[Congressional Record Volume 145, Number 53 (Monday, April 19, 1999)]
[Senate]
[Pages S3830-S3831]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FAMILY FARMERS
Mr. DORGAN. Mr. President, I want to talk just for a moment about
agriculture and the challenge facing agriculture.
On Saturday, I was in an airplane and opened up a newspaper to an
interesting article. I have spoken about agriculture and family farmers
during the past weeks. I have talked about what is happening in our
part of the country with the depopulation of middle America, rural
communities drying up--shriveling like prunes, people moving out--not
moving in, Main Street businesses boarding up, family farmers going
broke, and nobody seemingly caring very much.
The business section of the Minneapolis Tribune had two fascinating
stories on the front page. They respond in a kind of perverse way to
what is happening, both in this Chamber and also around the country
with respect to the policy dealing with family farmers.
The first article: ``Cargill Profits from Decline in Farm Prices; 53
percent jump in earnings expected.'' Cargill is a large company and has
always done quite well, I believe. It is a privately held company. It
purchases agricultural products and is involved in a wide range of
activities adding value to agricultural products.
``Cargill Profits from Decline in Farm Prices.'' Is that unusual? No.
Big agribusinesses all too often are profiting from the misery of
America's family farmers. Family farmers on the one side go broke;
while Cargill sees a 53 percent jump in earnings. Cargill,
incidentally, wants now to marry up with Continental Grain. Cargill and
Continental want to get married, merge, and become bigger, with more
market power.
In the question of market power, it is reasonable to ask, who wins
and who loses? Family farmers all too often lose, and those with the
most market power win. ``Cargill Profits from the Decline in Farm
Prices.'' You could wipe out the name ``Cargill'' and include any
number of agribusinesses. I am not picking on Cargill; they just
happened to be in this paper on Saturday.
Let's go to the article on the bottom of the front page. Family
farmers are going broke because commodity prices have collapsed. The
price of wheat has collapsed. The article states, ``General Mills to
boost cereal prices 2.5 percent'':
General Mills, Inc., the maker of Cheerios, Wheaties and
Lucky Charms, is raising cereal prices an average of 2.5
percent.
One might ask the question, in terms of public policy, What is going
on in this country when the folks who gas up the tractor in the spring,
borrow money to buy seed, fertilizer, plant the crop, harvest the
wheat, sell it in the market, and then go broke because they are told
that the wheat they produced from their fields has no value? But the
people who buy that wheat and turn it into Cheerios or Wheaties or
Lucky Charms, even though the prices of commodities have collapsed and
they are paying the farmer less--in fact, so little that family farmers
are going broke in record numbers--they say they need to boost cereal
prices that people pay at the grocery store.
I woke up this morning and I ate a bowl of cereal. I will not
advertise which cereal it was, but I ate a bowl of cereal. I looked at
the box, after I had seen this in the paper on Saturday, and I read the
label about what is in this
[[Page S3831]]
cereal I am eating. I will tell you what is in the cereal--grain.
So this company buys it from farmers, pays them a pittance, and then
they puff it or crisp it or shred it. Once they have it all puffed and
labeled as Puffed Wheat or Shredded Wheat, the process is all done.
They have added the air to the grain or they have shredded it with a
knife, then they put it on the grocery store shelf and charge a fortune
for it.
Buy a box of cereal at the grocery store and ask yourself whether you
like that price. Now, they say it is not enough. While farmers are
going broke, they say they need to boost cereal prices. Talk about a
disconnection and evidence that the market system does not work in
agriculture. There must surely be a golden rule here, the one that
says--those who have the gold make the rules--there must be a golden
rule here that says cereal manufacturers can increase prices with
impunity while family farmers go broke because they are selling their
grain at the elevator and are told that their food has no value.
I mentioned last week an auction sale by a farm wife in North Dakota.
She wrote a letter and said they were forced to sell out. She said her
17-year-old son would not even come down, he stayed in bed during the
day of the auction sale and refused to come down to witness the auction
sale of this farm because he was heartbroken. It was breaking his
heart. It was breaking his heart that they were having to sell their
farm. He wanted to farm.
This is all about human misery, failure--and it is not their fault.
It is not the family farmers' fault that commodity prices have
collapsed at the same time we have a hungry world. Hundreds of millions
of people go to bed with an ache in their belly every night because
they do not have enough to eat, while our farmers are told their
product has no value. And when companies take the farmers product and
turn it into cereal by puffing it, then they send it to the grocery
store, they say it not only has value, in fact, they are announcing a
price increase. Yet, they have received record profits and now want to
increase cereal prices.
I want to put up a chart that shows the average annual return on
equity for the major cereal manufacturers, 1993 to 1997: 29 percent, 24
percent, 25 percent, 22 percent.
Our family farmers are going broke raising the products that go into
these cereals; and the largest corporations that make cereal are making
very substantial returns on their equity. There is something wrong with
that economic system. Some say, ``Well, that's just the way it works.
The big get bigger and the small get phased out.'' If this country
decides it is worth losing family farmers, it will have lost something
of great value to our country.
Some in this Chamber think having only giant agrifactories around in
the future is fine. They will buy up farms from coast to coast. Only
having large farms in America is not fine with me. This country will
have taken a giant step backwards, unless we fundamentally change the
farm law this year and provide a decent safety net for family farmers.
We do it for another segment in our economy. We provide a safety net
for workers with a minimum wage.
Family farmers were told, under the current farm bill--about 3 years
ago--``We're going to pull the safety net out from under you.'' And
then, of course, prices collapsed, and the result is family farmers
have no effective safety net.
I just say that when you look at what is going on in the business
page of the newspaper, ``Cargill profits from decline in farm prices''
and ``General Mills to boost cereal prices''--I do not mean to single
out these two companies, they are doing what economic clout and power
allows them to do--but it is unfair to family farmers.
We have asked for substantial investigations by the Justice
Department about the concentration of economic power and what it is
doing to the family-sized farm. I hope the Justice Department will
move, and move aggressively, on these issues. But more importantly,
this Congress needs to decide, in the next few weeks, whether it wants
family farmers left in this country. And if it does, we have to do a U-
turn on farm policy and reconnect a decent safety net for family-sized
farms.
I know what some people say, ``Well, all this is wonderful, but it's
boring and it's not very important.'' It is critically important to
families out there struggling to make a living.
Will Rogers said, many years ago, ``You know, if on one day all the
lawyers on Wall Street failed to show up for lunch, it wouldn't mean a
thing for this country. But if one day all the cows in our country
failed to show up to be milked, that would be a problem.'' What he was
trying to describe was a difference between those who move paper around
in America and those who produce real products on the farm, that are of
real value and contribute to feeding our country. That admonition by
Will Rogers is just as important today.
I hope the Justice Department will take a look at the Cargill-
Continental merger with a critical eye, to say, why do we need
corporations in this system, already too large, to get bigger? Why do
we need them to impose their economic will on small producers? Why do
we need to give them more economic clout to do that?
I hope the Justice Department will look at market concentration in
meat packing and in a whole range of other areas, because those are the
kinds of things that are undermining the foundation of America's family
farms.
A number of us will speak at greater length on these issue in the
coming days, because we must convince this Congress that we have a
responsibility to develop a farm program that works, one that tells
family farmers: ``You matter to our future. And we want you to be able
to make a decent living if you work hard on the family farm.''
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