[Congressional Record Volume 144, Number 86 (Friday, June 26, 1998)]
[Extensions of Remarks]
[Pages E1256-E1257]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND 
               RELATED AGENCIES APPROPRIATIONS ACT, 1999

                                 ______
                                 

                               speech of

                            HON. TIM HOLDEN

                            of pennsylvania

                    in the house of representatives

                        Wednesday, June 24, 1998

       The House in Committee of the Whole House on the State of 
     the Union had under consideration the bill (H.R. 4101) making 
     appropriations for Agriculture, Rural Development, Food and 
     Drug Administration, and Related Agencies programs for the 
     fiscal year ending September 30, 1999, and for other 
     purposes:

  Mr. HOLDEN. Mr. Chairman, I rise today to share my support for 
America's dairy farmers, and to oppose efforts to strike a very 
important dairy provision from the FY99 Agriculture Appropriations 
bill, a provision that will extend the implementation of Federal Milk 
Market Order (FMMO) reform.
  The Agriculture Appropriations bill includes a very carefully crafted 
compromise designed to assure that Congress has sufficient time to 
review the Secretary of Agriculture's Final Rule for FMMO reform once 
it is issued. Specifically, the dairy language in the bill extends the 
deadline for USDA's implementation of FMMO reform from April 4, 1999 
until October 1, 1999. This extension is important for the following 
reasons:
  First, this provision will allow adequate time for Congress to review 
USDA's Final Rule in FMMO reform. In the 1996 Farm Bill, Congress 
requires USDA to reform the FMMO program by consolidating 33 milk 
marketing orders no later than 1999. USDA recently announced its 
proposed rules for FMMO reform. Included in the Secretary's proposal 
are two options for reforming the fluid milk pricing: Option 1A and 
Option 1B. The Secretary has indicated his support for implementing 
Option 1B even though 238 members of the House and 61 Senators have 
expressed their support for Option 1A. With the current implementation 
deadline of April 4, 1999, there is concern there may not be time for 
the new Congress to adequately review the Final Rule and make changes, 
if they wish, before that deadline.
  Second, the extension guarantees Congress time to make adjustments to 
the FMMO reform Final Rule, if necessary. Under this timetable, 
Congress will have six months from the release of the Final Rule, on or 
before April 4, 1999, to review the provisions of the Final Rule 
released by USDA and take up any changes they may wish to make. It 
would be much more difficult for Congress, which will be reorganizing 
following the fall elections, to complete its review of FMMO reform 
before the current April 4, 1999 deadline for implementation of FMMO 
reform.
  I would now like to share with my colleagues the reason for my 
concern regarding Option 1B, and why I support having the opportunity 
to have my concerns addressed upon the issuance of a Final Rule.
  In my home state of Pennsylvania, dairy is the largest agricultural 
enterprise in the state--representing a $1.5 billion industry. 
Pennsylvania is the 4th largest dairy state in the country, with dairy 
products accounting for 40 percent of agricultural outputs in 
Pennsylvania. In the last ten years, the number of dairy farms has 
declined by 3,200, to only 10,500, and the number of dairy cows has 
declined by 90,000, down to just 640,000. In Pennsylvania, it has been 
estimated that 17,000 jobs are tied directly to the dairy industry, and 
another 12,500 jobs--such as building, trucking, banking, etc.--are 
indirectly tied to the dairy industry. It has been estimated that a 2 
percent decline in Pennsylvania's dairy industry would translate into a 
loss of almost 600 jobs. Dairy is important to Pennsylvania, and the 
entire Northeast, because of the economic contributions it makes--both 
in dollars and jobs.
  Under Option 1A, projected annual income of dairy farms would 
increase $32 million. This is less than one half of one percent of 
total dairy farm income. Under Option 1B, however, U.S. dairy farmers 
would lose $365 million per year or $1 million per day under Option 1B. 
I have heard estimates that Option 1B could reduce mailbox prices by as 
much as $0.85-$1.25 per hundredweight in the Northeast.
  The pricing structure for Class I (fluid) milk is extremely important 
to dairy farm income, rural community economic stability, and the 
regional supply of fresh fluid milk. The phase-down of farm income 
proposed by Option 1B will clearly hurt the financial condition of 
farmers, with small family farms bearing the greatest burden. In fact, 
the proposed rule states that ``small businesses, particularly 
producers, would experience significant economic impacts.'' This runs 
counter to the USDA's recently released National Commission on Small 
Farms Report, ``A Time to Act,'' which states, ``the small farm is the 
cornerstone of our agricultural rural economy.'' As demonstrated by the 
238 House Members and 61 Senators who signed the April, 1998 letter to 
Secretary Glickman, there is tremendous support in Congress for Option 
1A in the pricing of Class I (fluid) milk. This option has broad 
bipartisan and geographic support from all major dairy producing 
regions of the country. Therefore, I am hopeful that USDA's final rule 
will have a Class I pricing surface, which resembles Option 1A.

[[Page E1257]]

  It is important to note, that, as a member of the Agriculture 
Subcommittee on Dairy, Livestock, and Poultry, I am pleased with some 
aspects of USDA's proposed rule, and I commend Secretary Glickman and 
the USDA's Agricultural Marketing Service for their hard work in 
attempting to create a consensus reform package on this issue. However, 
I remain concerned with the Option 1B proposal, as do a majority of my 
colleagues, and I look forward to working with USDA to resolve this 
issue.
  I urge my colleagues to support the FMMO reform extension, and oppose 
any efforts to strike this important provision from the FY99 
Agriculture Appropriations Bill.

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