[Congressional Record Volume 142, Number 14 (Thursday, February 1, 1996)]
[Senate]
[Pages S672-S676]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
AGRICULTURAL MARKET TRANSITION ACT OF 1996
The PRESIDING OFFICER (Mr. DeWine). Under the previous order, the
Senate will now resume consideration of S. 1541, which the clerk will
report.
The assistant legislative clerk read as follows:
A bill (S. 1541) to extend, reform, and improve
agricultural commodity, trade, conservation, and other
programs, and for other purposes.
The Senate resumed consideration of the bill.
Pending:
Craig (for Leahy-Lugar) amendment No. 3184, in the nature
of a substitute.
The PRESIDING OFFICER. The time for debate is equally divided between
now and 11:25.
Mr. LUGAR addressed the Chair.
The PRESIDING OFFICER. The Senator from Indiana.
Mr. LUGAR. Mr. President, I yield myself as much time as I may
require.
The PRESIDING OFFICER. The Senator is recognized.
Mr. LUGAR. Mr. President, in beginning debate on S. 1541, the farm
bill, let me just say that it is very important to farmers all over the
country who have been notifying Senators and Members of the House that
they want, certainly, a degree of certainty before they get into the
fields to plant.
They would like, as a matter of fact, to see the Congress at work on
this vital legislation. In response to that, the distinguished majority
leader has, in fact, called us to that cause today, as Senators are
aware.
This is a very important day. It is extraordinarily important
legislation for all of America. Farmers want to know what is going to
happen now. Hopefully, the Senate will provide that guidance through
constructive action to completion and passage of this legislation
today.
Over a year ago, at the beginning of the 1995--and now 1996--farm
bill debate, I posed 53 questions about future agricultural policy in
this country. The answers to those questions made it clear that a
status quo farm policy was not a good idea. S. 1541, the legislation
before us today, represents a bold new direction. It answers the 53
questions that I asked and that other Senators posed in a broad review
of farm policy in this country.
There were five basic reasons to support Senate bill 1541.
First of all, a good reason to support it is its simplicity of
approach. Traditional farm policy is so arcane that even many U.S.
Department of Agriculture officials can barely comprehend all of its
complexity. The bill we consider today offers a straightforward,
commonsense policy.
Second, the bill offers certainty. Farmers who sign contracts will
know their future payments for the next 7 years. Taxpayers,
importantly, will know precisely what money is going to be spent during
the next 7 years and that the budget savings we have already debated in
this Chamber are certain.
That is especially important, Mr. President, because as you will
recall,
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we debated a farm bill that has just expired, estimating that the
taxpayers' expense would be about $41 billion. In fact, the final cost
to the bill was close to $57 billion due to all the contingencies,
including the weather and foreign trade and demand. In this particular
instance it was important for those of us who favor a balanced budget
approach to know precisely how much was for agriculture, and for
farmers to know precisely the payments that would come to them.
Third, the bill does provide very substantial savings for taxpayers.
With this bill, agriculture has done its part to help balance the
Federal budget in 7 years. Senate bill 1541 will reduce Federal
spending by about $4.6 billion over the 7 years from a new baseline
which reflects actual market prices in this country.
I might add, Mr. President, that baseline recognizes that outlays, as
expenditures by taxpayers, to the farm community will be $7 to $8
billion less than earlier anticipated largely because market prices for
many of the farm programs are very high this year and, therefore, the
normal deficiency payments do not kick in under those formulas.
The fourth reason for supporting this legislation is its market
orientation. Farmers' payments will be the same even if they plant
alternate crops. As a matter of fact, they will make planting decisions
based on market forces, on the signs of prices in the market. Today
planting decisions affect eligibility for Government payments, and
subsidies have driven much of the business planning of many farmers.
Under Senate bill 1541, farmers will have full planting freedom,
thus, the label given to this act, the ``freedom to farm,'' the ability
to manage your land, to make decisions for the market. We will end, in
fact, Federal Government production controls. That is an important step
forward all by itself.
A fifth reason for support is that farmers support Senate bill 1541.
This long-term plan for U.S. agriculture has been endorsed by a wide
range of farm groups. National groups such as the American Farm Bureau
and the National Corn Growers and State groups such as the Kansas Wheat
Growers and the North Dakota Grain Growers have given strong
endorsement to this legislation.
Mr. President, the Senate has approved this bill once already as a
part of the Balanced Budget Act. Unfortunately for our Nation, the
President vetoed that act and thus vetoed the farm bill. That veto
creates a problem for U.S. agriculture. Since commodity support
programs were a part of the Balanced Budget Act, we are left with no
workable farm program for many crops, except for the outdated 1949 and
1938 laws, which could cause price supports. For wheat, for example,
for those farmers who had allotments in that period of time almost 50
years ago, those price supports could triple.
Now the Clinton administration confirms that implementing these old
statutes, the 1949 and the 1938 acts, could add $10 to $12 billion to
the cost of running farm programs for the 1996 crops alone. That is
clearly intolerable. We have talked, Mr. President, about savings as a
part of the Balanced Budget Act. Failure to enact this legislation
could mean that $10 to $12 billion in only 1 year alone would be added
to the deficit.
It is clear, Mr. President, that the Congress and the President will
be ridiculed by the public for gridlock, for inactivity, for myopia,
given the apparent crisis that lies immediately ahead of us. The new
bill must be fiscally responsible.
Proposals to raise loan rates, as some of our colleagues want to do,
potentially is a very expensive option. And some of our colleagues have
charged, in fact, that we have delayed writing a farm bill and that the
Senate bill 1541 was written without full participation, without
hearings.
Mr. President, Congress did produce a farm bill. It passed two Houses
and went as a part of the Balanced Budget Act to the President.
President Clinton vetoed it, and only that veto has prevented timely
passage of new farm laws.
Second, the Senate Agriculture Committee held thorough hearings. The
committee held 15 farm bill hearings in 1995 involving 157 witnesses
from all over our country. Additional and lengthy hearings were held on
farm legislation in the Budget Committee. Every conceivable approach to
farm policy was discussed in those hearings.
Much of the farm bill has, in fact, been developed in a bipartisan
way. In July 1995, the Agriculture Committee of the Senate gave
preliminary, but unanimous, approval to four titles of the farm bill.
They cover trade, farm credit, research, and rural development. Since
then, there have been further bipartisan efforts on a miscellaneous
title and a conservation title.
Some of our colleagues have declined to be involved in the balanced
budget amendment consideration. They informed us in the Agriculture
Committee that they would not vote for the cuts required by the
Balanced Budget Act. We were told that we would have to pass that act
with Republican votes alone in the committee, and we did so. If some
colleagues feel left out at this point, it is because they chose to be
left out. They were within their rights to take that option, but it is
strange now to hear complaints about a process that included 15 full
hearings and very thorough debate before passage of the farm bill from
the Senate Agriculture Committee.
I suspect the real complaint is with the substance of the bill. It
calls for the end of Government planting controls. It calls for freedom
to farm. It provides an entirely new outlook for American agriculture,
which I find very exciting as a farmer, as somebody who has walked
through this legislation not only as a legislator but as one who is
subject to it.
I will say, Mr. President, parenthetically, with the exception of the
distinguished Senator from Iowa, Senator Grassley, I am the only farmer
on the committee, the only one that might be visibly affected by this
legislation and have some idea of how it actually works. So from that
standpoint, I have a sense of liberation about the process, which is
shared, I might say, by farmers in the State of Ohio, the State of the
distinguished Chair, and Indiana, and, in large number, farmers in
Iowa, whom I have been visiting the last 2 days. They want action, and
that is why I am here as opposed to staying another day with friends in
Iowa with whom I have been visiting.
Fundamentally, a few of our colleagues do not want to reduce spending
on farm programs. That is their privilege, but most of us believe they
are mistaken. Most farmers know that they, as well as other Americans,
will benefit from a balanced budget. They know as well that our Nation
will be stronger for that, and they know that S. 1541 defines exactly
what the farm commitment is, and it is an acceptable commitment to farm
groups.
Therefore, Mr. President, S. 1541 is a bold departure from the past.
It is clearly a new direction. It will reduce Federal spending and
Federal deficits with certainty. It will reform farm programs and give
them both certainty and much greater simplicity, and it will prepare
U.S. agriculture for what promises to be a very exciting new century.
One of the great ironies of consideration of farm legislation during
the past year is that initially we talked in terms of Federal programs
very similar to the ones which we now have. As the Chair knows, for the
large program crops--corn, wheat, cotton, and rice--target prices are
established. If the market prices are below those target prices,
farmers may receive deficiency payments, the difference between the
two, the target price and the market price, for the crop history on the
covered acreage they have in the plan for which they have signed. These
are the so-called deficiency payments. Others would call them
subsidies. They have mounted up to very large totals in some years.
In this particular year of the farm bill, suddenly, export demand
took off in a very dynamic way. The Chinese changed from becoming
exporters to very strong importers. That provided new opportunities for
the United States in Southeast Asia, but our traditional customers in
Europe and in Japan come in for much stronger orders really across the
border. Cattle feeders and hog producers throughout this country have
continued to feed large herds of livestock and, despite the rising
price of feed, have continued the size of those herds.
[[Page S674]]
Mr. President, we have a situation unlike any that I have seen in
agriculture in the last generation in which clearly the price in the
market went way above the target price and remains there. If a farmer
were to go into the futures market this morning and he was bold enough
to know exactly what his crop was going to be for this year, the
planting of 1996 or 1997, a farmer could sell both crops for prices
higher than the target price for corn, for example. I addressed this
issue, as I mentioned to the Chair a moment ago, in Iowa in the last
few days, with farmers saying, ``What should we do? How much fertilizer
should we buy, or other inputs, for our crop?''
My advice has been to take a look at the markets, take a look at the
futures prices. Note that we are going to have strong demand for corn,
for wheat, for soybeans, and at least it would appear for cotton for
some time to come. Freedom to farm means that, that you plant for the
market. I would advise farmers to do that.
Farmers, being prudent people, say, ``That is clearly the decision we
are going to make anyway, but at the same time, we want to know what
you legislators are going to do sort of postmortem, after those
decisions. If you come back then and say, `We really didn't mean
freedom to farm. As a matter of fact, we wanted the same old status quo
legislation with all of the controls, the set-asides, the planting
decisions made in Washington,' if, in fact, that is what happens weeks,
months, years down the trail after gridlock finally is gone and
polarization is less intense, what would be the penalties for us if, in
fact, we made sound decisions for our farms and for our country, for
the general export thrust of a country that exports a great deal more
in agriculture than it imports and with a balance of payments that
grows stronger every year?''
That is the fundamental question. It is not that farmers need market
signals. They are there and abundantly clear what we ought to be doing.
They are worried about being undercut by legislators who are not
farmers, who really do not understand what is going on out there but
purport to do so in behalf of farmers, and by a President who has
apparently, through the Secretary of Agriculture, threatened to veto
almost all legislation that bears some idea of freedom to farm.
So this is why we are having this debate today to bring some
certainty to the field. We are having it in the context, as the Chair
knows, as the distinguished Senator from Mississippi has already
announced, that we are going to have a cloture vote at 1:30 p.m. Why
would we already understand we are going to have a cloture vote? It is
because the distinguished Democratic leader, in conversations with
Senators, has indicated that there is strong opposition on his side of
many Senators to this legislation, such strong opposition that it might
lead to extended debate, and, therefore, the cloture vote at 1:30 is
very important.
If cloture is established, we are going to have farm legislation,
probably today, but whenever the cloture procedure runs out. If we are
not successful, as the Chair knows, another cloture vote will be held
on freedom to farm, plus additional amendments that have been offered
by the distinguished ranking member of the Agriculture Committee,
Senator Leahy. And, hopefully, we will bring debate to a conclusion in
some orderly way on that proposition, in the event my legislation that
I have introduced and am debating this morning should not pass.
In any event, this is a very important day for agriculture and for
America. It is a privilege to lay before the Senate, I believe,
remarkable legislation that I hope will find favor with the Senate
today.
Mr. President, I yield the floor to the Senator from Mississippi,
such a valued and important member of our committee and, in his own
right, chairman of the Agriculture Subcommittee on Appropriations.
The PRESIDING OFFICER. The Chair advises the Senator he has 3
minutes, 30 seconds remaining.
Mr. LUGAR. I yield the remaining time to my distinguished colleague.
The PRESIDING OFFICER. The Senator from Mississippi.
Mr. COCHRAN. Mr. President, I thank my distinguished friend, the
chairman of the Agriculture Committee, for yielding to me. I urge the
Senate to approve this Agricultural Market Transition Act. We are
confronted with an emergency. It is essential that farmers know
immediately what the farm programs for this crop year will be. Farmers
are unable to make the decisions that must be made about what to plant
or how much to plant, with the current uncertainty of this year's farm
law.
If we fail to pass a new farm bill, wheat and feed grain farmers will
be operating under the provisions of the 1938 and 1949 agricultural
acts. There will be no rice program. This forces the Secretary of
Agriculture to announce a new rice program under the authority he has
under the 1948 Commodity Credit Corporation. And while cotton, peanut,
and sugar titles of the previous farm bill would continue for the 1996
crop-year, a great deal of confusion and possible economic hardship for
many of our Nation's farmers could result.
The Department of Agriculture has even suggested that this chaos
could add $10 to $12 billion to the cost of farm programs this year.
This is just not acceptable for either farmers or the taxpayers.
So I urge the Senate to act favorably on this cloture vote so we can
have a vote on the bill, S. 1541, to continue the commitment to
protecting public and private investments in production agriculture and
in rural America.
I am pleased that the bill includes, with the support of the
chairman, the Marketing Loan Program that has proved so workable and
helpful in the rice and cotton areas. There are also other provisions
that have been tried and tested and proven to be helpful to your effort
to compete effectively in the international marketplace with our strong
agriculture sector.
Our farmers are ready to go to work, but they need to know what the
programs are going to be so they can make rational and thoughtful
decisions. The Government's role in providing stability and an orderly
transition to a market economy in agriculture is very important and
will be carried forward and implemented in this bill. It does it fairly
and with a clear-cut commitment to curb spending.
I urge my colleagues to vote for cloture so we can get a vote on this
bill.
Mr. LUGAR. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. Inhofe). The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. BOND. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BOND. Mr. President, I understand we are technically out of time
on the farm bill, but I see no other Senators seeking the floor.
I ask unanimous consent that I be allotted the remaining time before
the recess in order to make remarks about S. 1541, the farm
legislation.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BOND. Mr. President, I believe S. 1541, the underlying
legislation, which is the subject of discussion in the cloture motions
today, presents a very important opportunity for the Senate to move
forward in a bipartisan way to shape policy in behalf of our Nation's
farmers and consumers. This modified freedom-to-farm legislation offers
reform, opportunity, flexibility and predictability in a fiscally
responsible way and with the growing support of Members on both sides
of the aisle and, I would say most important, growing support from the
people in America who are looking to the Congress to tell them what the
Federal farm policy will be.
All of us, as Senators, should understand that farmers need to know
what the Federal policy will be. For better or worse, the Federal
Government has been a very large part of decisions made by farmers in
deciding what to plant, where to plant, and how to plant. We know that
a new, long-term plan is far better than an extension of the current
law. We know that if we do not move this legislation, the alternative
is delay, confusion, frustration, continuation of current law, or
perhaps even the reinstitution of long-outdated policies still on the
books.
We also should know, based on the discussions that have gone on here,
that there is only one vehicle that has
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been under the light, has been scrutinized, has met the test, and can
bring a legislative bipartisan consensus. Simply put, I find no
constituency for continuing the status quo. We cannot leave the Federal
farm programs in the quandary in which they now find themselves.
Farmers do not want it. Fiscal conservatives do not want it. Reformers
do not want it. Urban Members who have been critical of the current
farm programs, certainly they should not want it.
This process is terribly difficult under normal circumstances, but it
is especially difficult when working under balanced budget constraints.
It is even more difficult when the comprehensive proposal which has
survived this legislative marathon represents significant change
because change produces political anxiety. There is no question that
this will be a very difficult measure, but it has been through the
process and it has reached a consensus that I believe is absolutely
essential.
I offer my thanks and congratulations, on behalf of farmers in my
State and all those of us who want to put this country on a path
towards a balanced budget, to the distinguished majority leader,
Senator Dole, to Chairman Lugar, to Senator Grassley, particularly to
Senator Leahy, the ranking member on the agriculture authorizing
committee, and the others who have worked under difficult circumstances
to find a bipartisan consensus for which the Senate now has an
opportunity to move, to a post-cloture scenario that can get a bill to
the President's desk.
I know the majority leader and Chairman Lugar and their staffs have
labored tirelessly to find a bipartisan solution and I applaud them for
taking decisive action to answer the pressing need to produce a farm
bill for the future.
I regret that some remain opposed to this legislation. I believe that
the stage was set during consideration of the budget resolution when
Congress voted cuts--not disproportionate cuts--but real cuts
nonetheless. At that time, I think some on the other side decided that
the cuts were too great and that any program that carried these cuts
would be opposed.
I want to warn anyone listening, if you find yourself confused, there
may be ample reason. You may hear from some that this legislation cuts
farming too much and that it simultaneously pays farmers too much under
the fixed market transition payments. We may also hear from some who
have historically opposed existing law that this reform legislation
should be defeated to preserve existing law.
Mr. President, I am hearing from my farmers that they want modified
freedom to farm, and they do not want an extension of current law. Let
me address this notion that we are cutting agriculture too much and
paying farmers too much. In my State, farm prices may be better than
they were last year, but to them, there is no way these prices are
high. These prices are the same as they were 13 years ago while the
cost of a pickup truck has doubled over that same period. ``High
prices'' is a relative term. If you ask a rancher feeding steers corn--
corn is high. If you ask a corn farmer, prices are not high--hardly
enough to cover the costs of production. I read a wire story where
Secretary Glickman observed from China that he was concerned that
farmers will get a tremendous windfall.
I know the Secretary is doing marvelous work promoting trade and he
should be applauded for that, but he would not want to sit down with
farmers in my State and explain to them how this slimmed down program,
combined with moderate prices is going to give them a windfall.
Additionally, prices may be higher than they were several years ago,
but after this past year's flood, drought, and frost, many farmers had
nothing or significantly less to sell. The existing program does not
address that problem and this is a critically important point. You
cannot tell my farmers who have little to sell while facing a refund of
their advanced deficiency payments that the current program is a safety
net and the modified freedom to farm is not.
I might also suggest to Members who are worried that farmers might
get a payment when prices are higher than normal that farmers can
allocate the money to prepare for the bad years--they do not need the
Government to do it for them. I believe farmers can manage a
predictable 7-year income stream to mitigate economic risk just as well
or better than Washington can do it on their behalf. They can sock it
away for the bad year, they can buy down their debt, they might buy a
new used 15-year-old tractor to improve their efficiency.
Mr. President, I urge Members to take a look at this bill and
recognize that it is an exciting new approach to the challenge of
maintaining a healthy food-producing sector, promoting important
environment practices, and doing so within the budget constraints that
we are imposing on ourselves on behalf of future farmers who want our
Nation to afford farm programs.
The first feature of this package is that it is responsible. As the
other side has testified again and again, farmers were not exempt from
the difficult choices necessary to balance a budget. Farmers have
always been supportive of a balanced Federal budget and have proven
their willingness to share in the sacrifice necessary to get there.
Farmers are highly sensitive to the cost of capital and, according to
FAPRI at the University of Missouri, stand to save over $15 billion
over the next 7 years if we achieve a balanced budget.
This package provides predictability. Farmers, bankers, and the
taxpayers know how much this program will cost over the next 7 years.
It locks in spending to protect agriculture from the next round of
budget cuts while simultaneously preventing the fluctuations that have
shocked budgets in the past.
This package dramatically reduces burdensome paperwork and the
perverse antimarket incentives that frustrate farmers who are
aggressively competing for and securing growing international markets.
Farmers would rather compete to feed Asia than protect their crop base
necessary to maximize deficiency payments.
Simplicity, flexibility, predictability, and budgetary soundness are
features--any one of which is a step forward in this debate--but
together, they mark an historic effort to make the transition to the
future.
Mr. President, I do not blame Members for being hesitant to embrace
changes to a program that has lasted my lifetime. It was only after
multiple meetings with farmers in my State that I was prepared to make
this change. In this town, if one is in doubt, she or he is expected to
stick with the status quo. But there are two things that have changed.
There is a recognition that the deficit must be addressed and farmers
are ready to free themselves from the regulations of the current
program.
There is one other observation I wish to share from my experience
traveling in Missouri. As Senators know, the number of farmers is
decreasing and the age of the average farmer is increasing. Most
talented young rural people are moving to town. Of the young people who
are endeavoring to be our next generation of farmers, there is a great
optimism despite the difficulties in agriculture. These young farmers
will tell you they want to farm for the market. They think the current
system is old, outdated, complicated, frustrating, inflexible,
bureaucratic, and costly. Our next generation of farmers tell me they
want to turn the corner as we move into the next century and I think we
owe these young farmers that opportunity.
Mr. President, this legislation has been out there since last summer
and it was included in the Balanced Budget Act passed by Congress in
November and vetoed by the President on December 6, 1996. It was
carefully crafted after months of negotiations between House and Senate
conferees. As all Members know, this was a difficult process and many
delicate regional issues were addressed.
Since the veto, I know there have been bipartisan negotiations led by
the distinguished majority leader, Chairman Lugar, and Members on the
other side. I must tell Senators, until the most recent bipartisan
negotiations with Senator Leahy, one of the more difficult press
inquiries I have fielded is, ``Who are the Republicans negotiating
with?'' I know that the distinguished minority leader introduced a bill
on marketing loans and the House has a blue dog plan. The
administration once hinted at 21 percent unpaid
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flex but I see in a report off the wire that they now support a 2-year
freedom to farm experiment and, here is the kicker, with dramatically
reduced transition payments. I raise this point because there is simply
no consensus alternative. There is, however, consensus in the
agricultural community on this legislation and I believe it is time for
us to join together to reflect that consensus.
Mr. President, we all share the goal of continuing to provide the
safest, most abundant, and the most affordable supply of food and fiber
in the world. I know there are some who may call this welfare. As farm
State Senators know, we have argued until we are blue in the face that
the current system is not welfare but people are not listening.
Farmers know it is not welfare and most Senators do not consider the
existing program welfare, but try to pass that off on an editorial
board or local chamber of commerce. You cannot argue that the reform
program will be accused of welfare when the existing system is accused
of welfare.
In my State, farmers are supportive. Over time, more and more of the
commodity groups representing farmers have weighed in. Missouri's
corngrowers were in this week to request that freedom to farm be
adopted and a continuation of current law be rejected. Farm Bureau is
asking us to move this legislation. The underlying bill represents
serious reform, it moves us in the right direction and is fiscally
responsible. This is why it has been endorsed by: the U.S. Chamber of
Commerce; Citizens Against Government Waste; representatives of the
Heritage Foundation; Citizens for a Sound Economy; National Taxpayers
Union, Americans for Tax Reform, Consumer Alert; the Cato Institute;
and the Competitive Enterprise Institute.
I understand that change is not easy and I congratulate again the
efforts of the majority leader, Chairman Lugar, and the bipartisan
negotiators who have been searching for a way to move this legislation
forward and get farmers a program that moves them into the next
century. I think the President will see that farmers and citizens will
be best served if he adopts this legislation and I am hopeful that
Congress can continue to work on sensible regulatory reform, capital
gains and estate tax relief and other measures that will help our
farmers compete in the next century. I urge adoption of the bipartisan
compromise.
I urge my colleagues to invoke cloture. The farmers of America
deserve better than to be filibustered into uncertainty for the rest of
the spring. We need to move forward on this bill.
____________________