[Congressional Record Volume 144, Number 63 (Monday, May 18, 1998)]
[Senate]
[Pages S4945-S4950]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    UNDERCUTTING OUR FAMILY FARMERS

  Mr. DORGAN. Mr. President, I come to the floor today to talk about an 
issue dealing with agriculture. Later this week, sometime this weekend, 
a boat will pull up at a dock in California loaded with 1.4 million 
bushels of European barley. This barley was sold into this country with 
a subsidy of well over $1 a bushel. It is now being hauled from the 
European Union to the shores of the United States, deeply subsidized, 
unfair trade, undercutting our family farmers. It is an outrage, and it 
should not happen. We suggested that the sale be terminated when it was 
announced, but it was not. I suggest today that perhaps somebody ought 
to refuse to unload the barley when it reaches the shores of 
California.
  Let me describe for a few moments why this is just a symbol of a very 
serious problem in the farm belt. I want to show a series of charts 
because I want the American people and my colleagues

[[Page S4946]]

to understand that we are confronted with the question of whether we 
want any family farmers in this country's future. We are seeing family 
farmers going broke in record numbers. In my State, there was a 55-
percent increase in auction sales over last year. They are calling 
auctioneers out of retirement to handle the auction sales, because 
there are so many sales of family farmers having to quit.
  Now, farming isn't just a business. These are families living on the 
farm. There is a yard light that illuminates the place that represents 
the dreams of a family that wants to farm. These farms represent the 
economic blood vessels that pump life into our small towns. It is a way 
of life that is very important to this country.
  There is a real difference between family farmers and the agri-
factories that farm from California to the State of Maine with large 
mechanized corporate farming. The family farm makes a difference in our 
society. It is the seedbed of family values that has nurtured and 
rolled itself from the family farms to small towns, to America's 
cities. If America decides it doesn't care about whether there are 
family farmers, it will have lost something valuable.
  I received a letter from a farmer just the other day. Its just one of 
many such letters from other farmers. I am getting many calls and 
considerable mail from farmers. This particular letter says, ``It has 
come to my attention now as a farmer that the United States is 
preparing to let an entire industry''--that is, family farmers--``die. 
If an airline strikes, the President intervenes; if UPS strikes, the 
President intervenes; if a railroad suggests a strike, the President is 
up in arms. But when farm commodity prices fall and family farmers are 
in peril, nobody seems to say much.''
  Let me describe the circumstances of our North Dakota farmers. I met 
with a group of North Dakota producers this past Saturday with my 
colleague, Senator Conrad, in Fargo, ND. We visited, once again, about 
the problems and what can be done about them. Here is what they face. 
Our three largest crops--spring wheat, durum wheat, and barley--had a 
41-percent reduction, a 21-percent reduction, and 41-percent reduction 
in gross income from reduced yield and price. Ask yourself, if you were 
in business and you have a 40-percent reduction in your gross sales and 
a reduction in your price, what is going to happen to your business?
  These are family farmers. They don't have deep pockets. So here is 
what has happened, as a result, to net farm income. Take all the 
farmers out there in North Dakota and evaluate what happened to the net 
farm income. Net farm income in 1996 was $764 million, divided among 
30,000 farmers. In 1997 net farm income was down 98 percent, down to 
$15 million in net farm income. Divided among all those farmers, that 
is less than $500 net income per farm. But this doesn't tell the whole 
story, because almost all of that net farm income goes to the state's 
largest farmers, and almost all of the middle- and lower-income farmers 
are seeing huge losses. Let me show my colleagues what has happened to 
the price of wheat.
  One can make the case, or not make the case, that this has something 
to do with what Congress did. It probably has some small amount to do 
with what Congress did in passing a new farm bill, and maybe it has 
something to do with a lot of other things happening in the world.
  Let's look at the price of the wheat. We passed a new farm bill back 
in April 1996. You see what happened to the prices received by farmers 
for wheat since May 1996. It has gone down, down, down, way down. It is 
now at the lowest level in five years. That is what farmers live on. 
The price determines whether they are going to make a living and stay 
on the farm. The price of wheat has gone down 44 percent. It is down, 
down, way down.
  Let me show you what has happened to farmers' costs of production. 
Seed, fertilizer, fuel. They are all up, up, up, way up, month after 
month, year after year.
  Let me show a chart, if I might, that talks about some of these 
specific trends. If you are a farmer, you need to have a tractor to 
plow. We don't do it with mules anymore; we do it with tractors. What 
has happened to the price of tractors? Farmers can tell you in an 
instant. The price goes up, up, straight up. The price of a combine is 
also up, up, straight up. How about the price of anhydrous ammonia, the 
fertilizer needed to provide the nutrients to these crops? You can see 
what has happened. There has been a huge spike in the last few years. 
The price of fuel is up. In the last five years, there has been a 70-
percent increase in the cost of the inputs that many farmers have to 
buy to put a crop in the ground.
  This isn't like other businesses. When you are a family farmer, you 
can't pass these costs along. People do not think much about family 
farmers, unfortunately. They get their butter from a carton; they get 
their milk from a bottle, or a carton; food from a can, or perhaps a 
box. But it all comes from the farm. It all comes from someone who gets 
up early to do the chores, and then gasses up the tractor, and goes out 
and plants the field.
  Will Rogers some 60 years ago said, ``If all the cows in the country 
failed to show up at the barn one morning to be milked, why, that would 
be a problem.'' He said, ``If all the lawyers and accountants in 
America failed to show up for work one morning, we wouldn't miss a 
lunch.'' He was describing what is really important. Where does all of 
this come from? It comes from the ingenuity and risks taken by families 
who decide they want to farm as a way of life.
  The price of a loaf of bread has almost no money in it for farmers. 
Here is the price of a loaf of bread. Here is what the farmer gets. 
Just about the heel, if that much.
  So wheat 2 years ago was $5.50 a bushel, and now it is $3.20 or 
$3.30. Has anybody seen the price of a loaf of bread come down? I don't 
think so. What is happening is, the people who make the bread are 
making record profits. The people who haul the grain on the railroad 
tracks are making record profits. The people who put it in a plant and 
then perhaps puff it and then sell it on the grocery store shelf as 
Puffed Wheat are making a profit because it is more profitable to puff 
it than it is to grow it.
  I wonder if there is not something wrong with this picture for 
America. The snap, crackle, and pop, the puff, and the crisp all have 
more value than the wheat. The package, the advertising, and the 
transportation have more value than the wheat.
  This country can't decide on a policy that says family farming has 
merit and it is important to this country?
  Finally, bread profits soar at the same time that wheat prices come 
down and family farmers go broke. Something is wrong with that picture.
  This chart shows it on the same page. Bread costs continue to rise, 
and the price of wheat continues to fall.
  I went to a small school. There were nine students in my class. They 
taught math at my school, maybe not higher math, but I can add and 
subtract. I understand what adds up and what doesn't. This doesn't add 
up. It does not add up if you care about whether this country has a 
future for family farmers. Farming is not just a business.

  There are a lot of reasons that we are in trouble on the farm. 
Farmers are told by Congress that, we are not going to have a safety 
net for you anymore, and that we are going to pull that safety net out 
from underneath our farmers.
  Farmer are unlike most other business. They take huge risks: First, 
they risk that when they plant a seed, it may not grow. So the cost of 
that seed might represent a loss in the farmers' pockets. Second, if 
the seed grows, it may be in June or July that a hailstorm will come 
and destroy the crop. Or the bugs will come and eat the crop; or crop 
disease, scab or vomitoxin, will come and destroy the crop.
  Maybe none of those things happen. Maybe you plant a seed and it 
grows and none of those natural disasters occur. Then you combine the 
crop to get it off the field and take it to the grain elevator, only to 
discover that it costs you $5 a bushel to produce it and you get just 
$3.35 a bushel to sell it. The result is that your family is going to 
have to move from the farm. That yard light is going to go out. Someone 
will farm that land. It will be a big operator, or a big corporate 
farm. They will just fold it into their bigger corporate farm, and 
there will be tractors that will plow for miles. But that yard

[[Page S4947]]

light will be out forever, and that small town will continue to die. 
The county will shrink. The rural life style will wither.
  A wonderful author from my home State, who was a world-renowned 
author, died a couple of years ago. He made a prediction in his book. 
He stated it more eloquently than I can . He said that this country 
resulted from an agrarian lifestyle which created the family values 
that nurtured America and refreshed America. He reminded us that the 
family values that refreshed America continually came from the family 
farm, where neighbors understood that you have to help each other 
because the people can't do it alone. Without our family farms, those 
family values that rolled from rural America to our cities will be 
lost.
  It is not to say that farmers are better than anybody else or have 
more value. It is just that farming is different. It is a family 
occupation. Yet, it has enormous risks. For years in this country we 
decided that we were going to try to provide some help to offset those 
risks. They do it in every other country.
  We are the only superpower. We are the only nuclear superpower, 
military superpower, left. We are certainly an economic superpower. 
Almost any other country with any economic clout decides that, as part 
of its budget, it makes sure it continues to have a network of family 
farms. Therefore, it provides some price supports against all of these 
risks that family farmers face. But not us. We decided farmers should 
compete in the open market despite the fact that there isn't an open 
market.
  As I said when I started, the ship that is going to dock in 
California at the end of this week will haul 1.4 million bushels of 
European Union barley subsidized to the tune of more than $1.10 cents a 
bushel. There is no American farmer that can compete with that. It is 
simply unfair.
  But that is just the tip of the iceberg. In every direction you look 
in international trade, our farmers are injured. The California dock is 
not the only place. Go to the Canadian border, where we are flooded 
with unfairly traded Canadian imports. Go to the Mexican border and see 
what NAFTA has done with respect to the unfairness of agricultural 
trade. Go to China and ask why we can't get sufficient amounts of wheat 
or pork into China. Go to Japan and ask why it costs $30 a pound to buy 
a T-bone steak in Japan because you cannot get enough American beef in 
Japan.
  We are rife with trade problems that injure the American farmer every 
single day. And our trade policy is apparently to sit on our hands and 
do nothing about it.
  It seems to me that we can't enforce trade agreements. But first of 
all, we need to negotiate good agreements. Let me mention Will Rogers 
once again. Some 60 years ago, Will Rogers also said that, ``The United 
States has never lost a war and never won in a conference.''
  First, we ought to get trade negotiators to go out and negotiate good 
agreements for this country. They ought to be hard-nosed economic trade 
agreements and not some soft-headed foreign policy negotiations about 
what we ought to do to help other countries.
  I am not against helping other countries, but first I am for helping 
family farmers. We need trade policies that do not injure them. We need 
to help them. If they had any gumption, they would be at that dock out 
in California this week meeting the ship and suggesting that the ship 
should never be unloaded on American shores because it is symptomatic 
of everything that is wrong with our trade policy.
  Second, we ought to decide that it matters to have a support price 
for family farmers. No, it would not be a giveaway nor a subsidy to 
farmers. The subsidy in American food policy is that we have the 
highest quality food anywhere in the world for the lowest price 
anywhere in the world. We have a cheap food policy that provides a 
subsidy to the consumer. This is at the expense of family farmers who 
can't make a living because what they grow they have to sell at well 
below the cost of what it took them to grow it. That adds up to a 
deficit, and that adds up to serious trouble.

  In my judgment we ought to use every tool that is available to us as 
a country. Could the export enhancement program help? Maybe. Is it 
being used now? No. Why have we decided to disarm ourselves? The 
European Union uses their export subsidies to sell their grain from 
their family farmers into North African markets and they have 10 times 
the subsidies we have ever considered using. So, why does our country 
say, if they are going to take our African markets away from us, that 
is just fine, and we can't do anything about it? Would we disarm in any 
other way? Why would we disarm on trade competition? Why would we not 
say, on behalf of American producers, that we will stand up for you? 
This country believes in you. This country cares about you. Why on 
Earth will this country not decide that it will stand up for its 
producers?
  We, in my judgment, must begin as a Congress now to evaluate whether 
the path we are on from the previous farm bill passed a couple of years 
ago is the right path or the wrong path. It was called the Freedom to 
Farm bill. Part of it was just fine. Part of it was to take government 
out of the decision of what crops a farmer was going to grow. I 
supported that part. But part of it was a devastating blow to farmers. 
It said, by the way, we are going to pull the rug out from under you in 
price supports, and we are going to say to you, compete in the free 
market when in fact there is no free market.
  It asks our farmers--the Johnson's, the Larsen's, the Olson's, 
because I come from that part of the country where we have a lot of 
folks with those names--it asks those farmers to compete not just 
against French farmers, not just against German farmers or Italian 
farmers. It asks them to compete against all those governments as well 
that deeply subsidize their sales into foreign countries.
  I ask the question today of Congress and also this administration 
whether they are willing to stand up and ask some tough questions about 
agricultural policy in this country. Do family farmers matter? Do you 
care? When you fly across the Dakotas and Nebraska and Kansas and the 
breadbasket of our country at night and look out the window of an 
airplane, do you care whether you see yard lights? Do you care about 
our farmers out there who are trying to make a living with great risk? 
Do you care whether they really have an opportunity to make it? Do you 
think they provide worth to our economy? Or is this just an economy now 
which says bigger is better, concentration has virtue, and that mergers 
and combinations have merit, because they have the financial clout and 
the capability to suggest that an economic system that rewards size and 
rewards bigness is the best system. I don't necessarily believe that.
  Oh, I think the market system is a wonderful system, but I also 
believe that in this country agricultural producers have never 
experienced a free market and will never experience a free market 
unless substantial changes are made not just in this country but other 
countries as well.
  I want to make one additional point. We now have a number of 
countries in this world in which our farmers can't market because we 
have embargoed them through sanctions. We have said we don't want to do 
business with Cuba; we don't like Fidel Castro. So wherever Cuba is 
going to buy wheat, it is not going to be from the American farmer. In 
Libya, we don't like Qadhafi. So where is it going to get its grain. It 
is not going to be from this country. Iraq, well, in the last year or 
so, we have shipped them a bit, but not much. Most of Iraq's grain 
comes from elsewhere because everyone knows the problems with Iraq.
  I can go through a list of countries in which the American farmer 
pays a price because we have decided to embargo them. I happen to 
believe that you ought never under any circumstances decide to cut off 
shipments of food. Nobody is going to shoot food back at you. It seems 
to me it makes good sense in this country as a matter of public policy 
to decide that food shipments and food sales ought to be the last thing 
you would ever sever. We have a lot of hungry people in the world. It 
makes no sense to me to see a country with as bountiful an opportunity 
and as bountiful a harvest as we often get decide that somehow this 
grain doesn't have value. Gosh, I think this grain is more valuable 
than nuclear weapons. I think this grain is

[[Page S4948]]

more valuable than most of what people produce. This is a hungry world 
and a growing hungry world.

  It breaks my heart to see family farmers write to me day after day 
and come to me in North Dakota as they did this weekend and call day 
after day and tell me that their dream is ending.
  A woman called a couple of weeks ago, and she began crying on the 
phone. She and her husband, just out of high school, began to farm. 
They have never done anything else. And they scraped and struggled and 
rented some land and then bought a little bit of land. She said, ``We 
don't go to town on Saturday nights. We don't buy frills. We scrape by 
and we have always scraped by. We do nothing that is extravagant.''
  She said, ``But, we finally have come to the end of the road. We are 
now in our mid-thirties. We have farmed for nearly 15 years and we have 
no other skills, but we just can't continue to make it unless farm 
prices improve. Our banker won't give us a loan. We can't put in the 
spring crop.''
  When you hear those stories, it breaks your heart because we are 
losing something valuable.
  I would conclude today by simply saying this: My colleague, Senator 
Conrad and I, have spoken on the floor I guess a half dozen times on 
this subject. We want people to understand that this issue matters. 
This makes a difference to our country. There is a big difference 
between the right public policies and the wrong public policies. One 
offers people hope and one despair. One will help move us forward in 
trying to nurture and protect and help family farms in our future and 
one will move us backward towards farm failures and desolation and 
despair on the family farm.
  Let me end as I began. North Dakota State University did a study and 
showed us that just in the last year there have been almost $400 
million in losses in net farm income. That is $400 million just from 
those three crops: spring wheat, durum, and barley. The problem is that 
in that circumstance I have described in our State, family farmers just 
can't make it.
  Something has to change. We need better trade policy, better price 
supports, commodity loan rates that give farmers a chance to market 
when it is advantageous to them, not just to the miller or the grocery 
manufacturer. We must fight for changes in policies. I know my 
colleague, Senator Conrad, and others will be talking about this issue, 
but it is critically important. I will come to the floor again and 
again to talk about what we must do to solve this problem.
  Recently, Dale Thorenson, a farmer from Newburg, ND wrote an opinion 
letter for the New York Times. He had received a gift subscription to 
the New York Times from his father-in-law, and thought that as a new 
subscriber he should write an article about the conditions facing 
farmers in North Dakota. I don't know if it has been printed yet in the 
New York Times, but it did get printed in the Grand Forks Herald. I 
hope the Times does print it because he eloquently captures the 
economic and policy dilemma that now surrounds our nation's family 
farmers.
  Mr. President, I ask unanimous consent that this article be printed 
in the Record.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

              [From the Grand Forks Herald, May 10, 1998]

            The Farm Crisis That Nobody Wants To Hear About


    as the nation prospers, farmers in the northern plains flounder

                         (By Dale A. Thorenson)

       Newburg, N.D.--On April 3, the Dow Jones Industrial Average 
     broke above 9,000--a new high-water mark in what seems to be 
     an unending spiral upward. At the present rate of growth, a 
     12,000 Dow will be seen by the end of the year. Highly 
     unlikely . . . but who is willing to step in front of this 
     freight train?
       Ten days later, on April 13, the price of the nearby 
     contract of wheat at the Chicago Board of Trade broke the $3 
     mark--only this price was heading in the opposite direction 
     of the Dow. The $3 offered for a bushel of wheat on April 13 
     was a far cry from the $7.16 mark reached just two years 
     prior--a time when the new Freedom to Farm legislation was 
     being enacted in our nation's capital.
       The sponsors of Freedom to Farm promised this legislation 
     would revolutionize the farming industry. Gone were the 
     planted acreage mandates from the federal government. The 
     farmer was given the flexibility to plant what the market 
     wanted--hence the name Freedom to Farm was coined.
       In return for this flexibility, the farmer signed a seven-
     year contract to receive declining support payments decoupled 
     from production--severance pay, for lack of a better 
     explanation--as he was weaned from federal subsidies. The 
     farmer was told the rest of the world also would end 
     subsidies and this new world market free from government 
     intervention would cause unending growth in exports as 
     markets expanded because of increased demand. The 
     conventional wisdom of the time assumed the United States 
     farmer--given this level playing field--would dominate world 
     agriculture.


                       good intentions gone awry

       Well, Freedom to Farm has revolutionized farming, but not 
     in the way intended. And the playing field is far from being 
     level. This farm program--called by many as Freedom to Farm--
     enacted in conjunction with historically high commodity 
     prices, has turned out to be a sham. In what could almost be 
     described as an ill-advised acceptance of a bribe, the farmer 
     pocketed a first-year subsidy payment and a decent price for 
     his crop. It has been downhill since--at least in wheat-
     producing regions of the Great Plains. But make no mistake 
     about it. The corn and soybean farmers of the Midwest will 
     get their turn on the rack. The $3,000-per-acre land costs of 
     the Corn Belt will not be competitive with the new land being 
     developed in South America at a cost of $50 per acre.
       As if on cue, the costs of producing a crop--fertilizer, 
     chemicals, machinery required--increased dramatically. The 
     ``bribe'' went directly into the hands of the petro-chemical 
     companies who make the vast array of inputs needed for 
     production agriculture. And, as the $3 price suggests, a 
     downward spiral in wheat prices commenced.
       One of the many important details left out of this so-
     called Freedom to Farm legislation was an iron-clad assurance 
     from the European Union that they would agree to reduce their 
     farm subsidies simultaneously. Supposedly, the EU was to 
     phase out subsidies over the same time period. But the simple 
     fact is that their phase-out is from a much higher level--and 
     as speedy as a tortoise on a cold day. Also, unlike the 
     intentions of the United States, the EU's subsidies will not 
     end entirely.
       Specifically, the 300 million or so people of the EU spent 
     $47 billion to $48 billion on their farm program this past 
     year. This is in comparison to the United States expenditures 
     of a little more than $5 billion. In the matter of export 
     enhancements--a procedure where the seller pays the buyer to 
     buy the product--the EU spent about $7 billion to $8 billion. 
     The United States anted up about $150 million, or about 50 
     times less. The negotiator from the EU who sold this bill of 
     goods to the United States policy-makers could easily get a 
     job selling furnaces in hell.


                     shortchanged in wheat country

       As bad as this is, the wheat farmers of the Great Plains 
     states were shorted in another way in comparison to the corn 
     and soybean farmers in the Midwest. The federal loan rate for 
     wheat was capped in the Freedom to Farm bill at $2.58, about 
     52 percent of the United States Department of Agriculture's 
     most recent five-year average cost of production projection 
     for a bushel of wheat--which was pegged at $5. In contrast, 
     the federal loan rate for corn and soybeans stands at 72 
     percent and 89 percent, respectively, of USDA's recent cost 
     of production estimate.
       The United States produces about 9 billion bushels of corn 
     and 2.5 billion bushels of soybeans annually. Annual 
     production of wheat has been about 2.7 billion bushels in 
     recent years. Uncapping the loan rate for wheat and raising 
     it to the percentage of production costs enjoyed by the corn 
     and soybean producers--$3.75--culd potentially cost the U.S. 
     Treasury up to $3 billion annually if the EU continued to 
     insist on their predatory marketing tactics. But not doing so 
     puts the U.S. wheat farmer in the position of competing not 
     only with his contemporary in Europe, but also with the 
     government treasuries in Europe. There should be little doubt 
     as to who will survive this grain war if the situation 
     remains the same.
       North Dakota and northern Minnesota farmers especially have 
     been hard hit with economic misfortune even beyond the 
     disastrous collapse of wheat prices. This region is now going 
     on five years of a serious wheat disease outbreak called 
     Fusarium head blight brought on by abnormally wet periods 
     during the flowering stage of the crop. Couple this dilemma 
     with the harsh winter blizzards of 1996 to 1997, which then 
     produced the well-publicized flood of the century in the Red 
     River Valley, highlighted by the almost complete inundation 
     of Grand Forks and East Grand Forks. Another pitfall is the 
     proximity of this region to the Canadian wheat producing 
     area, called the Prairie Provinces--Manitoba, Saskatchewan 
     and Alberta. The North American Free Trade Agreement has 
     allowed Canada to dump its excess wheat in the United States 
     while maintaining the support for its farmers at the same 
     time. Guess where in the United States Canada dumps this 
     wheat?
       The March 30 issue of Agweek, one of North Dakota's weekly 
     agricultural news journals published by the Grand Forks 
     Hearld--the paper whose ``Come Hell and High Water'' headline 
     last April made it world-famous--listed approximately 180 
     farm auctions. Those were not poor operators or retirement 
     sales, but good farmers--many of

[[Page S4949]]

     these farms were fairly large operations--in their prime who 
     have simply given up. These farmers had survived the 
     bloodbath in agriculture of the 1980s but were unable to 
     survive Freedom to Farm. They will never be replaced.
       This country, with all its abundance and prosperity, needs 
     to come to the realization that a wheat farmer needs to 
     receive more than a few pennies of the $1.50 a consumer pays 
     for a loaf of bread. Europe, having starved twice in this 
     century during two world wars, understands that and intends 
     to keep its agricultural industry intact.


                            trivial pursuit

       All the fuss lately about President Clinton's sex life or 
     what a certain special prosecutor is thinking as he picks up 
     his morning paper is really quite trivial in comparison with 
     the many national and international problems now at hand. It 
     is for this reason the public considers the current situation 
     in Washington much ado about nothing and not because of the 
     bemoaned fact that a new low in moral standards has been 
     established.
       In particular interest to more than a few Great Plains 
     wheat farmers is if this country will stand up and fight for 
     them. Or does the United States consider these farmers 
     expendable in order to maintain this nation's long-standing 
     policy of cheap food--even if in the end the reverse will 
     surely happen?
       A couple final questions on this subject this country needs 
     to ask itself: If the agricultural sector of this country is 
     deemed expendable and not worthy of preserving, will the 
     United States one day become as reliant on food for foreign 
     countries as it is for oil? If so, does the United States 
     really want to take this risk?

  Mr. DORGAN. Mr. President, I yield the floor.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
North Dakota, Mr. Conrad, is recognized to speak for up to 15 minutes.
  Mr. CONRAD. I thank the Chair. I thank my colleague from North 
Dakota, Senator Dorgan.
  Senator Dorgan and I participated in meetings this weekend with 
representatives of major farm organizations and people who are watching 
the farm economy, those who are charged with doing the statistics and 
the analysis from the university, also the head of the farm service 
agency who has been made part of a crisis response team by the 
Secretary of Agriculture to deal with the cash flow crisis that is 
occurring in North Dakota and other farm States as well.
  Last week, I made a series of speeches on what I called the stealth 
disaster that is affecting North Dakota. Last year, many may recall 
that we were faced with more visible disasters--flooding and fires of 
unprecedented nature in the Grand Forks and Red River Valley area. This 
year, we have another disaster, but it is getting almost no attention. 
It is a stealth disaster. It is a stealth disaster because it is flying 
below the radar screen. It is not getting the kind of attention these 
other disasters did. And part of the reason is it is not so visible. It 
is not a story that you can easily put on television, but it is a 
disaster nonetheless.
  As I showed last week, farm income in North Dakota declined from 1996 
to 1997 by one measure by 98 percent. Those are statistics available to 
us from the Labor and Commerce Departments. By another measure, a study 
just done for Senator Dorgan and myself by North Dakota State 
University, farm income declined in that period by 59 percent. By 
either measure, these are dramatic and precipitous declines that are 
leading to a cash flow crisis that is engulfing the producers of our 
State. We anticipate losing perhaps as many as 10 percent of the 
farmers in North Dakota this year. We have lenders who are telling us, 
for the first time in history there is farmland in the richest part of 
North Dakota, which is the richest farmland in the world, that will not 
be farmed this year. That is a stunning development.

  Growing up in North Dakota, we were always told that the Red River 
Valley of North Dakota used to be the bottom of a lake, it used to be 
the bottom of Lake Agassiz. Because it was the bottom of a lake, the 
lake deposited this extraordinary land, loam that is 6 to 8 feet deep. 
As I was growing up, we were told there had never been a crop failure 
in the history of North Dakota in the Red River Valley.
  In the last 5 years, we have had 5 years of dramatically reduced 
production because of overly wet conditions and an outbreak of a 
disease called scab that took a third to a half of the crop last year 
in much of North Dakota. Scab is a fungus, and it is absolutely 
devastating. What we have learned is that the farm policy that is in 
place in this country cannot cope with this combination of disasters--
disease and adverse weather coupled with very low prices. That is a 
triple whammy that is putting thousands and thousands of farmers out of 
business.
  I thought it might be helpful to compare our agriculture policy in 
this country with our chief competitors', the Europeans, to see what 
they are doing versus what we are doing. Senator Dorgan made reference 
to what I have said--repeatedly last week on the floor--that it is one 
thing to say to our farmers, you go out and compete against the French 
farmer and the German farmer and we will see who wins, who is the best 
producer, who is the most efficient. We are willing to take on that 
fight any time, any place. But what we are being asked to do is not 
only compete against the French farmer and the German farmer, we are 
telling our producers to go and compete against the French Government 
and the German Government as well. That is not a fair fight. You can't 
ask a farmer out in North Dakota to take on that French farmer and that 
German farmer and while he is at it take on the combined resources of 
the French Government and the German Government. But that is exactly 
what we are doing.
  This chart shows, for 1997, total agricultural expenditures, the 
United States versus the European Union. The European Union is in red; 
the United States is in blue. You can see, in 1997 they spent almost 
$46 billion supporting their producers. We spent $5 billion. That is 
not a fair fight. When we look to their spending on exports, the United 
States versus the European Union--again, the European Union is in red; 
the United States is in blue. This is to support exports. The Europeans 
spent almost $8 billion. We spent $56 million. That is a ratio of 138 
to 1. That is not a fair fight. We are sending our troops into the 
battle and they are armed with BB guns and the other side is firing 
live ammunition. How are you going to win this kind of fight? We would 
never do this in a military confrontation. We would never allow 
ourselves to be in a situation in which the other side had the 
predominance of resources. But that is what we have done in a trade 
conflict, and it makes no sense.
  Unfortunately, the pattern continues because, if you look at the 
expenditures of the two sides for market development, you see the 
Europeans spending $350 million a year; the United States, $225 
million. Again, they are simply outgunning us at every turn in these 
battles for agricultural markets. They are winning these markets the 
old-fashioned way--they are buying them. And make no mistake, they have 
a strategy and they have a plan and their strategy and plan is to 
dominate world agricultural trade.

  Let's look and see how successful they are with this strategy and 
plan. This chart shows what has happened to wheat exports from the 
European Union over an extended period of time, starting back in 1960, 
and going through 1996, the last year for which we have full 
information from the Europeans. Look at this trend and pattern. They 
have gone from being major importers of wheat to major exporters of 
wheat. And their improvement has really occurred, the most dramatic 
part, in the last 20 years. This did not happen by happenstance. This 
happened as a result of a concerted plan, a concerted strategy. Because 
the Europeans have been hungry twice, they never intend to be hungry 
again, and they recognize the critical importance of dominating world 
agricultural trade. That is the pattern, in terms of what they have 
done.
  What have we done? From 1982 to 1996, this is what has happened to 
wheat exports from the United States. We are going nowhere. Worse than 
that, we are in steep decline. From 1995 to 1996, we have seen a very 
dramatic reduction in U.S. wheat exports. If you go back to 1995, that 
was not exactly a stellar performance in the last 16 years of history. 
So, while the Europeans are on the march, they are on the move, the 
United States is in retreat.
  It doesn't happen just with wheat. This is the outlook with barley. 
From 1982 to 1996, net barley exports from the European Union--not 
quite the same pattern. They suffered a very steep loss in 1992 to 
1994, but since then they are coming back and coming back strongly. 
During that same period, the United

[[Page S4950]]

States has seen dramatic slippage. In 1992 to 1996, we have actually 
gone below the line. We have become an importer. In fact, we have just 
had a case where subsidized exports from the European Union have come 
into the United States for the first time. We are asleep at the switch. 
What is happening in this country?
  We are going to have the same thing happen to us in agriculture that 
happened in electronics and automobiles and all the rest. We are going 
to wake up someday and we are going to find out that we have gone from 
being the major agricultural player in this world to being a second-
class citizen, because we have been asleep at the switch. This is not 
the whole story. It is a part of the story, but there is much more to 
tell. If we look at trade policy, we see that too often the United 
States negotiates agriculture away for other sectors of the economy. We 
saw it in the Canadian Free Trade Agreement that now allows Canada to 
pump millions of bushels of unfairly traded Canadian grain into this 
country, weakening our markets, weakening our prices, and costing us 
substantially. That is happening today because of a loophole in the 
Canadian Free Trade Agreement where our people simply got outtraded.
  We saw the same thing develop with NAFTA. In NAFTA, you recall, we 
negotiated a 10-percent reduction in tariffs by the Mexicans. They then 
turned around and devalued their currency by 50 percent. The net 
result, we went from a $2 billion trade surplus with Mexico to a $16 
billion trade deficit. And some call that a success. If that is a 
success, I would hate to see failure. I wonder what would happen if we 
saw failure in our trade negotiations, based on what has been happening 
with the Canadian Free Trade Agreement--so-called free trade; the so-
called NAFTA agreement, again so-called free trade agreement--and what 
has happened now with the European Union.
  It is unbelievable, that they are sending into the United States from 
Europe--barley. It is so heavily subsidized in their country that it 
undercuts our producers right here at home. It is not because they are 
more efficient. It is not because they are more productive. It is 
because their country is buying these markets. They are spending $47 
billion to support their producers when we are spending $5 billion. On 
exports, they are spending $8 billion a year when we are spending $56 
million. And we wonder why we are losing the fight? If we were in any 
military confrontation we would understand very quickly that we are 
just outgunned.
  Mr. President, it is time for the United States to fight back. We 
have to put the resources into this battle to win it. That is what we 
do in a military fight. That is what we ought to do in this trade 
confrontation. We ought to send a message to our friends in Europe that 
they are done having a free ride. We are in this fight and we are in it 
to win.
  I yield the floor.
  Mr. HUTCHINSON addressed the Chair.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
Arkansas, Mr. Hutchinson, is recognized to speak for up to 30 minutes. 
The Senator from Arkansas.
  Mr. HUTCHINSON. Thank you, Mr. President.

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