[Congressional Record Volume 144, Number 53 (Monday, May 4, 1998)]
[Senate]
[Pages S4145-S4147]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  AGRICULTURE DISASTER IN NORTH DAKOTA

  Mr. CONRAD. I have come to the floor this morning to talk about a 
disaster that is happening in my home State, but it is receiving very 
little attention. People who are watching and my colleagues might 
recall that last year we had a set of disasters in North Dakota that 
had tremendous national publicity and national attention.
  We had the worst winter in our history, followed by the most powerful 
winter storm in 50 years, followed by the worst flood in 500 years; and 
in the midst of that, fire broke out that destroyed much of downtown 
Grand Forks, ND. It was really almost apocalyptic. But this year we 
have another disaster occurring, and it is receiving very little 
attention. I call it the ``stealth disaster,'' because it is really 
flying below the radar screen. There are almost no national stories, no 
national attention. In fact, I believe very few people know this 
disaster is occurring. But it is occurring and it is an extraordinary 
disaster that is hurting the farmers of my State.
  We are in a wet cycle. This wet cycle has bred disease, disease that 
cost us about a third of our crop last year. That, coupled with very 
low prices, has meant that our farmers are not cash-flowing.
  I was just home during a series of farm meetings and in each and 
every stop was told we will lose perhaps 3,000 farmers this year in 
North Dakota. We only have 30,000. So losing 3,000 in 1 year would 
really be quite extraordinary.
  But these farmers are facing a cash-flow crunch as a result of bad 
policy, as a result of low prices, as a result of this incredible 
disease that has broken out. And again, this is a disaster of really 
staggering proportions in that it gets very little attention, and there 
is very little the Federal Government is prepared to do.
  It is very interesting, if you have a disaster like this. Last year 
when this disaster occurred, or these sets of disasters occurred in 
North Dakota, and we searched to find if there was Federal help, we 
found that indeed there was. The SBA rushed to help. The Federal 
Emergency Management Agency was there. The Housing and Urban 
Development Program was there with CDBG funds. There was a marvelous, 
marvelous response that has helped the devastated communities recover.
  But now we have a different kind of crisis and a different kind of 
disaster. And when we look for assistance, we find there is virtually 
none. What you will find is, about the only thing that is available is 
low-interest loans.

  Now, additional debt for those who can't cash flow because of a 
terrible outbreak of disease and because of low prices and because of 
weak farm policy, saying ``Take on more debt,'' doesn't sound like a 
very good deal. But that is exactly what we are faced with, because we 
no longer have a disaster program for farmers; it doesn't exist. The 
only thing we have is low-interest loans; that is it. When farmers 
experience a disaster, the Federal response is to help them go further 
into debt. It doesn't make much sense.

[[Page S4146]]

  We have a circumstance that is, as I described, dramatic. I brought 
this chart to show what has happened to North Dakota farm income. I say 
it was washed away in 1997. In 1996, this chart shows the farm income 
of our State, $764 million; but in 1997, farm income in our State was 
reduced to $15 million. That is divided among 30,000 farmers. That 
means the average net income per farm in North Dakota in 1997 was only 
$500. That is a reduction in income of 98 percent from 1996 to 1997. 
That is a disaster.
  Let me go to the next chart that shows farm income from 1996 to 1997, 
quarter by quarter, so that my colleagues can see the pattern. In 1996, 
you could see it was about equivalent from quarter to quarter, but, 
boy, we came to the end of the year, 1996, and look what happened to 
farm income. It fell off the table. I guess in this case we can say it 
fell off the chart. That is a 98 percent reduction, a farm income of 
only $15 million in the entire State for the entire year, divided among 
30,000 farmers. As I say, that is only $500 apiece.
  It is no wonder everywhere I go farmers are saying to me, ``We have a 
disaster.'' It is not just farmers. In community after community, the 
bankers are taking me aside and saying, ``Senator, there is something 
radically wrong with farm policy.'' There is something radically wrong 
with our disaster programs when farmers can go through these 5 bad 
years of this incredible wet cycle, and disease develops, and low 
prices come on to the market, and there is nothing to help these 
producers. They are going to be washed away every bit as much as the 
residents of Grand Forks were washed away by the flood waters last 
year.
  Some will say North Dakota is a marginal area; when you have bad 
weather, you will get hurt. I brought this chart to show the Red River 
Valley. The Red River Valley has the richest farmland in the world. The 
Red River Valley used to be the bottom of a great lake, Lake Agassiz. 
Thousands of years ago, when the lake was there, it built up 
extraordinarily rich soil. When you come to the Red River Valley of 
North Dakota, you see the richest farmland anywhere in the world. In 
places it is 8 feet thick, an incredible lode that is so rich.
  When I was growing up, we were told there had never been a farm 
failure; there had never been a crop failure in the Red River Valley, 
ever. These last 5 years have seen extraordinary developments, because 
even in the Red River Valley, the richest farmland in the world, farm 
income is down precipitously. You can see from 1996 to 1997 farm 
income, the richest farming area in the world, down 62 percent.
  Now the next chart, North Dakota is a place that produces wheat. 
Indeed we do. We are typically the No. 1 or No. 2 wheat-producing 
State. Look what happened to the total value of the spring wheat crop. 
This shows from 1993 to 1997, the crop was about $1 billion in value; 
in 1993, it declined somewhat; in 1994, came up handsomely; in 1996, it 
was approaching $1.3 billion. Look what happened last year--a 41 
percent decline.

  It wasn't just the wheat crop. The No. 2 crop in North Dakota is 
barley. Of course, those who are listening probably know that barley is 
used to feed animals. It is also used to brew beer. The barley crop, 
same pattern: You saw a pretty good increase from 1993 to 1996, and 
then a steep decline in 1997.
  Some have said this is just a blip, this is just a blip in terms of 
prices. Yes, you have the disease problem. Hopefully, that will pass at 
some point. But it is disastrous when you lose a third to 40 percent of 
the crop in one year because of disease and then, on top of that, you 
have very low prices. That leaves farmers in an incredibly vulnerable 
position. Some have said, on the price front that is just a blip.
  I thought I would bring along this chart that shows prices from 1996 
through 1997, month by month, because if you look at that chart, it 
doesn't look like a blip. In fact, the only blip that occurs is right 
here, a period of high prices when we were debating the farm bill. At 
that point, people were told, ``We have reached an era of permanently 
high farm prices because of export demand; farmers can count on a 
period going forward of high prices.'' You can see how long that 
lasted. That lasted about 90 days. Instead, prices started coming down. 
Both wheat and barley--you can see the wheat prices in blue, the barley 
prices in red, on the chart, and both of them, from the time we debated 
the farm bill, have gone down, down, down.
  This represents a disaster to the thousands of producers in North 
Dakota who rely on agricultural income to sustain themselves. We have a 
disaster occurring, and there needs to be a response. I don't think we 
want to see washed away 10 percent of the farmers in 1 year--and that 
is this year. I can tell you, Mr. President, next year is going to be 
far worse unless conditions change, unless prices firm up, unless there 
is a Federal response, unless the disease problem changes. And, 
unfortunately, once you get into a wet cycle, these diseases continue 
as long as the wet cycle does. The result is devastating, absolutely 
devastating. I fear that we will face a true calamity next year unless 
there is a Federal response.
  In closing, Mr. President, a troubled agricultural economy is 
dangerous for rural communities and for our entire Nation. The 
importance of a strong agricultural economy and the maintenance of a 
rural infrastructure was perhaps best summed up by William Jennings 
Bryan when he said, ``Burn down your cities and leave our farms, and 
your cities will spring up again as if by magic, but destroy our farms 
and the grass will grow in the streets of every city in the country.''
  William Jennings Bryan was right. Agriculture is right at the core of 
the strength of the American economy. North Dakota is in the first 
trench. We are the first ones to experience the defects of a national 
policy that was put in place in 1996. But I alert my colleagues that 
unless we take action, others will follow. When they have a disease 
problem, when they face low prices, they will see enormous economic 
pressure on farm producers, and they, too, will be in a position to 
lose a significant chunk of their farm families.
  That is a tragedy for our State. I believe it is a tragedy for our 
Nation. I hope very much my colleagues are listening and will 
understand, just as we responded to a more visible disaster last year, 
we must fashion a Federal response to this stealth disaster that is 
occurring this year.
  I alert my colleagues that I will be coming to the floor on a regular 
basis to bring this matter to their attention in the hopes that we can 
fashion a stronger national policy. So while North Dakota is suffering 
this year, we might prevent other States from experiencing what we are 
facing in 1998.
  I thank the Chair and yield the floor.
  Mr. MOYNIHAN. Mr. President, I rise simply to congratulate the 
Senator from North Dakota on a clear and persuasive presentation of 
what is not just a North Dakota problem, but a national problem. The 
United States is blessed beyond the imaginings of William Jennings 
Bryan by the degree to which a very small farm population provides the 
most ample diet the world has ever known for a global nation.
  I might say--and it won't come as a surprise to my friend from North 
Dakota, but not everybody would know--that New York State is a wheat-
growing region. In 62 counties, I think we have commercial wheat grown 
in 50. There are parts of the western areas of the State where if you 
travel along the Erie Canal, at the level where it is raised above the 
surrounding land looking north and south, you could be in North Dakota 
looking at the wheat fields. Those prices affect ours, too. The Senator 
is right to think that the '96 legislation should be revisited in terms 
of the economic realities facing those farmers, upon whom we all 
depend, because we eat that bread and drink that beer.
  I thank the Chair.
  Mr. CONRAD. Mr. President, I thank my colleague from New York. I am 
honored to serve with him on the Senate Finance Committee. My wife and 
I were just telling a colleague the other night that sometimes we have 
a chance to have dinner with the Senator from New York, and we always 
feel that it is a privilege because it is like a seminar. There are 
very few people that have the knowledge bank of the senior Senator from 
New York. It is an honor to be able to serve with him on the Finance 
Committee. He has reminded me on more than one occasion that New York 
is a major agricultural, producing State as well.

[[Page S4147]]

  I just say to my colleague that our experience with the changes that 
were made, in terms of eliminating a disaster program for agriculture, 
is a very bitter pill because now we are experiencing the disaster. The 
only assistance is low-interest loans. When you have persons that 
aren't cash flowing, to say that the only help we can extend to you is 
for you to go deeper into debt, that doesn't seem like much in the way 
of a helping hand. And it is so totally opposite to what we experienced 
last year with those extraordinary natural disasters that I think it is 
important to bring it to the attention of my colleagues. This year we 
are about to lose--in North Dakota alone--10 percent of the farmers. In 
one year. And next year will be far worse, unless we take action.
  I thank my colleague from New York.
  Mr. MOYNIHAN. Mr. President, I will add a historical note here 
because it suggests the global reach of what might seem to be local 
problems. I think it is widely agreed that it was the arrival of wheat 
from western New York in Liverpool through the Erie Canal that led to 
the repeal of what the British called the ``corn laws''--the British 
use the term ``corn''; we use the term ``wheat''--which kept the 
tariffs on wheat so that the vast landlords could remain the vast 
landlords. American wheat was so much less expensive that the British 
decided to cease all that and become an industrial nation. And then two 
generations later, it was the arrival in the Baltic of wheat from North 
Dakota, South Dakota, and Kansas. The prices were such that the local, 
aristocratical, landed gentry of Prussia simply could not compete. The 
next thing you know, you have enormous emigration from that part of the 
world to the United States through Ellis Island. These are not small 
events.
  The price of food is a very important matter. It is a tribute to 
American farmers that we don't think much about it any longer because 
it has become relatively stable. I can speak to the fact that when we 
began the War on Poverty, under President Johnson, we used as a measure 
the ``city workers food basket'', which was designed by the Department 
of Agriculture and measured what is necessary to raise a family of 4 in 
the city. We said a family needed 3 times that number. Well, this 
quickly became hopelessly out of date because the price of food kept 
going down. Now the price will go up. If those prices crash now, prices 
will rise later. The Senator is on to something important, and I thank 
him, as one Member of this body.

  Mr. CONRAD. I thank the Senator from New York. Mr. President, I might 
conclude by saying that I was looking at the chart here. While North 
Dakota suffered a 98 percent reduction in farm income from 1996 to 
1997, New York suffered a 44 percent reduction in farm income from 1996 
to 1997, one of the worst hit in the country. So North Dakota, 
unfortunately, leads the pack. We are at the top of the chart in terms 
of States losing farm income. Unfortunately, the State of New York is 
also in that top tier. In fact, they ranked fourth in terms of 
reduction and tied for third, actually, with 44 percent reduction in 
farm income. So I am certain the producers in your State are suffering 
as well. We have had the double whammy--not only of low prices, but low 
prices coupled with this unprecedented outbreak of disease. That is 
creating a crisis and we simply must respond. I thank the Chair and 
yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Enzi). The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. ROTH. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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