[Congressional Record Volume 143, Number 149 (Thursday, October 30, 1997)]
[Senate]
[Pages S11490-S11491]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


       AGRICULTURAL RESEARCH, EXTENSION, AND EDUCATION REFORM ACT

 Mr. CONRAD. Mr. President, I am pleased to support the 
Agricultural Research, Extension, and Education Reform Act, the 1996 
farm bill's research title. This bill will bring many benefits to the 
Nation's farmers and to producers in North Dakota. This bill is 
important not only to our farmers but to North Dakota State University, 
our five Tribal Colleges and all facets of agricultural production that 
are the State's lifeblood.
  In addition to establishing agricultural research priorities, the 
bill makes positive changes in the operation of the Nation's 
agricultural research system, which I am pleased to support. 
Specifically, this bill will increase the accountability of USDA funded 
research by increasing stakeholder input. Just this year, the North 
Dakota State Legislature created one of the first stakeholder groups in 
the country and gave it unprecedented power to direct the agricultural 
research at North Dakota State University. This 13-member group met for 
the first time in July to set priorities for agricultural research in 
North Dakota. We look forward to being able to serve as a model to 
other States planning to increase stakeholder input.
  I am very pleased the Agriculture Committee and now the U.S. Senate 
have strongly supported funding for agricultural research. Our Nation's 
economic base was founded on agriculture and as we drift toward an 
increasingly urban population, we drift from our agrarian roots but we 
must not ignore the importance of agricultural productivity. North 
Dakota farmers and livestock producers continually look to increase 
farm efficiency, profitability, and environmental stewardship by using 
new technologies. It is critical that federally funded research focus 
on these goals while producers maintain global competitiveness.
  The bill's Initiative for Future Agriculture and Food Systems 
provides new funding of $100 million in fiscal year 1998 and $170 
million for each of fiscal years 1999 through 2002 to competitively 
award research, extension, and education grants on issues related to 
food genome mapping, food safety and technology, human nutrition, new 
and alternative uses, production of agricultural commodities, 
biotechnology, and natural resource management.
  These are the directions that agricultural research must go in order 
for the United States to maintain its edge in the global market while 
providing greater harmony between agriculture and the environment.
  Mr. President, I am very pleased this bill incorporates my proposal 
to give policy research centers the authority to study the effect trade 
agreements have on farm and agricultural sectors, the environment, 
rural families, households and economies. Of special concern are the 
impacts of Canadian grain imports and international policies on the 
Northern Great Plains. Specifically, I would like them to examine the 
impact of multinational trade policy issues and North American cross-
border policies on Northern Plains agriculture, identify strategies to 
improve export opportunities for this region of the country, and 
evaluate the impacts of national and international policies on the 
region's agricultural competitiveness, farm income, farm structure, and 
rural economies. Policy researchers at North Dakota State University 
requested this amendment to help obtain funding for the proposed 
Northern Great Plains Policy Research Center which would serve as part 
of the Food and Agricultural Policy Research institute consortium. I 
fully support their proposal.
  And finally, Mr. President, I am very pleased that the bill includes 
provisions to authorize the Secretary of Agriculture to grant up to 
$5.2 million in each of years 1998 through 2002 to a consortium of 
land-grant universities combating diseases of wheat and barley caused 
by Fusarium graminearum and related fungi, commonly known as scab. Scab 
has had a profound effect on the farmers and economy of North Dakota 
and this year alone it is expected to cause $1.1 billion in economic 
damages. I cannot stress enough the importance of research to combat 
this horrible crop disease and thank my colleague from Minnesota, 
Senator Wellstone, for working closely with me on this issue and my 
colleague from Indiana, Senator Lugar, for including these provisions 
in the manager's package.
  Mr. President, so that everyone may fully understand the consequences 
of this crop disease, I would like to submit an economic analysis of 
scab's impact on my home State of North Dakota. I would also like to 
submit for the Record a recent newspaper article from the Grand Forks 
Herald, headlined, ``An agricultural nightmare,'' which describes 
scab's impacts and discusses the need for research to combat the 
disease. Mr. President, I ask that both submissions be printed in the 
Record in full.
  The material follows:

  The Market Adviser: Scab Losses Severe--George Flaskerud, Extension 
                 Crops Economist NDSU Extension Service

       Scab in spring wheat, durum and barley will have a severe 
     impact on the economy of North Dakota this year. Estimates by 
     the department of agricultural economics at North Dakota 
     State University put the direct loss to producers at about 
     $355 million. The total loss is expected to be about $1.1 
     billion when the indirect impact on the communities is 
     included. This brings total scab losses since 1993 to about 
     $2.9 billion. Demcey Johnson and I, with the help of others 
     in the department, calculated the losses.
       These losses have severely damaged many farm financial 
     statements. The median debt/asset ratio for North Dakota 
     farmers increased from 48 percent in 1992 to 56 percent in 
     1996 and is expected to further increase this year. In 
     addition, North Dakota had a net loss of about 2,000 farms 
     between 1992 and 1996, in many cases due to scab. The debt/
     asset ratios were derived from the records of farmers in the 
     North Dakota Farm Business Management Education Program.
       The total direct loss in 1997 was the greatest of the scab 
     losses since 1993. Yield losses were greater during 1993 and 
     1995 than during 1997, but, when the price effect was 
     considered, the total direct loss during 1997 was record-
     setting. The price effect during 1997, to date, has been 
     negative, on average, which accentuates the 1997 yield loss. 
     The price effect has been negative because actual net selling 
     prices have been below what they would have been during a 
     normal year, on average. Many times over the past five years, 
     a positive price effect offset some or all of the loss due to 
     lower yield.
       Spring wheat scab losses have generally increased over time 
     when both the yield and price effects are considered. Total 
     direct spring wheat scab losses since 1993 were worse every 
     year except one, the exception being 1996. Barley losses were 
     substantial in three of the five years: the largest was in 
     1993 followed by 1997 and 1995. For durum, the yield effect 
     exceeded the price effect in two of the five years, 1995 and 
     1996.
       Yield losses were calculated as the difference between 
     trend yields and actual yields. Trend yields were derived 
     from 1970-92 data, leaving out two drought years. The trends 
     were extended to 1997 to derive losses during 1993-97. The 
     yield losses were calculated for Crop Reporting Districts 2, 
     3, 5, 6, and 9, essentially the eastern portion of North 
     Dakota that has suffered from scab.
       Price impacts were calculated as the difference between 
     normal prices and actual net selling prices. For spring 
     wheat, normal prices for 1993-97 were derived from the 1989-
     92 price relationship between actual net selling prices and 
     Minneapolis futures prices. For durum, normal prices for 
     1993-97 were derived by multiplying the 1993-97 spring wheat 
     normal prices by a factor of 1.09, which is the long-term 
     price relationship between durum and spring wheat prices. For 
     barley, normal prices for 1993-97 were derived from the 1989-
     92 price relationship between actual net selling prices and 
     Duluth feed barley prices. These methods permitted both the 
     yield and quality effects to be reflected in the price 
     impacts.
       This analysis did not address such factors as insurance 
     indemnity payments and disaster payments. Both were 
     substantial in 1993. Based on my observation of yields in 
     1997, however, I would expect that insurance indemnity 
     payments will be relatively low this year. Many yields appear 
     to be about at the level where insurance indemnity payments 
     would just start to be realized.
                                  ____


             [From the Grand Forks Herald, Sept. 12, 1997]

 An Agricultural Nightmare--Infestations of Scab Provide Area Farmers 
                 Lots of Pains In and Out of the Fields

                           (By Erin Campbell)

       Termed the Armageddon for wheat and barley and compared 
     with cancer, scab remains an uninvited guest and pillager of 
     small grains fields in the region for the last five years.
       ``It's not a new disease to the area,'' says Jochum 
     Wiersma, small grains specialist with University of 
     Minnesota, Crookston. In fact, it's popped up a few times in 
     the region since the turn of the century.
       Scab can infest any wheat-growing area if it has the right 
     moisture conditions to develop, he says.
       ``We certainly are due for a break,'' says Don Loeslie, a 
     Warren, Minn., farmer.
       Wetter-than-normal weather conditions provide tailor-made 
     conditions for scab to thrive and impact the rural economy.

[[Page S11491]]

       ``When we got rain in July, it used to add to bushels, now 
     it takes away,'' says Neal Fisher, deputy administrator for 
     the North Dakota Wheat Commission.
       For some producers, scab has robbed them of profits for 
     five years.
       ``It was the sure crop to plant. We could always pencil in 
     a profit,'' Loeslie says. When farmers deliver grain to their 
     local grain elevator, its quality is evaluated, and the grain 
     is ``graded.'' Grades vary from elevator to elevator. At the 
     MayPort (Mayville and Portland, N.D.) Farmers Co-op elevator 
     grades include milling, No. 1, No. 2, No. 3, No. 4 and 
     terminal or feed wheat.
       The price impact of a difference between grades usually 
     amounts to 5 to 10 cents. Feed wheat usually brings 70 cents 
     less than the top market price.
       Farmers also receive discounts for low test weight and 
     damage, or they may collect premiums for high protein 
     content.
       This year, discounts for damaged wheat aren't as severe as 
     previous years because the shriveled, scabby grain kernels 
     didn't make it into producers' combine hoppers, says Dan 
     Pinske, general manager for MayPort Farmers Co-op elevator.
       Instead of discounts, farmers harvested less grain.
       ``It (scab) was so severe it (scab-damaged grain)-- didn't 
     make it into the combine, so they lost a lot of bushels,'' he 
     says.


                            economic impact

       Those lost bushels affect producer's profits and the entire 
     region's economy.
       Elevators profiting on volume have been hit in the 
     pocketbook as scab reduces the region's wheat yields.
       ``If we start knocking off 30 to 40 percent of the 
     potential (crop), it's a huge income loss,'' Pinske said.
       A study recently done by Demcey Johnson and George 
     Flaskerud, both of North Dakota State University's 
     Agricultural Economics Department, shows scab caused a total 
     economic impact of $2,875 billion from 1993 to 1997. That's a 
     combination of a $934 million direct impact and an indirect 
     impact of $1.941 billion.
       Producers in Minnesota saw a 33 percent loss due to scab in 
     1993. This year, the loss is expected between 12 percent and 
     18 percent in the northwest valley area of Minnesota, says 
     Roger Jones, Extension plant pathologist at the University of 
     Minnesota.
       That loss is comparative to the direct impact of losing one 
     year's entire wheat crop, Fisher says.
       The total economic impact of spring wheat production on the 
     region would be about $3.96 billion, using last year's 
     production of 313.5 million bushels multiplied by an average 
     seasonal price of $4.10, a plus a ``multiplier'' effect. 
     Durum, at 79.4 million bushels times the seasonal average 
     price last year of $4.40, plus the multiplier effect, equals 
     roughly $1.08 billion. All barley, at 143 million bushels, 
     times an average seasonal price (average of feed and malting) 
     of $2.45, plus the multiplier effect, also is equivalent to 
     about $1.08 billion.
       The scab epidemic has made research efforts a main focus to 
     get the wheat industry back in the black.
       But, that takes money.
       Scab has become a more prominent issue since 1993 and was 
     the reason for a visit by the newly appointed U.S. Department 
     of Agriculture undersecretary for research, economics and 
     education, Miley Gonzalez.
       The North Dakota Wheat Commission and other state grain 
     commissions and councils also are making research a priority 
     when preparing budgets.
       The North Dakota Wheat Commission has about $2.4 million to 
     spend this year. If estimates are correct, and the wheat 
     harvest is 100 million bushels lower, the commission will 
     have $800,000 less than last year. The commission's budget 
     comes from an 8/10 of a cent per bushel checkoff.
       But, commissions and councils can't shoulder the entire 
     research effort, either.
       Attempts at gaining more federal dollars for research are 
     slowly gaining strength in Washington. About $1.2 million in 
     federal funding is planned for 1998.


                             Stopping scab

       Instead of battling the problem individually, states also 
     are teaming up to stop scab.
       Minnesota, North Dakota, South Dakota and Canada joined 
     forces in 1993 after the Minnesota Association of Wheat 
     Growers organized a scab symposium.
       A 12-state scab initiative, which includes the Dakotas and 
     Minnesota, also was initiated a few years ago.
       ``The fact that it affects other wheat is, in a way, a 
     blessing in disguise because it becomes a national problem,'' 
     Wiersma said.
       One of the key research tasks is finding varieties that 
     resist scab.
       ``Variety shifts have cut the disease levels in half.'' 
     Jones said.
       Most of the varieties used by producers existed before the 
     epidemic hit, and some new varieties have proven to be less 
     susceptible. Barley has not made variety changes to date, but 
     varieties on the horizon look promising.
       For a variety to be successful, resistance would need to be 
     twice the current resistance level, Jones says.
       ``I have a lot of confidence in our scientists, but it's 
     not going to be overnight,'' Fisher said.
       In order to solve the scab problem, the industry needs to 
     focus on more than resistant varieties.
       Although controversial, different residue practices, such 
     as plowing, may help destroy scab inoculum.
       The only way to prove it is by plowing the whole valley, 
     which is unlikely, Wiersma says.
       ``Producers need to look at their residue programs. Simply 
     relying on genetic resistance, we are going to have a 
     difficult time resolving this problem,'' Jones said.
       Change in rotation practices and alternative crops also are 
     options, but they alone cannot solve the problem, either.
       ``Rotation has an impact, but it's marginal,'' Wiersma 
     says.


                              Other crops

       Alternative crops, such as oilseeds and beans, face market 
     uncertainty because of overproduction. Many producers have 
     decreased wheat acres as much as possible and are trying 
     other crops.
       ``Producers are looking for every alternative they can, and 
     that's understandable considering the circumstances. 
     (However) those markets are easily saturated,'' Fisher said.
       Many producers also are considering planting winter wheat, 
     but it also can be attacked by scab if excessive moisture 
     comes at the wrong time, Jones says.
       And there simply is not a large enough variety of crops to 
     choose from in the northern valley.
       ``There aren't enough specialty crops to tide us over. We 
     don't have the luxury of the southern areas,'' Loeslie says.
       Besides, producers who use wheat as a rotation for other 
     crops, such as sugar beets, can't change their rotation plan.
       Sugar beets are planted on a field once every three years, 
     with four years being optimal, said Mark Weber, executive 
     director of the Red River Valley Sugarbeet Growers.
       Like the flood that hit Grand Forks this spring, this river 
     of scab will never be forgotten, Loeslie says.
       ``It's not a healthy situation for the region.''
       But the producers in this area will not go down without a 
     fight. Loeslie is confident the dedication and work of a team 
     effort will prove to be successful in the long-term.
       ``I hate to give up. Wheat has been too good to us for too 
     long.''

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