[Congressional Record Volume 145, Number 51 (Wednesday, April 14, 1999)]
[Senate]
[Pages S3709-S3710]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SANTORUM (for himself, Mr. Chafee, Mr. Gregg, Mr. 
        Feingold, Mr. DeWine, Mr. Brownback, Mr. Specter, and Ms. 
        Collins):
  S. 802. A bill to provide for a gradual reduction in the loan rate 
for peanuts, to repeal peanut quotas for the 2002 and subsequent crops, 
and to require the Secretary of Agriculture to purchase peanuts and 
peanut products for nutrition programs only at the world market price; 
to the Committee on Agriculture, Nutrition, and Forestry.


                  Reform of The Federal Peanut Program

  Mr. SANTORUM. Mr. President, I rise today to introduce a bill that 
would bring common sense reform to the federal peanut commodity 
program. This legislation would phase out the peanut quota program over 
three years, with the quota being eliminated in crop year 2002. I am 
joined today by several colleagues in this reform effort.
  Under this legislation, the price support for peanuts that are grown 
for edible consumption is gradually reduced each year from the current 
support price of $610 per ton to $500 per ton by 2001. In the year 2002 
and ensuing crop years, there would be no quotas on peanuts, and the 
Secretary of Agriculture would be required to make the non-recourse 
loan available to all peanut farmers at 85 percent of their estimated 
market value. This measure is consistent with the non-recourse loan 
programs available for other agriculture commodities.
  Another component of this peanut reform bill would allow additional 
peanuts, those produced in excess of the farmer's quota poundage, to be 
used for sale to the school lunch program.
  Mr. President, the federal peanut program, born in the 1930's during 
an era of massive change and dislocation in agriculture, is sorely out 
of place in today's agricultural sector. Other farm commodities are 
seeking new export opportunities abroad, building new markets and 
helping to improve our national balance of trade, however, the peanut 
industry is building new barriers to protect itself. The quota system 
stifles freedom for farmers, and it fosters a set of economic 
expectations that cannot be sustained without continued government 
intervention. Moreover, failure to reform this program costs consumers 
between $300-500 million annually, adding to the cost of feeding 
programs for low-income Americans.
  In short, this program must be changed. As we have learned from 
changes made to other commodity programs, reform does not happen 
overnight. This proposal provides for a fair transition that will 
enable farmers and lenders to adjust their expectations to the 
marketplace. Following completion of the phase-out period, the peanut 
program will operate like most other agricultural commodities.
  Mr. President, I am pleased to have many of my Senate colleagues join 
me today as cosponsors of this measure, including Senators Chafee, 
DeWine, Feingold, Gregg, Brownback, Specter, and Collins.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 802

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. REDUCTION IN LOAN RATES FOR PEANUTS.

       Section 155(a) of the Agricultural Market Transition Act (7 
     U.S.C. 7271(a)) is amended by striking paragraph (2) and 
     inserting the following:
       ``(2) Loan rate.--The national average quota loan rate for 
     quota peanuts shall be as follows:
       ``(A) $610 per ton for the 1999 crop.
       ``(B) $550 per ton for the 2000 crop.
       ``(C) $500 per ton for the 2001 crop.''.

     SEC. 2. NONRECOURSE LOANS FOR 2002 AND SUBSEQUENT CROPS OF 
                   PEANUTS.

       Effective beginning with the 2002 crop of peanuts, section 
     155 of the Agricultural Market Transition Act (7 U.S.C. 7271) 
     is amended to read as follows:

     ``SEC. 155. PEANUT PROGRAM.

       ``(a) In General.--
       ``(1) Loans.--The Secretary shall make nonrecourse loans 
     available to producers of peanuts for each of the 2002 and 
     subsequent crops of peanuts.
       ``(2) Rate.--In carrying out paragraph (1), the Secretary 
     shall offer to all peanut producers nonrecourse loans at a 
     level not less than 85 percent of the simple average price

[[Page S3710]]

     received by producers for peanuts, as determined by the 
     Secretary, during the marketing year for each of the 
     immediately preceding 5 crops of peanuts, excluding the year 
     in which the average price was the highest and the year in 
     which the average price was the lowest during the period, but 
     not more than $350 per ton. The loans shall be administered 
     at no net cost to the Commodity Credit Corporation.
       ``(3) Inspection, handling, or storage.--The levels of 
     support determined under paragraph (2) shall not be reduced 
     by any deduction for inspection, handling, or storage.
       ``(4) Marketing of peanuts owned or controlled by the 
     commodity credit corporation.--Any peanuts owned or 
     controlled by the Commodity Credit Corporation may be made 
     available for domestic edible use, in accordance with 
     regulations issued by the Secretary, so long as doing so 
     results in no net cost to the Commodity Credit Corporation.
       ``(5) Location and other factors.--The Secretary may make 
     adjustments for the location of peanuts and such other 
     factors as are authorized by section 403.
       ``(6) Announcement.--The Secretary shall announce the level 
     of support for each crop of peanuts not later than the 
     February 15 preceding the marketing year for which the level 
     of support is being determined.
       ``(b) Commodity Credit Corporation.--The Secretary shall 
     carry out the program authorized by this section through the 
     Commodity Credit Corporation.
       ``(c) Crops.--This section shall be effective for each of 
     the 2002 and subsequent crops of peanuts.''.

     SEC. 3. ELIMINATION OF PEANUT QUOTAS FOR 2002 AND SUBSEQUENT 
                   CROPS OF PEANUTS.

       (a) In General.--Part VI of subtitle B of title III of the 
     Agricultural Adjustment Act of 1938 (7 U.S.C. 1357 et seq.) 
     is repealed.
       (b) Conforming Amendments.--
       (1) Definitions.--Section 301(b) of the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1301(b)) is amended--
       (A) in paragraph (3)(A), by striking ``corn, rice, and 
     peanuts'' and inserting ``corn and rice'';
       (B) in paragraph (6), by striking subparagraph (C);
       (C) in paragraph (10)(A)--
       (i) by striking ``wheat, and peanuts'' and inserting ``and 
     wheat''; and
       (ii) by striking ``; 20 per centum in the case of wheat; 
     and 15 per centum in the case of peanuts'' and inserting ``; 
     and 20 percent in the case of wheat'';
       (D) in paragraph (13)--
       (i) by striking subparagraphs (B) and (C); and
       (ii) in subparagraph (G), by striking ``or peanuts'' both 
     places it appears; and
       (E) in paragraph (16)(A), by striking ``rice, and peanuts'' 
     and inserting ``and rice''.
       (2) Administrative provisions.--Section 361 of the 
     Agricultural Adjustment Act of 1938 (7 U.S.C. 1361) is 
     amended by striking ``peanuts,''.
       (3) Adjustment of quotas.--Section 371 of the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1371) is amended--
       (A) in the first sentence of subsection (a), by striking 
     ``peanuts,''; and
       (B) in the first sentence of subsection (b), by striking 
     ``peanuts''.
       (4) Reports and records.--Section 373 of the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1373) is amended--
       (A) in subsection (a), by striking the first sentence and 
     inserting the following new sentence: ``This subsection shall 
     apply to warehousemen, processors, and common carriers of 
     corn, wheat, cotton, rice, or tobacco, and all ginners of 
     cotton, all persons engaged in the business of purchasing 
     corn, wheat, cotton, rice, or tobacco from producers, and all 
     persons engaged in the business of redrying, prizing, or 
     stemming tobacco for producers.''; and
       (B) in subsection (b), by striking ``peanuts,''.
       (5) Regulations.--Section 375(a) of the Agricultural 
     Adjustment Act of 1938 (7 U.S.C. 1375(a)) is amended by 
     striking ``peanuts,''.
       (6) Eminent domain.--The first sentence of section 378(c) 
     of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1378(c)) 
     is amended by striking ``cotton, tobacco, and peanuts,'' and 
     inserting ``cotton and tobacco,''.
       (c) Liability.--A provision of this section or an amendment 
     made by this section shall not affect the liability of any 
     person under any provision of law as in effect before the 
     application of the provision of this section or the amendment 
     in accordance with this section.
       (d) Application.--This section and the amendments made by 
     this section shall apply beginning with the 2002 crop of 
     peanuts.

     SEC. 4. PURCHASE OF PEANUTS FOR NUTRITION PROGRAMS.

       Section 14 of the National School Lunch Act (42 U.S.C. 
     1762a) is amended by adding at the end the following:
       ``(h) Purchase of Peanuts for Nutrition Programs.--
       ``(1) Definitions.--In this subsection--
       ``(A) Additional peanuts.--The term `additional peanuts' 
     has the meaning given the term in section 358-1(e) of the 
     Agricultural Adjustment Act of 1938 (7 U.S.C. 1358-1(e)).
       ``(B) Covered program.--The term `covered program' means--
       ``(i) a program established under this Act;
       ``(ii) a program established under the Child Nutrition Act 
     of 1966 (42 U.S.C. 1771 et seq.);
       ``(iii) the emergency food assistance program established 
     under the Emergency Food Assistance Act of 1983 (7 U.S.C. 
     7501 et seq.);
       ``(iv) the food distribution program on Indian reservations 
     established under section 4(b) of the Food Stamp Act of 1977 
     (7 U.S.C. 2013(b));
       ``(v) the commodity distribution program established under 
     section 4 of the Agriculture and Consumer Protection Act of 
     1973 (Public Law 93-86; 7 U.S.C. 612c note);
       ``(vi) the commodity supplemental food program established 
     under section 5 of the Agriculture and Consumer Protection 
     Act of 1973 (Public Law 93-86; 7 U.S.C. 612c note); and
       ``(vii) a nutrition program carried out under part C of 
     title III of the Older Americans Act of 1965 (42 U.S.C. 3030e 
     et seq.).
       ``(2) Purchases.--Notwithstanding any other provision of 
     law, in purchasing peanuts or peanut products to carry out a 
     covered program, the Secretary shall--
       ``(A) purchase the peanuts or peanut products at a price 
     that is not more than the prevailing world market price for 
     peanuts or peanut products produced in the United States, as 
     determined by the Secretary; and
       ``(B) in the case of peanut purchases, purchase only 
     additional peanuts.
       ``(3) Domestic edible use.--Notwithstanding any other 
     provision of law, additional peanuts purchased by the 
     Secretary to carry out a covered program shall not be 
     considered to be peanuts for domestic edible use under the 
     Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 et seq.) 
     or Agricultural Market Transition Act (7 U.S.C. 7201 et 
     seq.).
       ``(4) Supply.--The Secretary shall take such actions as are 
     necessary to ensure, to the maximum extent practicable, that 
     an adequate supply of additional peanuts is available to 
     carry out covered programs.
       ``(5) Penalties.--Notwithstanding any other provision of 
     law, a person that produces additional peanuts that are sold 
     to the Secretary, or sells additional peanuts to the 
     Secretary, for a covered program shall not be subject to a 
     penalty or other sanction for the production or sale of the 
     additional peanuts.''.
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