[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
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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
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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.
____________________