[Congressional Record Volume 142, Number 11 (Friday, January 26, 1996)]
[Senate]
[Pages S512-S513]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LUGAR (for himself, Mr. Dole, Mr. Helms, Mr. Cochran, Mr. 
        Craig, Mr. Grassley, Mr. Pressler, and Mr. Coverdell):
  S. 1541. a bill to extend, reform, and improve agricultural 
commodity, trade, conservation, and other programs, and for other 
purposes; read the first time.


                   agricultural market transition act

  Mr. LUGAR. Mr. President, I rise to support the Agricultural Market 
Transition Act of 1996. This legislation is identical to Title I of the 
Balanced Budget Act, with two changes which I shall mention shortly.
  Congress passed the Balanced Budget Act and the President, most 
unfortunately for the country, vetoed it. We hope that some spending 
cuts can be added to legislation raising the Federal debt limit. 
However, the veto creates a problem for U.S. agriculture.
  The problem is that commodity support programs for the next 7 years 
were part of the BBA. Existing authority for these programs has now 
expired. All that remain are outdated statutes from 1938 and 1949. The 
Clinton administration confirms that implementing these statues could 
add $10 to $12 billion to the cost of running farm programs for 1996 
crops alone.
  That is intolerable for taxpayers. Farmers do not support such an 
irresponsible policy. The solution is to enact a new farm bill.
  Farmers need to know what farm policies will be--not just for the 
next 12 months but for the next several years. We owe it to U.S. 
agriculture to enact a long-term plan, not a stopgap measure.
  This bill's agricultural provisions are a long-term plan endorsed by 
a broad spectrum of agricultural groups. From national groups like the 
American Farm Bureau Federation and the National Corn Growers 
Association, to state groups like the Kansas Association of Wheat 
Growers and the North Dakota Grain Growers, U.S. producer and 
agribusiness organizations support this plan.
  It is simple, in contrast to the needless complexity of current 
programs.
  It offers certainty. Farmers will know what their future payments 
will be. Taxpayers will know how much will be spent. U.S. agriculture 
will have security against future budget cuts.
  Finally, it is market-oriented. Farmers' payments will be the same 
even if they plant alternate crops. Producers' planting decisions will 
be based on the market--as they should be. Under the BBA, there will be 
full planting freedom, not arbitrary government production controls.
  Mr. President, I ask unanimous consent that a brief summary of this 
bill's provisions be printed in the Record.
  There being no objection, the summary was ordered to be printed in 
the Record, as follows:

           Subtitle A--Agricultural Market Transition Program

       Production flexibility contracts--Eligible producers (those 
     who had participated in the wheat, feed grains, cotton and 
     rice programs in any one of the past five years) can enter 
     into seven-year ``production flexibility contracts'' between 
     1996 and 2002. The deadline for entering into the contract 
     would be April 15, 1996. Payments would be made on September 
     30 of each year beginning in 1996. Farmers would also have 
     the option of receiving half of their annual payment by 
     December 15 of the previous year (except in 1996 when the 
     advance payment would be due within 60 days of the signing of 
     the contract.)
       Payment would be made on 85 percent of a farm's contract 
     acreage. On this acreage participants would be free to plant 
     any program crop, oilseed, industrial or experimental crop, 
     mung beans, lentils and dry peas. Planting of fruits and 
     vegetables would be prohibited on contract acres. These 
     commodity program changes will result in $8.6 billion in 
     budget savings over the next seven years.
       Peanuts--The legislation saves $434 million from the 
     federal peanut program, making it a no-cost program. The 
     price support program for peanuts is extended through 2002, 
     but the quota support rate is lowered from $678/tone to $610/
     ton. The price support escalator is eliminated. The 
     legislation eliminates the national poundage quota floor 
     (currently 1,350,000 tons) and undermarketing provisions of 
     current law. Previously considered reforms for quota 
     reduction, the sale, lease and transfer of quota across 
     county lines, and offers from handlers were removed from the 
     bill due to Byrd rule considerations. These reforms will 
     likely be taken up later as part of separate legislation.
       Sugar--In order to make the program more market-oriented, a 
     recourse loan system is implemented until imports reach 1.5 
     million short tons for FY 1997 1997-2002. The bill terminates 
     marketing allotments and implements a one cent penalty on 
     forfeited sugar. Provisions of current law that require the 
     Sugar Program to operate at no-net cost are retained in this 
     bill. It also retains the loan rate of raw cane sugar and 
     refined beet sugar at the 1995 levels, 18 cents and 22.9 
     cents respectively, and retains a nine-month loan. The 
     legislation would raise the assessment on sugar processors to 
     achieve $52 million in budget savings over seven years toward 
     deficit reduction.
       Nonrecourse marketing assistance loans--The conference 
     agreement establishes maximum loan rates at the following 
     (1995) levels: Rice: $6.50/cwt; Upland Cotton: $0.5192/lb; 
     Wheat: $2.58/bu; Corn: $1.89/bu; Soybeans: $4.92/bu; ELS 
     Cotton: $0.7965/lb.
       The Secretary would retain authority to make downward 
     adjustments to wheat and feed grains loan rates based on 
     specified stocks-to-use criteria. The bill also establishes a 
     minimum loan rate for rice at $6.50/cwt and cotton at $0.50/
     lb. The conference agreement also eliminates the 8-month 
     cotton loan extension. The loan rate provisions of the 
     conference agreement will save $107 million.
       Payment limitations--The conference agreement reduces the 
     current payment limitation by 20 percent, from $50,000 to 
     $40,000. The bill extends provisions of current law that 
     limit marketing loan gains and loan deficiency payments to 
     $75,000 per person per year. The payment limitation reduction 
     achieves $150 million in budget savings.
       Program authority elimination--This legislation repeals the 
     Agriculture Act of 1949 as well as the permanent law 
     provisions of the Agriculture Adjustment Act of 1938. Also 
     eliminated are authorities for the Farmer Owned Reserve and 
     the Emergency Livestock Feed Assistance Program.


                        subtitle b--conservation

       Conservation Reserve Program (CRP)--The CRP is capped at 
     the current level of 36.4 million acres for a savings of $569 
     million over seven years. Also adopted was an ``early out'' 
     provision to allow contract holders to terminate CRP 
     contracts upon written notification of the Secretary.
       Livestock Environmental Assistance Program (LEAP)--The 
     program is established to help livestock producers improve 
     environmental and water quality. The program makes available 
     $100 million annually to provide technical and cost-share 
     assistance in implementing structural and management 
     practices to protect water, soil and related resources from 
     degradation associated with livestock production.


         subtitle c--agricultural promotion and export programs

       Market Promotion Program (MPP)--MPP expenditures are capped 
     at $100 million through 2002 producing a savings of $60 
     million.
       Export Enhancement Program (EEP)--EEP expenditures are 
     capped at $350 million in 1996 and 1997; $500 million in 
     1998; $550 million in 1999; $579 million in 2000 and $478 
     million for 2001 and 2002. Total savings for EEP will be 
     $1.27 billion.


                       subtitle d--miscellaneous

       Crop insurance--The bill eliminates the mandatory nature of 
     catastrophic crop insurance, but requires producers to waive 
     all federal disaster assistance if they opt not to purchase 
     insurance. Dual delivery of crop insurance is eliminated in 
     those states that have adequate private crop insurance 
     delivery. The bill also corrects a provision of current law 
     by amending the Federal Crop Insurance Act to include seed 
     crops. The crop insurance provisions of the bill result in 
     net savings of $130 million.
       Agriculture quarantine and inspection--The bill amends the 
     Food, Agriculture, Conservation and Trade Act of 1990 to 
     allow the Secretary to collect and spend fees collected over 
     $100 million to cover the cost of providing quarantine and 
     inspection services for imports.
       Commodity Credit Corporation (CCC) interest rates--Rates on 
     CCC agriculture commodity loans are increased by 100 basis 
     points for a savings of $260 million over seven years.
  Mr. LUGAR. I would also like to mention two changes from the BBA as 
it passed the House and Senate.
  Under the Livestock Environmental Assistance Program, limits are 
placed on the size of operations that may receive benefits. The BBA 
contained 

[[Page S513]]
these limits but some felt that for dairy operations, the limits were 
too strict. Therefore, dairy operations of 700 or fewer cows will now 
be eligible.
  The other change deals with which crops may be planted on acres 
enrolled in income support contracts. The bill introduced today will 
treat fruit and vegetable crops in the same manner as current law--that 
is, they may not be planted on contract acres.
  Mr. President, the Agricultural Market Transition Act of 1996 
represents a bold departure from the past. It is a new direction for 
American agriculture. It will reduce Federal spending, reform price 
support programs, and prepare U.S. farmers for what promises to be an 
exciting new century, full of opportunities for the most efficient food 
producers in the world.
  Mr. GORTON. Mr. President, today I am pleased to join my colleagues 
Senators Craig, Dole, Lugar, Cochran, and Grassley, supporting a farm 
bill that will let our farmers farm according to the marketplace and 
stop the Federal Government from telling our farmers what crop to 
plant, when to plant, and how much to plant. These decisions belong to 
the farmer--not the Federal Government.
  On September 30 of last year the farm bill expired. Farmers in my 
State of Washington and across the country need to know what the farm 
program will be. They cannot wait any longer. Currently, farmers in my 
State are meeting with their bankers, making plans for this year's 
crop, determining their financial situation, and evaluating their 
equipment needs. As my good friend from Iowa, Senator Grassley, said on 
Tuesday, ``farmers of this country deserve to know what the farm 
program will be this year and they need to know as soon as possible.'' 
The senior Senator from Iowa is correct. We cannot in good conscience 
delay in passing a farm bill. We owe it to the American farmer to take 
action.
  Farmers in my State tell me that they want less Government, less red 
tape, and less paperwork. Farmers in my State simply want more 
flexibility; they want the Federal Government out of their lives. A 
market transition style farm program gives them what they have asked 
for and provides a seven year transition to full market-oriented 
farming.
  A market transition style farm program could not come at a better 
time. Many important developments have taken place since the completion 
of the Uruguay Round of the General Agreement of Tariffs and Trade 
[GATT]. I believe that GATT will continue to open new world markets for 
the United States, and with a farm program that allows our farmers to 
farm according to the marketplace we will provide them with the 
flexibility they need to respond quickly to the demands of emerging 
world markets.
  A market transition style farm program also moves us towards a 
balanced budget, saving nearly $13 billion in budget outlays over 7 
years. Since 1969, the last year in which there was a balanced budget 
in this country, we have piled debt on our shoulders and on the 
shoulders of our children and grandchildren of almost $5 trillion. That 
means, Mr. President, that a child born today inherits an obligation of 
some $187,000 during his or her life simply to pay interest on the 
national debt. This statistic alone starkly illustrates not just the 
fiscal and financial necessity, but the moral necessity of a sharp 
change in direction. This country can no longer continue goods and 
services for which it is unwilling to pay. If we do not change the way 
we do things here in Washington, DC, our children and grandchildren 
will suffer terribly.
  If we do balance the Federal budget we will provide American families 
and American farmers with better jobs, higher wages, lower interest 
rates, and economic certainty. All of this means more money in the 
pockets of American farmers. One thing is for certain, Mr. President: 
we must balance the budget and we must balance it now.
  For all of these reasons, Mr. President, I support my colleagues, 
Senators Craig, Dole, Lugar, Cochran, and Grassley, as we work together 
to provide American farmers with the flexibility they need to do what 
they do best: provide healthy, safe, and abundant food for families 
around the world.
                                 ______