[Congressional Record Volume 144, Number 55 (Wednesday, May 6, 1998)]
[Senate]
[Pages S4409-S4412]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    THE FARM CRISIS IN NORTH DAKOTA

  Mr. CONRAD. Mr. President, I rose 2 days ago to alert my colleagues 
to the economic disaster that is befalling North Dakota with a dramatic 
drop in farm income. And I showed this chart; the headline: ``North 
Dakota Farm Incomes Washed Away In 1997,'' that showed from 1996 to 
1997 farm income dropped 98 percent in North Dakota.
  In fact, in 1997, the total farm income in the entire State of North 
Dakota, one of the most agricultural States in the Nation, was down to 
only $15 million--$15 million--of farm income spread among 30,000 
farmers. That was a farm income per farm of only $500.
  Mr. President, the Wall Street Journal yesterday had a front page 
article entitled ``Off the Land,'' and they confirmed the basic 
outlines of the story that I ve been telling for the last 2 days on the 
Senate floor. And in their front page story, they pointed out, ``On the 
Northern Plains, Free-Market Farming Yields Pain, Upheaval. After 
Deregulation, Drop In Wheat Prices Compels Many Growers to Quit. The 
Effect Spreads South.''
  Mr. President, the article in the Wall Street Journal goes on to 
report that:

       Cheap wheat and bad weather are doing to Nathan Johnson 
     what they couldn't do to three preceding generations of his 
     farming family.
       They are defeating him.

  Mr. President, this is a story from northwestern Minnesota, but it is 
identical to what is happening right across the border in northern 
North Dakota.
  This story goes on to say:

       Last year, a disease called scab wiped out half the wheat 
     [that Mr. Johnson] planted on the land around his family's 
     1887 homestead near the Canadian border. And now, a glut of 
     foreign wheat is pushing down the grain's price at the local 
     elevator to an unprofitable $3 a bushel. These days, Mr. 
     Johnson is trying to rent out his land and looking for work 
     in the city.

  Mr. President, the article goes on to say:

       Across the Northern Plains, the long migration away from 
     agriculture is turning into a stampede. From Montana to 
     Minnesota, thousands who made their living growing wheat are 
     quitting the prairie. A blizzard of barnyard auctions is 
     sending chills down the Main Streets of the towns that live 
     off farmers.

  One man is quoted as saying:

       ``We're doing a sale every day,'' says Brad Olstad of 
     Steffes Auctioneers Inc. in Fargo, N.D. ``Wheat is a dying 
     crop.''

  And wheat, of course, is the commodity that goes to make bread, to 
make pasta; and they are talking here about it being a dying commodity.

       Bad years are nothing new around here. Wheat prices were 
     lower in 1990, when a similar coincidence of bumper harvests 
     around the globe swamped the market. The drought of 1988 
     destroyed wheat fields. But none of that was as deadly to 
     farmers as what is happening now: deregulation.
       Two years ago, Uncle Sam began withholding from the 
     decades-old business of protecting farmers against the 
     vagaries of weather and markets. Grain and cotton farmers no 
     longer receive ``deficiency'' payments when prices are below 
     target levels. Shelved, too, was the disaster-aid program 
     that pumped $18 million into Kennedy--

  This is a small town in Minnesota that is being reported on in the 
Journal article--

     and the rest of Kittson County after the 1988 drought.

                           *   *   *   *   *

       The bottom line: Many of Kittson County's farmers are 
     suffering their biggest financial losses ever. ``Deregulation 
     is turning into a disaster for us,'' says Duane A. Lyberg, 
     president of the Northwestern State Bank.

  Now, that tells you something about the depths of this disaster. It 
is not just farmers reporting on it, not just, as I reported yesterday, 
implement dealers or other suppliers to farmers; but now the bankers 
are reporting to us what a financial disaster they are facing.

[[Page S4410]]

  In fact, I just completed 2 weeks of meetings across the State of 
North Dakota. And in every small town where I went, the bankers took me 
aside and said, ``Senator, there is something radically wrong in 
agriculture. Our farmers are not cash flowing. And they're not going to 
cash flow.''
  In North Dakota, the Journal article reports:

       So many are throwing in the towel that state officials got 
     a federal grant last month to retrain hundreds of growers for 
     other jobs. ``I've never seen it as bad as this,'' says Roger 
     Johnson, North Dakota Commissioner of Agriculture.

  They go on in this article to quote the former Secretary of 
Agriculture of the United States, and he says the following:

       Unless the bankers get worried, nothing will get changed in 
     Congress, says Bob Bergland, Agriculture Secretary during the 
     Carter administration, who lives in nearby Roseau, where his 
     family grows wheat. ``The hourglass is running out for a lot 
     of farmers around here.''

  That is the truth. We are in desperate trouble in the northern 
plains.
  Let me just conclude with a final paragraph from the Wall Street 
Journal article.

       Jim Tunhelm, the state legislator here, sits at his dining-
     room table, pointing all around him, in the direction of 
     farmers he knows who are quitting. ``Arnold, Lamar, Troy,'' 
     he says. He stops at eight. ``They should have called it 
     `Freedom to go broke.' [As he referred to the so-called 
     Freedom to Farm bill we passed here in Congress in 1996.] 
     We're going to disappear at this rate,'' [he concludes.]

  That is the hard reality of what is happening in my home State. A 98-
percent reduction in farm income in 1 year. Thousands of farmers 
leaving the land.
  I started this series of reports 3 days ago. I pointed out that North 
Dakota had experienced this enormous drop in farm income. Yesterday, I 
reported on what others are saying who are close to the farm economy. 
Today, I am able to report the Wall Street Journal is confirming, in 
this front page story, precisely what I have been saying.
  The fact is, we have a stealth disaster in North Dakota. It is 
brought on by low prices, by disease, and by weak Federal policy, a 
farm bill that does not sustain farmers in the bad times, or at least 
allow them to continue, and the lack of disaster program. The only 
disaster program we have now is low-interest loans.
  So the Federal Government is saying to those farmers, those family 
farmers who dot the countryside, ``If you are in trouble, go deeper 
into debt.'' That can't be the answer. We must do better.
  I urge my colleagues to pay attention because this isn't just a 
matter for North Dakota. Yes, we are in the first trench, but it is 
just a matter of time before others experience what we are experiencing 
now.
  I thank the chair.
  Mr. BAUCUS. I very much thank the Senator from North Dakota for 
drawing the Senate's attention to the Wall Street Journal article, and, 
more importantly, to the plight of our farmers in the northern Great 
Plains.
  The article mentioned Montana and Minnesota. The Senator is 
absolutely correct. I have never seen it this bad. Just last weekend 
when I was home a banker pulled me aside and said virtually what you 
said, Senator; namely, it is getting so bad the bankers are getting 
worried about their loans and whether they will be repaid. It is true, 
the farmers can't cash flow. It is grim.
  I urge farm organizations to dig down deep, put their heads together 
and come up with a solution that we, the Congress, can help with.
  We passed Freedom to Farm. Most farmers in my State supported it at 
the time because the wheat price was high and the initial payments were 
high. We all knew the day would come when we would be paying the price 
for adopting that bill but it has come a lot earlier. It has come this 
year rather than a couple, 3 years from now and with much more 
strength. It is hurricane force and will drive more farmers off the 
land. Small towns in eastern Montana are drying up. People are leaving. 
You see shops on the main street boarded up. It is because the price of 
wheat, barley, and durum is so low and has been so low at a time when 
our Government has not done what it should be doing.

  This is true of all administrations--to open up foreign markets, get 
those countries to reduce their barriers so we can sell more overseas. 
I am thinking particularly of China. China does not take Pacific 
Northwest wheat. It has not for years because of a bogus claim. That is 
one of the many examples of countries erecting trade barriers that make 
it difficult for us to sell a product.
  I very much thank the Senator for raising this issue. I urge Senators 
to listen to the Senator's statement because we are going to be facing 
this issue here in the Senate fairly soon. I hope this is constructive 
in addressing the problems that the Senator mentions. It is happening 
in spades, today, in Montana, particularly eastern Montana.
  I thank the Senator and I yield the floor.
  The PRESIDING OFFICER (Ms. Collins). Under the previous order, the 
Senator from North Dakota, Senator Dorgan, is recognized.
  Mr. DORGAN. Madam President, Senator Conrad has raised the farm issue 
the last several days on the floor of the Senate, and I appreciate the 
comments he has made, as well as the comments of the Senator from 
Montana.
  This is not just about dollars and cents. And it is not just a lesson 
in economics. My great-grandmother homesteaded in North Dakota when her 
husband died. She took six kids and homesteaded on the prairie, pitched 
a tent, homesteaded 160 acres, and began to run a farm. It was a hard, 
tough life, I am sure. Farming is not easy. They live out in the 
country. They have a yard light burning at night. Farmers get up in the 
morning to do chores, and they work all day. If they have enough money 
to put in a spring crop and plant some seeds, they wonder whether the 
grasshoppers will come, whether crop disease will come, whether it will 
hail and wipe out their crop. Maybe none of that will happen and they 
will raise a crop and that crop will come out of the ground. Then they 
will combine it in the fall and they wonder, will there be a price so 
they can sell the crop at something more than it cost to produce.
  The answer, sadly, except for one year in the past 20 years has been 
no. There is no price for your crop above the full economic costs of 
production. You do what you love to do and you lose money.
  The article in the Wall Street Journal referenced today by Senator 
Conrad talks about these farmers who decide they can't do this anymore. 
They just quit. They have to quit.
  I had a banker call me about two hours ago and he said, ``You know we 
only call when there are real problems, and you know I have one of the 
most conservative banks in the state.'' He said, ``The fact is I am now 
turning away good farmers. Year after year after year I have given them 
operating loans to go into the field in the spring. I can't do it this 
year because they can't cash flow. And they will have to quit 
farming.'' He said, ``That is what is happening out here in rural 
America.''
  One might ask, why does it matter? And some people in this Chamber 
think it doesn't matter who farms. Why does it matter that we have a 
family farmer out on the land? Well, you can have corporate 
agrifactories gassing up their big tractors and farming coast to coast 
and you won't have anybody living out in rural America.
  Is there a difference between having a network of family farms, and 
farm families that dot the landscape of this country, versus having 
corporate agrifactories that gather up land by the sections and the 
townships and the counties and then farm as far as the eye can see 
forever? Is there a difference? It seems to me there is a huge 
difference for this country.
  For social and economic reasons, this country ought to care about 
having a network of families out on the farms in this country being 
able, year after year, to produce food for this country. If we continue 
to go in the direction we are headed, we will see thousands and 
thousands of family farmers leaving the land. It is because we have a 
farm policy that says you can't make a living out there. It tells 
family farmers you can't make it. Then this country will have lost 
something significant.

  The seedbed of family values in this country that we hear so much 
about has always been the family farm. These

[[Page S4411]]

values roll in from the seedbed of the family farm into small towns and 
into America's cities. We will lose something important in this country 
if we do not decide family farms are important and that we will do 
something to try to protect them.
  Some say in this Chamber, let farmers operate in the free market. 
Well, there is no free market. Do you think farmers can raise a cow and 
ship it to China? I think not. Can they raise a pig and sell it in 
China? I don't think so. Do you think farmers can compete against 
Canada, which sends unfairly subsidized durum into our markets? Can 
farmers compete against the European communities that subsidize their 
commodities at 8, 10, and even 12 times the level of U.S. subsidies in 
recent years in trying to get foreign markets for European wheat? Is 
that fair? Is that free? I don't think so. Yet, we tell our farmers, 
you just go ahead and operate in that marketplace. We will just call it 
free.
  What happens in this free marketplace? What happens is that the 
people who haul the grain make record profits.
  The people who process the grain make record profits. The people who 
trade the grain make record profits.
  The only people who suffer the losses year after year, sufficient so 
that they are now going out of business in record numbers, are the 
people who buy the tractors, get up in the morning and plant the seed 
in the ground, harvest the crop in the fall, and try to sell it. Those 
are the people who are losing money.
  You go to your grocery store and ask yourself a question. When the 
price of wheat was $4.50 or $5.50 a bushel and it plummeted to $3.30 a 
bushel, ask yourself what happened to the price of a loaf of bread in 
the grocery store. Did you see that price come down? I don't think so. 
How about when the price of beef plummeted? Did you go to the meat 
counter in your grocery store and see that the price of beef came down? 
I don't think so.
  What does it say about this economic system of ours when we say to 
the people who do the hard work, the people who wear the work clothes, 
and start the tractor, and plow the ground, and plant the seed, and 
harvest: ``You can't make any money. It is everybody else in this 
process who can make record profits. But if you grow the seed, you lose 
money.''
  When they take that wheat into a processing plant and puff it up and 
sell it on the grocery store shelf as puffed wheat breakfast food, they 
can charge more for the puff than the farmer is going to get from the 
wheat. One suffers and goes out of business, and the other makes a 
record profit.
  If this Congress and this country doesn't start caring a bit about 
whether we have family farmers in our future, this country is going to 
lose something very important. When we talk about this subject around 
here, everybody talks about economics and dollars and cents. This isn't 
just about dollars and cents. This is not about knowing the cost of 
something. This is about knowing the value of something. We need to 
know the true value of family farmers in this country.
  I am enormously frustrated. This article in the Wall Street Journal 
chronicles what we see and what we know every day in the streets of 
North Dakota, in our small towns, and out on the country roads, and the 
same is true in Montana. We have heard it farmers who come to our 
meetings and stand up. One farmer comes to mind who came to a meeting 
of mine. He was a big, burly guy and had kind of a beard. It was not a 
long beard, but kind of a short beard. He had friendly eyes. He stood 
up. He was a tall fellow. He said, ``My granddad farmed, my dad farmed, 
and I have farmed for 23 years.'' And then his chin began to quiver. He 
got tears in his eyes, and he said, ``But I have to quit this year 
because I don't have the money to continue. I'm out of business.''
  He was the third generation in the family to farm. He was going out 
of business because this country has a farm policy that says we are 
going to pull the safety net out from under family farmers. Now, we had 
better reconnect that safety net if this country cares about having a 
family farmer left in its future.
  Senator Conrad, myself, Senator Baucus, Senator Daschle, Senator 
Wellstone, and so many others on both sides of the aisle, care about 
the future of family farmers. We must, it seems to me, convince the 
rest of this Congress that this current approach is an approach that 
leads to failure.
  Let me read a paragraph in the Wall Street Journal article:

       The situation in Kittson County suggests that 
     deregulation--

  Which is the description of the current farm policy, which I voted 
against proudly--

       is staying, and for a grim reason: Farmers are giving up. 
     Nobody is organizing the type of protests that attracted 
     national attention the last time so many farmers here were in 
     trouble. That was in the mid-1980s debt crisis, when Randy 
     Swenson would travel from his Kittson County farm to Fargo 
     and Bismarck to join demonstrators demanding a federal 
     bailout. Now, the 46-year-old grower is just quitting.

  I say to those out there on the family farm who have struggled, who 
risk everything in trying to make a living every single day--and I hope 
my colleagues will join me in this--that they ought not to give up 
hope. There are plenty of us in Congress who understand that family 
farming is a way of life that this country ought to nurture and protect 
and help in its future.

  I hope, as we proceed to discuss this in the coming weeks, that we 
can impress the need for a change upon those who were the architects of 
this farm program. The current program puts farmers into the 
marketplace, whatever that marketplace happens to be. There are those 
who think this is fine, because after all they think it is a free 
marketplace. I hope they come to understand that the marketplace is not 
free. It has never been free.
  We can't have farmers compete against unfair trade. We can't have 
farmers compete in a marketplace dominated by millers who want low 
prices in the marketplace and grocery manufacturers who want lower 
prices in the marketplace. We can't ask them to compete against scab 
disease that will wipe out the crop yield and crop quality. We can't 
ask them to compete against a railroad that will haul their grain to 
market but charge them 20 or 30 or 40 percent more than is justifiable.
  If somebody thinks that is a free marketplace, then somebody doesn't 
know what ``free'' or ``marketplace'' really means. We can do better 
than that. There are enough of us here to raise enough dust to require 
that we do better, so that in the coming days some of this policy can 
change to be helpful to family farmers.
  Mr. CONRAD. Will the Senator yield for a question?
  Mr. DORGAN. I am happy to yield.
  Mr. CONRAD. I don't know if the Senator noticed in the Wall Street 
Journal article, former Secretary of Agriculture Bob Bergland said, 
``Unless the bankers get worried, nothing will get changed in 
Congress.''
  Isn't it the case that you and I just met yesterday morning with the 
bankers from our State and those bankers are worried? We had banker 
after banker from across the State of North Dakota tell us they are 
going to wind up farming. We just got a report that, for the first time 
in anyone's memory, land in the Red River Valley of North Dakota, which 
is the richest farmland in the world, will not be farmed this year; it 
will not be farmed.
  Isn't it the case, Senator Dorgan, when we talked to our bankers, 
they told us they anticipate thousands of farmers leaving the land this 
year in North Dakota and a much more serious situation next year unless 
we take action?
  Mr. DORGAN. That is exactly the case. I just hope that as we finish 
these comments now, we will all understand that there is work to do. 
When you see reports like this--reports that don't surprise us because 
we have been hearing it for some long while--we should understand that 
while part of this country is doing quite well and there is a lot of 
good economic news, there are also troubled spots in our economy that 
are causing enormous hurt and pain to people who don't deserve it.
  America's family farmers are wonderful people. They are the people in 
this country who work, who grow, who risk, who come together, neighbor 
to neighbor, to help each other. But they can't help each other when 
they go to the market and discover that the price of wheat is $3 or 
$3.30, or when they go

[[Page S4412]]

to the field and discover that scab wiped out half the quantity of 
their grain, or when they go to the railroad and discover that the 
price to haul the wheat to market is vastly inflated, or when they go 
to the border up in Canada and discover unfair shipments of grain that 
undercut their prices, or when they say, I would like to sell my wheat 
to China, or my beef to China, but you can't get wheat or meat into 
China in any meaningful quantity because we don't have open markets 
overseas.
  It is not fair to put farmers in that position, and we should not. It 
seems to me that we have a responsibility to provide a basic safety net 
if we want to protect a network of family farmers to be present in this 
country's future. I think we ought to do that. I think it is a priority 
for us in this Congress, and I hope that a number of us can work 
together on a bipartisan basis to see that this occurs in the coming 
weeks and months.

  Madam President, I yield the floor.
  Mr. HUTCHINSON. Madam President, what is the pending business?
  The PRESIDING OFFICER. The pending business is H.R. 2676, the IRS 
reform legislation.
  Mr. HUTCHINSON. Madam President, I ask unanimous consent to speak for 
up to 10 minutes as in morning business.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  The Senator is recognized for 10 minutes.

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