                                                                                          
    Louisiana actual yield...................................        48.00        48.00        48.00        48.00        48.00        48.00        48.00
    Louisiana program yield..................................        41.31        41.31        41.31        41.31        41.31        41.31        41.31
Current program parameters:                                                                                                                             
(6) ($/cwt)                                                                                                                                             
    Target price.............................................        10.71        10.71        10.71        10.71        10.71        10.71        10.71
    Loan rate................................................         6.50         6.50         6.50         6.50         6.50         6.50         6.50
    Estimated deficiency payment.............................         3.82         3.82         3.82         3.82         3.82         3.82         3.82
Conference program parameters:                                                                                                                          
(6) ($/cwt)                                                                                                                                             
    Estimated transition payment \2\.........................         1.52         2.66         2.86         2.77         2.53         2.04         1.98
    Loan rate................................................         6.50         6.50         6.50         6.50         6.50         6.50         6.50
Market price level analyzed:                                                                                                                            
(6) ($/cwt)                                                                                                                                             
    1990-94 Louisiana average price..........................         6.89         6.89         6.89         6.89         6.89         6.89         6.89
                                                                                                                                                        
                   Estimated Gross Returns                                                                                                              
                                                                                                                                                        
Current program:                                                                                                                                        
(6) (Total rice returns ($) per farm)                                                                                                                   
    Total farm market returns................................       95,016       95,016       95,016       95,016       95,016       95,016       95,016
    Total farm deficiency payments...........................       45,337       45,337       45,337       45,337       45,337       45,337       45,337
                                                              ------------------------------------------------------------------------------------------
    Total farm gross returns \3\.............................      140,353      140,353      140,353      140,353      140,353      140,353      140,353
                                                              ==========================================================================================
Conference program:                                                                                                                                     
    Total farm market returns................................       95,016       95,016       95,016       95,016       95,016       95,016       95,016
    Total farm transition payments...........................       18,040       31,570       33,944       32,875       30,027       24,211       23,499
                                                              ------------------------------------------------------------------------------------------
    Total farm gross returns \3\.............................      113,056      126,586      128,959      127,891      125,043      119,227      118,515
                                                              ==========================================================================================
Percent change from current program:                                                                                                                    
    Percent change in market returns.........................          0.0          0.0          0.0          0.0          0.0          0.0          0.0
    Percent change in program payments.......................        -60.2        -30.4        -25.1        -27.5        -33.8        -46.6        -48.2
    Percent change in gross returns \3\......................        -19.4         -9.8         -8.1         -8.9        -10.9        -15.1       -15.6 
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Estimated planted acreage level at maximum deficiency payment rate under $50,000 payment limitation.                                                
\2\ Preliminary payment rates under Agricultural Market Transition Program, November 1995.                                                              
\3\ Marketing loan payments are excluded from the analysis since the provisions for a marketing loan are the same under both programs.                  

  Mr. JOHNSTON. Mr. President, when you boil the figures down, what it 
shows is that the average rice farmer in 1996 has a net income of minus 
$13,314. The average rice farmer in Louisiana for 1996 loses $13,314. 
In 1997, it is $7,360.
  You say, why would he lose twice as much in 1996 as he would lose in 
1997? The reason is, under this bill, incredibly, they have to pay back 
the payment they received for the last quarter of calendar 1996. They 
have to pay that back, so that you actually lose $13,314.
  It gets worse from there. In 1998, $8,162; in 1999, $11,092; in the 
year 2000, $15,157; in 2001, $21,070; and 2002, $23,991.
  Mr. President, these are not rich farmers but the average rice farmer 
in Louisiana who has planted 287 acres. Mr. President, this is not some 
Democratic Policy Committee who has come out with these figures; it is 
the Louisiana State University Agriculture Department.
  Mr. President, this is actually not going to happen. The reason is 
that they are not going to plant the rice. With these kind of economic 
figures shown to the bankers, no banker is going to lend any money to 
plant this crop. So you will not have these losses. You will not have a 
rice industry in the State of Louisiana because it shows a negative 
cash flow for each of these years through the year 2002.
  Again, Mr. President, this is the Louisiana State University who has 
come up with these figures.
  Mr. President, it is only slightly less bad for cotton. Under 
cotton--and all of the figures under which we calculated each one of 
these figures has now been put into the Record--for the average cotton 
farmer, that is 300 planted acres, he makes $3,708 in 1996, begins to 
lose the next year, and by the year 2002 he is losing a net of $20,944.
  This, again, Mr. President, is the average cotton farmer in the State 
of Louisiana.
  You say, how in the world could they have done such folly in this 
bill? Mr. President, they did it without hearings, they did it without 
consultation, they did it without input. The Speaker got together with 
the head of the Agriculture Committee in the House and, bam, here it 
came. Here is the result.
  Mr. President, this is an emergency. I think sooner or later this is 
going to be straightened out, because, as George Bush said about the 
invasion of Kuwait, this cannot stand. It just cannot be, Mr. 
President.
  This Congress has done some dumb things, Mr. President, but we have 
never that I know of intentionally wiped out an industry--the cotton 
industry, the rice industry--in a State. If this is happening in the 
State of Louisiana, it is going to happen elsewhere across the country. 
We cannot intentionally do this.
  Mr. President, it is an emergency that needs to be corrected now 
because if we wait, we are going to miss this crop year. Typically, Mr. 
President, the preparations for the crop year begin in December. The 
farmers decide what kind of money they are going to need to borrow, 
what kind of crops they want to plant, how much it is going to cost, et 
cetera, and they begin those negotiations with the bank, typically, in 
December. Certainly by the middle of January, they must have their bank 
arrangements pretty well in line because they have to plant that crop 
in the spring.
  They have to not only order the seed, insecticide, pesticide, and the 
other things they will need for that crop, but their suppliers need to 
know sufficiently in advance how much they will need to order, how much 
seed to have on hand, how much insecticide.
  Mr. President, you cannot pass a rule one week and expect the crop to 
be planted the next week.
  Mr. President, you might ask, without support, if the Louisiana rice 
industry cannot survive, why is it that we plant rice in the United 
States? Why not just let the whole thing move overseas?
  The reason is, Mr. President, that the subsidy, the support which we 
have for agriculture in the United States for rice, is a fraction of 
what it is in the European market, Japan, and our other foreign 
competitors. The fact of the matter is the EU, the European Union, 
subsidizes their farmers three to five times more than they do in the 
United States. They place high tariffs on some U.S. agricultural 
products which create artificially high prices.
  I am informed, Mr. President--and I will get the exact figure and 
supply them for the Record later--I am informed that rice can fetch as 
high a price as $27 per 100-weight in Europe, compared to $6 in the 
United States.
  Mr. President, if we intentionally wipe out the rice industry and the 
cotton industry in the State of Louisiana and elsewhere in our country, 
then we will be subject to the manipulation of foreign suppliers who 
will dominate and monopolize the whole market.
  Mr. President, I do not believe there is time to legislate this year. 
Regulations must be put out under any new legislation that comes out, 
and regulations are going to take many weeks in order to determine how 
to interpret whatever law finally comes out. I believe it will be too 
late for the planting season even assuming that there is a 

[[Page S 18002]]
veto of the reconciliation bill, which surely there should be if these 
are representative of the kind of provisions that are in that bill. If 
the Congress passes a new bill, I do not believe there is going to be 
time to get the regs out to borrow the money, to make the preparations 
in order to get the crop out this year.
  So, Mr. President, what I am saying is the Congress needs to act as 
in an emergency and to extend the present law. We need to extend that 
present law so we can get the crop in the ground this year. If we do 
not do that, and if we have the reconciliation bill as passed, then we 
are going to wipe out the cotton and rice industry in the State of 
Louisiana and elsewhere in this country.

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