[Congressional Record Volume 144, Number 95 (Thursday, July 16, 1998)]
[Senate]
[Pages S8283-S8285]
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

  The Senate continued with the consideration of the bill.
  Mr. CONRAD. Mr. President, I am going to begin discussing the 
amendment that we have been working on, on a bipartisan basis here, for 
a number of days, awaiting final determination from the Budget 
Committee on the question of a budget point of order. That is being 
discussed now by their legal people and the chief of staff of the 
Budget Committee. While we are awaiting that determination, I would 
like to take this opportunity to talk about the circumstances we find 
ourselves in and why the amendment that we have been discussing is 
needed.
  The basic idea is that we have enormous economic distress out across 
farm country. Certainly, in my own State, we have seen a triple whammy 
of bad prices, bad weather, and bad policy. The result has been 
collapsing farm income, and the result of that is thousands of farmers 
being forced off the land.
  This chart shows North Dakota farm incomes being washed away in 1997. 
According to the Government's own figures, from 1996 to 1997, farm 
income reported to the Commerce Department, reported by the Labor 
Department, went down 98 percent in North Dakota from 1996 to 1997. We 
all know there are many factors here. Low prices are a chief culprit. 
In addition to that, dramatically reduced production as a result of 
unusual weather patterns that have led to a massive outbreak of 
disease, so-called scab, which is really a fungus, which cost us a 
third of the crop in North Dakota last year.
  Let me just say it is not just North Dakota that is affected. USDA 
has informed us that many States would benefit by such an indemnity 
payment; that North Dakota, South Dakota, and Minnesota would be key 
beneficiaries, but so, too, would Texas, Oklahoma, North Carolina, 
South Carolina, Mississippi, Alabama, and the State of Idaho, and many 
other States as well. In a few moments I will show a map of the United 
States and show the States affected.
  What is happening is, in addition to all of those things, the so-
called Asian flu is costing us our most important export market. And on 
top of that, our own Government is sanctioning other countries and, as 
a consequence of those sanctions, removing us from being able to sell 
into those countries. So the fundamental problem is a dramatic loss of 
income in many States in the country.
  This chart shows that farm income has dropped in a majority of the 
States. We can see those that are over a 40-percent drop are in red. 
That is North Dakota, at 98 percent; Missouri, I think their loss is in 
the 40-percent range. You can see New York, Maryland, Virginia and West 
Virginia. These States have all suffered very dramatic income declines 
in the agricultural sector.
  In addition to that, in orange are those States that have seen a 20- 
to 39-percent reduction in farm income: Minnesota, Wisconsin, Illinois, 
Kentucky, Tennessee, Pennsylvania, Maine and Connecticut are in that 
category, as well as Washington, Nevada and Utah out West. Those that 
are in the zero to 19-percent decline: Montana, Idaho, South Dakota, 
Iowa, Arkansas, Louisiana, Mississippi, Alabama, Georgia, South 
Carolina, North Carolina, New Jersey, Rhode Island, New Hampshire and 
Vermont.
  Farmers are suffering in silence. It has not gotten a lot of 
attention, but it is nonetheless real and it is nonetheless urgent. We 
can see the change in income by major industry from 1996 to 1997. All 
of these major industries saw increases with one exception--agriculture 
saw a $3.4 billion decline. But we saw increases in mining--theirs were 
modest; in forestry and fishing, in transportation and public 
utilities, in construction, in wholesale trade, in government services, 
in retail trade, in finance, insurance and real estate, in 
manufacturing and services. Services, by the way, saw an enormous 
increase of over $100 billion as we move increasingly towards a service 
economy.

  One of the key reasons that we have seen the steep drop in North 
Dakota and some of the other States is these very unusual weather 
patterns. In Texas and Oklahoma it is drought. In North Carolina it is 
hurricanes. In North and South Dakota and Minnesota it is overly wet 
conditions.
  This is a picture of the North Dakota farm country. This picture, if 
you can see it, shows not the kind of dry landscape one would associate 
with North Dakota, but one sees water everywhere. We are swamped in 
North Dakota. When I say farm income has been washed away, that is 
exactly what has happened. Farmland can't be planted. That which has 
been planted is drowned out. That which isn't drowned out is suffering 
from a massive outbreak of disease that has cost a third of the crop 
last year, to this dreadful scab outbreak.
  I wish we could say it was restricted to scab, but in addition to 
that we have white mold, now, attacking the canola crop. That will 
affect not only our State but Minnesota, Montana, and South Dakota as 
well.
  These are an extraordinary set of circumstances with which our 
farmers are dealing, and it is forcing them off the land. We anticipate 
losing 2,000 farmers in North Dakota this year out of 30,000. The 
Secretary of Agriculture came to North Dakota 3 weeks ago and he had a 
disaster team that briefed him before the meetings. They told him, 
``You could lose 30 percent of the farmers in North Dakota in the next 
2 years''--30 percent. If that is not a disaster, I don't know what is.
  It is not just North Dakota, although we are one of the hardest hit, 
but certainly Minnesota, South Dakota, Montana, and the other States I 
mentioned, Oklahoma and Texas, all were hard hit by drought, continuing 
drought; of course Florida with their fires, North Carolina with 
hurricanes, and we saw other States affected as well.
  This is another picture of North Dakota. Again, everywhere you look--
water. I was just in the southeastern part of our State, six counties. 
I met with a young farmer there. He had planted corn twice this year. 
Both times it drowned out. For mile after mile, we saw land under 
water, land that is not going to be planted again this year, land that 
has been not planted for 2 or 3 years. In that particular farmer's 
case, he had land he hasn't been able to farm for 4 years.
  These exceptionally wet conditions in North Dakota, Minnesota, and 
parts of South Dakota are leading to perfect conditions for the 
breeding of this fungus disease--scab. That is not only reducing the 
production--as I indicated, we lost a third of the crop last year--but 
in addition to that, what you do harvest is then badly discounted when 
you go to the elevator to sell.
  It is this combination of factors that is putting such a crunch on 
North Dakota agricultural producers. Again, as I say, it is not just 
our State but other States as well. It is very much related to a 
collapse in prices, very much related to natural disasters, very much 
related, in addition to that, to what is happening abroad. The collapse 
of the Asian financial markets is reducing demand for our products. 
That is where we sell most of our agricultural production. That is the 
fastest growing market for the United States, in Asia, and they don't 
have the funds to buy. As a result, we are seeing sharp reductions, 
sharp restrictions in agricultural exports.
  This chart, I think, tells the story very well. It shows a 50-year 
pattern of spring wheat prices. These are all stated in 1997 dollars so 
we are comparing apples to apples. You can see we are about at an all-
time low at the end of 1997. You see a long-term trendline of wheat 
prices coming down, but we are now at virtually an all-time low. If you 
then look at 1998, you see the pattern continuing. By June of this 
year, we are at a 50-year low for spring wheat prices. Wheat prices in 
North Dakota are now about $3.20 a bushel. To put that in some 
perspective, it costs about $4.50 to produce wheat, so you have an 
invitation to lose money if you are planting wheat.
  Of course, the upper Great Plains are dominated by wheat production. 
It is not just wheat. We see exactly the

[[Page S8284]]

same pattern with respect to barley. Here is a 50-year trendline of 
barley prices, and you can see by the end of 1997, we were near a 50-
year low.
  If you go to this year, you can see what has happened this year--
further price collapse--so that we are at a 50-year low. Prices for 
wheat and barley have not been this low in 50 years. When you then 
couple that with reduced production because of the massive outbreak of 
disease, what you have is an income collapse--as I showed in the first 
chart--an income collapse in my home State of North Dakota.
  What does that mean? That means we are seeing record auction sales, 
as the little house on the prairie is auctioned off. That is what is 
happening in my State. It is a disaster. It is a calamity and something 
must be done.
  We can debate at great length overall farm policy. We have 
differences on the question of long-term farm policy. I don't think we 
have differences on the question of responding to an emergency, and 
that is what we have. We have an emergency. It is a dire emergency, but 
we have very little ability to respond to it.
  We did away with disaster programs for agriculture during 
consideration of the last farm bill and actually before that. We 
decided to do away with disaster programs and use crop insurance. The 
problem is, crop insurance does not work where you have multiple years 
of disaster. Even the head of the risk management agency has agreed 
with that proposition. In testimony before the Senate Agriculture 
Committee, he made very clear: Crop insurance, as currently 
constituted, does not work when you have multiple years of disaster.
  Unfortunately, all across America, we see multiple years of disaster.
  This chart shows where the losses have been most severe. As you can 
see on the chart, those areas that are in red are the parts of the 
country that have been hardest hit over the last period of time. You 
can see, yes, North Dakota and South Dakota and Minnesota hard hit, but 
we also see Oklahoma and Texas very hard hit and, of course, we go east 
and North Carolina and Virginia are very hard hit as well.
  Interestingly enough, Pennsylvania; that is because they have been 
hit by tornadoes and have repeated losses as a result. But it is not 
just those States. You can see South Carolina, Georgia, Alabama, 
Mississippi--all of those States are badly affected. Go out west and 
the State of Idaho has been hard hit. This map doesn't reveal it, but 
there are parts of Montana hard hit as well.
  This map doesn't reveal the individuals. This reveals the counties 
that are hardest hit. We also have many individuals, especially in the 
State of Montana, who have been hard hit by this same set of unusual 
conditions: Precipitous drop in prices, coupled with sharp drops in 
production because of natural disasters, weather disasters of one kind 
or another, and combined, they have led to an income collapse for many 
farmers in many parts of the country.
  The question is, How do we respond? The idea has been we wouldn't 
have disaster programs for agriculture because we are going to use crop 
insurance. The problem is crop insurance doesn't work where you have 
multiple years of disaster. Some who are viewing may ask, Why is that? 
Why wouldn't crop insurance work if you have multiple years of 
disaster. Nobody knows better than the occupant of the Chair what the 
problem is. The problem with crop insurance is it is calculated based 
on your last 5 years of production. If you have 5 years of disaster, 
your production base erodes, it evaporates, and then you don't get much 
help from crop insurance. That is the fundamental problem that we have 
identified.

  So how do you address it? What we are recommending is an indemnity 
program that will help make payments to those farmers who have had 
multiple years of disaster, who have had a sharp income decline, sharp 
losses in income so that they can get some assistance to carry over so 
that they will live to fight another day, so they can get through these 
depressed times and get on to better times.
  Mr. President, we have worked with our colleagues on both sides of 
the aisle in terms of crafting a program that we think will be of 
assistance. Before I send that amendment to the desk, we are waiting 
for an evaluation on which one of the amendments best meets the budget 
requirements that the U.S. Congress is under. We are hoping for word on 
that very soon.
  To sum up, this is a calamity. This is a disaster. This is an 
emergency. By the way, the President yesterday said he will support an 
emergency designation for an answer to what we are seeing across the 
country. The Secretary of Agriculture indicated he, too, will support 
an emergency designation, and that is critical so that we don't violate 
the budget caps.
  The chairman of the Agriculture Appropriations Committee, Senator 
Cochran, and the ranking member, Senator Bumpers, are under very sharp 
strictures with respect to what they can spend. They have allocations 
made to them. If we are going beyond that, we have to have an emergency 
designation. The President has indicated he is willing to make such a 
designation. I am hopeful that we will find the Budget Committee agrees 
as well. We are awaiting their word on that matter.
  Mr. President, these sharp drops in farm income are certainly not 
isolated. It is not just North Dakota. The State of Missouri saw a very 
sharp drop, 72 percent drop there; Maryland, 44 percent drop; New York, 
44 percent drop; West Virginia, 44 percent; Virginia, 42 percent; 
Minnesota, 38 percent; Wisconsin, the same; Nevada, 35 percent; 
Pennsylvania, a sharp drop, again, because of natural disasters with 
what is happening with tornadoes.
  We also know that producers, on this map provided by USDA, in North 
Carolina have been very, very hard hit by a set of hurricanes. Of 
course, Oklahoma and Texas is burning up with this drought, and so many 
of their producers are under extreme economic pressure as a result.
  I will enter into the Record a letter from the President. I will read 
from it before I send it to the desk. This is a letter sent to Leader 
Daschle yesterday. The President says:

       I am very concerned about the financial stress facing 
     farmers and ranchers in many regions of the country. Natural 
     disasters, combined with a downturn in crop prices and farm 
     income, expected by the Department of Agriculture to remain 
     weak for some time, cause me to question again the adequacy 
     of the safety net provided by the 1996 farm bill. In some 
     areas of the U.S., as many as five consecutive years of 
     weather and disease-related disasters have demonstrated 
     weaknesses in the risk protection available through crop 
     insurance.

  I think all of us who represent farm country certainly understand 
that. That is because of the formula. It is going to take us time to 
fix crop insurance. It is going to take a bipartisan effort to do that, 
but that takes time. Those of us who serve on the Agriculture Committee 
understand the complexities of reforming crop insurance. That is not 
going to happen this year. That is not going to be done in time to help 
these people who have been hit by repeated years of disaster and for 
whom the crop insurance system does not work. What we are saying 
together is we ought to move and fill in the difference, provide some 
assistance while we are waiting for crop insurance to be fixed.
  The President said:

       Therefore, I am instructing the Secretary of Agriculture to 
     redouble his efforts to augment the current crop insurance 
     program to more adequately meet farmers' needs to protect 
     against farm income losses. In the interim, to respond to the 
     current unusual situations, I urge the Congress to take 
     emergency action to address specific stresses now afflicting 
     sectors of the farm economy.

  He goes on to say:

       I agree with the intent of Senator Conrad's amendment and 
     recommend that funding to address these problems be 
     designated as emergency spending. A supplemental crop 
     insurance program for farmers who experience repeated crop 
     losses, a compensation program for farmers and ranchers whose 
     productive land continues to be under water, and extended 
     authority for the livestock disaster program are examples of 
     the type of emergency actions that could help farmers and 
     ranchers.
  Well, amen to that. I certainly thank the President for recognizing 
the extraordinary economic stress our farmers and ranchers are under.
  The President concludes by saying:

       I am confident that you and your colleagues share my 
     concern for American farmers and ranchers who are 
     experiencing financial stress from natural disasters and low 
     prices, exacerbated by the global downturn in agricultural 
     trade, and I encourage

[[Page S8285]]

     the Congress to take emergency action quickly.

  Mr. President, I ask unanimous consent that the letter from the 
President be printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                              The White House,

                                        Washington, July 15, 1998.
     Hon. Thomas A. Daschle,
     Minority Leader, U.S. Senate,
     Washington, DC.
       Dear Mr. Leader: I am very concerned about the financial 
     stress facing farmers and ranchers in many regions of the 
     country. Natural disasters, combined with a downturn in crop 
     prices and farm income, expected by the Department of 
     Agriculture (USDA) to remain weak for some time, cause me to 
     question again the adequacy of the safety net provided by the 
     1996 farm bill. In some areas of the U.S., as many as five 
     consecutive years of weather and disease-related disasters 
     have demonstrated weaknesses in the risk protection available 
     through crop insurance.
       During the debate on the 1996 farm bill, I encouraged 
     Congress to maintain a sufficient farm safety net, and since 
     its enactment my Administration has repeated that call, 
     proposing measures to buttress the safety net that are 
     consistent with the market-oriented policy of the 1996 farm 
     bill. The 1994 Crop Insurance Reform Act established a policy 
     of improving the crop insurance program in order to remove 
     the need for ad hoc disaster payments. This commitment to 
     crop insurance as the preferred means of managing crop loss 
     risks was reaffirmed in the 1996 farm bill. Farmers have 
     responded to this policy by maintaining their enrollment in 
     crop insurance at very high levels, especially in the 
     Northern Plains states.
       Therefore, I am instructing the Secretary of Agriculture to 
     redouble his efforts to augment the current crop insurance 
     program to more adequately meet farmers' needs to protect 
     against farm income losses. In the interim, to respond to the 
     current unusual situations, I urge the Congress to take 
     emergency action to address specific stresses now afflicting 
     sectors of the farm economy.
       I agree with the intent of Senator Conrad's amendment and 
     recommend that funding to address these problems be 
     designated as emergency spending. A supplemental crop 
     insurance program for farmers who experience repeated crop 
     losses, a compensation program for farmers and ranchers whose 
     productive land continues to be under water, and extended 
     authority for the livestock disaster program are examples of 
     the type of emergency actions that could help farmers and 
     ranchers.
       It is also crucial that the Congress provide the level of 
     funding proposed in my FY 1999 budget in the regular 
     appropriations bills and that the Congress pass the full IMF 
     package to support the efforts of American farmers.
       I am confident that you and your colleagues share my 
     concern for American farmers and ranchers who are 
     experiencing financial stress from natural disasters and low 
     prices, exacerbated by the global downturn in agricultural 
     trade, and I encourage the Congress to take emergency action 
     quickly.
           Sincerely,
                                                     Bill Clinton.

  Mr. CONRAD. Mr. President, I say to my colleagues, I will relinquish 
the floor at this point and await the word from the Budget Committee. 
We are expecting it momentarily. So I relinquish the floor and suggest 
the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  Mr. COCHRAN. Will the Senator withhold the request?
  Mr. CONRAD. I am happy to.
  Mr. COCHRAN. I say to the distinguished Senator from North Dakota, I 
appreciate very much his going forward and offering this amendment. We 
have been discussing the amendment and the problems that he identifies 
as emergency problems because of drought and other problems throughout 
the agricultural sector. We are very sympathetic to these problems and 
the need for Congress and the President and the Department of 
Agriculture to act in a positive way and in an effective way to address 
these problems and to try to help solve them.
  We have been advised there may be a problem with the Budget Act in 
getting an amendment, as drafted, approved in the Senate without having 
the amendment subject to a budget point of order. We have discussed 
this with the chairman of the Budget Committee. And there are other 
Senators with whom we have discussed the problem as well.
  There is a lot of concern on both sides of the aisle that we have a 
bill for agriculture appropriations that takes into account all of the 
problems we have in the country, and that we respond in a thoughtful 
way. We are continuing to work on this issue. I want Senators to know 
that I hope we get it resolved so we can approve an amendment of some 
kind to provide relief, such as that sought in the amendment of Senator 
Conrad.
  But while we await further negotiations on this subject, I agree with 
the Senator that we probably should suggest the absence of a quorum. 
Some Senators are away from the Capitol right now who want to be 
involved in this discussion. I expect we will be able to make progress 
on it in the early part of the afternoon.
  If there are other amendments that can be offered by Senators, we 
would encourage Senators to come to the floor to offer those 
amendments. We could set aside this amendment for that purpose to 
receive other amendments. And some of them may be agreeable. We are 
willing to work with all Senators. We appreciate the assistance we have 
had from many today indicating a willingness to reach agreement on 
proposed changes to the bill. I am hopeful we can complete action on 
the bill today, and I pledge to Senators that I will work very hard to 
try to help make that a reality.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Hagel). The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. GRAMM. 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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