[Congressional Record Volume 145, Number 106 (Monday, July 26, 1999)]
[Senate]
[Pages S9230-S9233]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CONRAD:
  S. 1436. A bill to amend the Agricultural Marketing Transition Act to 
provide support for United State agricultural producers that is equal 
to the support provided agricultural producers by the European Union, 
and for other purposes; to the Committee on Agriculture, Nutrition, and 
Forestry.


           amending the agricultural marketing transition act

  Mr. CONRAD. Mr. President, I rise to introduce new, permanent farm 
legislation. I think virtually everyone from farm country understands 
that our farmers have been hit by a triple whammy--the triple whammy of 
bad prices, bad weather, and bad policy. The results are catastrophic.
  In my home State of North Dakota, one of the most agricultural States 
in the Nation, our farmers are being pressured as never before. They 
are in a cost price squeeze that is almost unprecedented. The results 
will be the loss of thousands of farm families unless there is a 
Federal response.
  I think most of us know we need to have a disaster response because 
prices have collapsed, and adverse weather conditions continue across 
the country. So it is critically important that we take short-term 
steps to address what is happening in farm country.
  A disaster bill is not enough. We need more than that. We also need 
to respond with a long-term change in farm policy.
  If I could direct the attention of my colleagues and others who might 
be watching to this chart, when I talk about the triple whammy of bad 
prices, bad weather, and bad policy, this shows what has happened to 
prices over the last 53 years. The blue line shows what has happened to 
wheat prices; the red line to barley. As a viewer can see, we are now 
at the lowest level for these commodities in constant dollars in 53 
years.
  We are witnessing a price collapse that is almost unprecedented. That 
is putting enormous pressure on our producers.
  In addition to that, in my State we have been hit by almost a 5-year 
pattern now of bad weather--weather that is overly wet in my State; 
other parts of the country it is overly dry. In North Dakota, we have 3 
million acres that have not even been planted this year. On top of bad 
prices and bad weather, we are also hit by bad policy because the last 
farm bill put us at a very severe disadvantage with our major 
competitors, the Europeans.
  The EU trumps the U.S. in farm support. This chart shows just with 
respect to wheat and corn for 1999--the red bar is what the Europeans 
provide their producers on wheat; the blue bar what we are doing in the 
United States. You can see, they are trumping us by 38 percent. In 
other words, their support is 38 percent higher in wheat, 46 percent 
higher in corn.
  It does not end there because the Europeans are also badly 
outspending us with respect to export subsidy. This shows for 1998--the 
last year for which we have full figures--this is the European Union in 
red: $5 billion a year of support for subsidies. This is the United 
States: $104 million.
  For that 1 year alone, the Europeans are outspending us, are 
outgunning us, 50 to 1. It is no wonder that our farmers are at a 
disadvantage. We, in effect, are saying to our farmers: You go out 
there and compete against the French farmer, the German farmer; and 
while you're at it, you take on the French Government and the German 
Government, as well.
  That is not a fair fight.
  If we look worldwide at agricultural export subsidies, what we see is 
that the European Union accounts for 84 percent of agriculture 
subsidies worldwide. The United States has 1.4 percent. We are 
outgunned 60 to 1 by that measure.
  Whether it is 50 to 1 or 60 to 1, the hard reality is, the U.S. 
producers are not in a fair fight. Something must be done to respond.
  If we look back at the policy change that was made in the farm bill--
our last farm bill--what we see is there was a dramatic cut in the 
level of support for our producers.
  Under the previous farm bill, the 1990 farm bill, we were getting on 
average $10 billion a year of support for our farmers. That was cut in 
half to $5 billion--that at the very time our major competitors are 
spending $50 billion a year to support their producers. So $50 billion 
for Europe; $5 billion for the United States.
  It is not a fair fight. The result is, our farmers are losing the 
battle. I call this ``unilateral disarmament.'' We would never do that 
in a military confrontation. Why have we done it in a trade 
confrontation? The results are the same: They win; we lose. The chief 
negotiator for the Europeans told me several years ago: Senator, we 
believe we are in a trade war in agriculture with the United States. He 
said: Senator, we believe at some point there will be a cease-fire. We 
believe there will be a cease-fire in place, and we want to occupy the 
high ground. And the high ground is market share.

  How well that strategy and plan are working, because the Europeans, 
in just the last few years, have moved from being major importers to 
being major exporters. They have gone from being the biggest importing 
region in the world to being the biggest exporting region in the world, 
and they have done it the old-fashioned way--they have gone out and 
bought these markets.
  In the last 10 years alone, they have spent $500 billion, and now 
they are starting to get a return on that investment, because in the 
last trade negotiation, what happened? Europeans have a higher level of 
support than we do. They are at a higher level. We are at a lower 
level. Was there a closing of the gap? Not at all. Instead, the 
conclusion was equal percentage reductions on both sides--36 percent in 
export subsidies, 24 percent in domestic support. The result is that 
our farmers were again left in a second position.
  If it happens again in the trade talks that are to begin this fall, 
our farmers will be put in a position of perhaps falling off the cliff, 
being put in a position that they cannot possibly survive.
  Some say let's let the market work. I am all for letting the market 
work. But that is not what is happening in world agriculture. What is 
happening in world agriculture is, the Europeans are spending enormous 
sums of money

[[Page S9231]]

to win a dominant position. They believe that is a position they can 
preserve because they think the United States is unwilling to fight 
back.
  We have to prove them wrong. We have to demonstrate that the United 
States is not going to roll over, is not going to surrender, is not 
going to give up, that we intend to fight for these markets to achieve 
a level playing field so our farmers have a chance to compete. Our 
farmers can compete against anyone anywhere, but they can't compete 
against the governments of the European Union. That is not a fair 
fight.
  We can see the pattern because while we have cut support for our 
producers and the Europeans have had a 50- to 60-to-1 edge on us with 
respect to export subsidy, the value of our farm exports has dropped 
like a rock. We have gone from $60 billion a year as recently as 1996 
to, this last year, $49 billion. At the same time, if we look at the 
European pattern, we see they have gone from being a major importer to 
a major exporter. They have a strategy; they have a plan. It is 
working. If we don't fight back, we are going to wake up after this 
next round of negotiations and we are going to find that the United 
States is falling off the cliff. We are going to find literally 
thousands of our farm families consigned to failure. That is the 
message I have received in farm meeting after farm meeting all across 
my State.
  I asked our Trade Representative: What is our leverage in the next 
round of trade talks? The truth is, we have no leverage because the 
Europeans are occupying the high ground. They are waiting for the 
cease-fire, the cease-fire in place. They are waiting to win this 
victory. They are confident the United States will not fight back. We 
have to prove them wrong. We have to demonstrate that the United States 
is not willing to cede these markets.

  This chart shows what has happened to just one commodity, wheat. This 
blue line is European exports; the red line is American exports. You 
can see the trend line for the United States is down, down, down--lots 
of zigzags along the way, but the trend line is straight down; the 
European trend line, straight up. They have had a little setback 
recently, but you can see they have gone from being in a totally 
inferior position, a more than two-to-one gap between us to our 
advantage, to their now being in the dominant position, and they have 
accomplished this in less than 20 years.
  That is what my FITE legislation is all about. It says: Let's fight 
back. Let's send a message the United States is not going to wave the 
white flag of surrender. The United States intends to fight for these 
markets. The United States intends to give our farmers a fair chance to 
compete. That is what this legislation does.
  These charts show it. FITE levels the playing field for wheat. Under 
our proposal, as I described before, Europe is at $5.20 in wheat, we 
are at $3.22. We would level the playing field. If they are going to 
provide $5.20, we will provide $5.20. We do the same thing on corn. We 
even the score on corn. They are at $4.85 today. We are at $2.25 a 
bushel on corn. If they want to stay at $4.85, we will match them; we 
will meet them in the competition. We will take them on head to head, 
dollar for dollar, so we don't surrender these markets and find 
ourselves in an inferior position.
  Not only do we even the score with respect to support to producers, 
we even the score with respect to export subsidy, because in the FITE 
bill we provide $4 billion a year of support for export subsidy, 
because we believe that will send a message to the Europeans that the 
United States intends to fight. This would put us in a strong position 
for the talks this fall because right now we have no leverage.
  The question is, How do we respond?
  I have a series of letters from groups endorsing the FITE 
legislation. I ask unanimous consent to have them printed in the Record 
at this point.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

                                       North Dakota Association of


                                  Rural Electric Cooperatives,

                                        Mandan, ND, July 26, 1999.
     Senator Kent Conrad,
     Hart Office Building, Washington, DC.
       Senator Conrad: As president of the North Dakota 
     Association of Rural Electric Cooperatives, I want to commend 
     you for bringing forth your ``FITE'' proposal in response to 
     the current farm crisis.
       In our program, we know this ag crisis is real. We deal, 
     every month, with the stranded assets of people leaving the 
     land--giving up the dream of making their living and raising 
     their families on the land.
       Your Farm Income and Trade Equity Act is a thoughtful, fair 
     and solid response to the crisis. You've correctly identified 
     in this proposal that unfair trade subsidies and rock-bottom 
     commodity prices are at the root of this crisis. Your FITE 
     proposal provides a solution to this problem.
       You can count on North Dakota's RECs to help get this 
     legislation through the Congress and on the President's desk 
     for his signature. We need action, and this FITE proposal 
     makes a great deal of sense to us. We'll help however we can.
           Sincerely,
                                                Adolph Feyereisen,
     President.
                                  ____

                                                      North Dakota


                                National Farmers Organization,

                                        Marion, ND, July 21, 1999.
     Senator Kent Conrad,
     U.S. Senate, Washington, DC.
       Dear Senator Conrad: The North Dakota National Farmers 
     Organization is happy to endorse your introduction of FITE 
     (Farm Income and Trade Equity Act of 1999).
       I must also add that on behalf of NDNFO members, we 
     appreciate your efforts to help correct the severe income 
     problems we are experiencing in rural America and 
     particularly in North Dakota.
           Good luck and thanks,
                                                    Ralph Danuser,
     President.
                                  ____



                                     U.S. Durum Growers Assn.,

                                                    July 23, 1999.
     Senator Kent Conrad,
     Hart Senate Office Building,
     Washington, DC.
       Senator Conrad: The US Durum Growers Association would like 
     to congratulate and thank you for introducing the Farm Income 
     and Trade Equity Fairness Investment Transition Act farm 
     package. Your work in developing a comprehensive farm program 
     that would finally put US producers on equal footing with 
     European farmers is to be complimented.
       As you know, commodity prices are extremely low. That is 
     particularly true of durum, which is substantially lower than 
     the average prices of recent years. The low farm prices have 
     pushed the northern plains economy, which is very dependent 
     on durum production, into a near depression-like state. The 
     support levels that you are proposing in the FITE legislation 
     would enhance durum farmers' profitability and in turn, 
     contribute to the revitalization of the rural economy.
       The USDGA has a long standing policy in support of 
     increasing marketing loans and we are pleased that your farm 
     program proposal offers that as a base of support. The 
     additional payment over the loan rate to equalize the 
     subsidies received by US and European producers helps ensure 
     a competitive environment in the world trade of durum.
       The FITE is the only proposal to date that puts US 
     producers at a competitive position with the farmers in the 
     European Union. The support offered by this bill will provide 
     the US with negotiating power needed in this fall's WTO 
     talks.
       Thank you for your work in formulating and introducing the 
     bill, the US Durum Growers Association pledges to work with 
     you to gain acceptance for this bill in Congress.
           Sincerely,
                                                    Mark Birdsall,
     President.
                                  ____

                                        Milk Producers Association


                                        of North Dakota, Inc.,

                                       Manning, ND, July 22, 1999.
     Senator Kent Conrad.
       Dear Senator Conrad: We the Milk Producers Association of 
     N.D. support your effort to make positive changes in Congress 
     to help our Nations family farmers. Although this bill does 
     not intend to help the Dairy Industry directly, we believe 
     that indirectly it will benefit us by strengthening our 
     family farm economy.
       Needless to say, time is running out for many of our family 
     farmers and we urge you to work hard in the next few months 
     to get this bill passed through Congress.
           Sincerely,
     Doug Dukart.
                                  ____

                                                American Renewable


                                              Oil Association,

                                      Bismarck, ND, July 23, 1999.
     Senator Kent Conrad,
     Hart Senate Office Building,
     Washington, DC.
       Dear Senator Conrad: The American Renewable Oil Association 
     (AROA), represents North Dakota's 350 plus crambe growers. 
     The AROA appreciates the efforts you have made to try and 
     address the inequities in the US farm program. We support 
     farmer assistance equal to that of other countries.
       In order for the American producer to survive in the global 
     market, producers must be on an equal playing field with all 
     trading partners. The `FITE' bill addresses these inequities. 
     The AROA has not been able to schedule a board meeting to 
     take an official stance on the bill. I do see a potential 
     problem with base acres and land diversion.

[[Page S9232]]

       Please forward me a full draft when possible so I may 
     review it with the full AROA board. I look forward to working 
     with you on this bill.
           Sincerely,
                                                       Ray Fegley,
     President.
                                  ____

                                                      North Dakota


                                          Bankers Association,

                                      Bismarck, ND, July 23, 1999.
     Hon. Kent Conrad,
     U.S. Senate, Hart Senate Office Building, Washington, DC.
       Dear Senator Conrad: On Thursday I surveyed the NDBA Board 
     of Directors and Ag Committee to determine their level of 
     support for the Farm Income and Trade Equity Act (FITE) to be 
     introduced on Monday.
       I received 16 responses and all indicated that NDBA should 
     endorse the concept embodied in the legislation and support 
     your efforts on this issue. Kirby Josephson, chairman of the 
     NDBA Ag Committee from Litchville, ND, stated that ``ag 
     lenders in North Dakota will support your efforts to improve 
     farm income. It is time we do something to address the ag 
     crisis our North Dakota farmers are facing. Senator Conrad is 
     taking a bold approach to restoring farm income.''
       Respondents indicated that they believe the Export 
     Enhancement Program has been under utilized. However, some 
     concerns were expressed with the 10 percent conservation set 
     aside and the fact that this legislation may encourage 
     overproduction and discourage crop diversification.
       Please keep NDBA advised of your efforts and the status of 
     this legislation and please feel free to call if you need any 
     further clarification on the position taken by the North 
     Dakota Bankers Association.
           Cordially,
                                               James D. Schlosser,
     Executive Vice President.
                                  ____


Central Power Electric Cooperative Board of Directors Resolution #1999-
                                   06


                farm income and trade equity act of 1999

       Whereas, American farmers are the world's most efficient 
     and productive, but heavy farm subsidies in competing 
     countries have put U.S. producers at an unfair advantage, and
       Whereas, Senator Kent Conrad (D-ND) has introduced the Farm 
     Income and Trade Equity Act of 1999 (``FITE'') to level the 
     playing field beetween U.S. farmers and their primary 
     competitors in Europe by matching European Union subsidies 
     dollar-for-dollar, and
       Whereas, Central Power Electric Cooperative is sensitive to 
     the economic crisis currently facing farmers.
       Now therefore be it Resolved, That the Board of Directors 
     of Central Power Electric Cooperative hereby supports the 
     FITE legislation and its goals to address the current 
     agricultural crisis and protect American agriculture in 
     future trade negotiations.
       Dated: July 21, 1999.
                                  ____


         Square Butte Electric Cooperative, Resolution No. 242

       Whereas, American farmers are the World's most efficient 
     and productive, but heavy farm subsidies in competing 
     countries have put U.S. producers at an unfair advantage; and
       Whereas, Senator Kent Conrad (D-ND) has introduced the Farm 
     Income and Trade Equity Act of 1999 (``FITE'') to level the 
     playing field between U.S. farmers and their primary 
     competitors in Europe by matching European Union subsidies 
     dollar-for-dollar; and
       Whereas, Square Butte Electric Cooperative is sensitive to 
     the economic crisis currently facing farmers;
       Now therefore be it Resolved, That the Board of Directors 
     of Square Butte Electric Cooperative hereby supports the FITE 
     legislation and its goals to address the current agricultural 
     crisis and protect American agriculture in future trade 
     negotiations.
                                  ____

                                                North Dakota Rural


                                          Development Council,

                                       Bismarck ND, July 22, 1999.
     Senator Kent Conrad,
     Senate Office Building,
     Washington, DC.
       Dear Senator Conrad: The North Dakota Rural Development 
     Council is a relatively new organization with the focal 
     contention that the future depends most heavily upon the 
     vitality of our communities. Hence, one of the primary 
     objectives is to strive for the elimination of barriers which 
     are known to hinder effective rural development efforts.
       As eloquently expressed in the Overview section of the Farm 
     Income and Trade Equity Act of 1999, the heavy farm subsidies 
     available to commodity producers in competing foreign 
     countries, places our farmers at a tremendous and untenable 
     disadvantage.
       Please consider this correspondence as a tangible 
     indication of support for FITE, and, a written endorsement 
     for the introduction of such timely and all-important farm 
     and rural community survival and preservation legislation. 
     Thank you for your untiring and meaningful efforts and 
     demonstrated commitment, as further evidenced by the Farm 
     Income and Trade Equity Act of 1999.
           Sincerely,
                                               Cornelius P. Grant,
     Executive Director.
                                  ____

                                               North Dakota School


                                     Boards Association, Inc.,

                                      Bismarck, ND, July 23, 1999.
     Senator Kent Conrad,
     Hart Senate Building, Washington, DC.
       Dear Senator Conrad: The North Dakota School Boards 
     Association is favorable to The Farm Income and Trade Equity 
     Act of 1999. As you know our rural agriculture communities 
     are struggling to keep their family farms going. This, of 
     course, impacts the resources available to support their 
     public schools.
       NDSBA supports your efforts to assist the family farmers 
     and the rural economy of North Dakota.
       We would also like to thank you for your continued support 
     of locally controlled public schools.
           Sincerely,
                                                   Mike Zimmerman,
     President.
                                  ____


  54th Annual Meeting of the Midwestern Legislative Conference of the 
             Council of State Governments, July 18-21, 1999


     Resolution on Fair Markets for American Agricultural Products

       Whereas, the U.S. stock market continues to reach record 
     highs almost daily and the American economy experiences 
     unprecedented expansion and growth; and
       Whereas, farm commodity prices continue to plummet while 
     agricultural production costs steadily rise, forcing American 
     farmers and agribusiness into bankruptcy while the rest of 
     the economy prospers; and
       Whereas, American farmers and ranchers, who are recognized 
     as the most efficient and productive in the world, are at a 
     considerable disadvantage in competing in the world markets 
     because of the heavy subsidies their primary competitors, the 
     members of the European Union, receive; and
       Whereas, this extreme imbalance in our economy and the 
     unfair competition with the European Union cannot be 
     corrected without our government's intervention; now 
     therefore be it
       Resolved, that Midwestern Legislative Conference favors 
     legislation that would include support to American producers 
     which would put prices received for crops on even per with 
     those of our European Union competitors; and be it further
       Resolved, that Midwestern Legislative Conference favors 
     sensible legislation that would allow our agriculture 
     producers to compete in the global economy while providing an 
     abundance of reasonably priced food for our domestic market; 
     and be it further
       Resolved, that the Midwestern Legislative Conference urges 
     the Administration and Congress to secure measures to protect 
     American producers now and in the future from unfair 
     competition so that the citizens of the United States can 
     continue to enjoy the benefits of high quality food at 
     reasonable prices.

  Mr. CONRAD. We have support from the North Dakota Farmers Union, the 
North Dakota Association of Rural Electric Co-ops, the North Dakota 
NFO, the U.S. Duram Growers Association, the Milk Producers Association 
of North Dakota, the American Renewable Oil Association, the North 
Dakota Bankers Association, the Central Power Electric Cooperative 
Board of Directors, the Square Butte Electric Cooperative, the North 
Dakota Rural Development Council, and even a resolution of support from 
the Midwestern Legislative Conference of the Council of State 
Governments that, while not endorsing the specifics of this 
legislation, specifically endorsed the concept in which they say:

       The Midwestern Legislative Conference favors legislation 
     that would include support to American producers which would 
     put prices received for crops on an even par with those of 
     our European Union competitors.

  Mr. President, the Midwest Council of State Governments has it right. 
We simply cannot permit our farmers to be left at a competitive 
disadvantage. We must fight back. That is what the FITE legislation 
will do.
  We have had an unprecedented outpouring of support in North Dakota. 
In addition to those who have sent written comments, the North Dakota 
Wheat Commission has gone on record supporting this legislation. We 
have many more who are considering resolutions of support. I am hopeful 
that this will start a ground swell that will spread across the country 
and send a message that the United States does not intend to give up 
our agricultural dominance. That would be a mistake. It would be one we 
would live to regret. We are very close now to these negotiations this 
fall. If we don't alter dramatically the negotiating environment, we 
are going to lose. Make no mistake about it. We are going to lose.
  It doesn't have to be that way. It should not be that way. But it is 
in our hands. We have a choice to make. Do we fight back, or do we give 
up?
  At a time of unprecedented economic prosperity in this country, it 
would be a travesty for us to have lost the world

[[Page S9233]]

agricultural trade battle because we were unwilling at this critical 
moment to respond. I hope we don't let this opportunity pass us by.
  Some people watching me say: Well, why should we help farmers?
  I believe farm families are the backbone of strength for this 
country. They are absolutely fundamental to America's success. They 
have long been the dominant source of our trade surpluses. Overall, we 
run massive trade deficits. But in agriculture, we have run trade 
surpluses. It has been one of two sectors of this economy that has run 
trade surpluses, and we are right at the brink of losing that. That 
would be a tragedy for this country--not just because of the dollars or 
just because of the economics, but because of what it would mean to the 
fundamental strength of this country.
  In Europe, they made a decision. They decided they wanted to have 
people out across the land. They didn't want everybody forced into the 
cities, so they made it possible for people to prosper in the rural 
parts of Europe. Perhaps their being hungry twice before informed those 
decisions. But whatever the reason, you can travel through the French 
countryside and the German countryside and it is prosperous; they are 
doing well. But go through the countryside of my State and what you see 
is an area that is in economic decline. It is not just in North Dakota; 
it is all across the heartland of America.
  The question is, Are we going to let it go? You know, it would be one 
thing if it were a fair competition. It would be one thing if it were 
simply the fact that our farmers weren't as competitive or as efficient 
as our competitors. But that is not the case. It is not the case. The 
fact is, our farmers are as competitive and as efficient as any in the 
world. What is hurting them is that other nations are willing to fight 
for their producers, and we have been in retreat.
  We have to decide what kind of country we want to have. Do we want 
everybody to move to town? Or do we want people out across the land? 
Europe has made a decision that they want people out across the 
countryside, and they have made it possible economically to be there. 
Now the choice comes to us. The hour is late because these negotiations 
will start this fall, and if we don't do something to change the rules 
of the game, our side is going to lose. It doesn't have to be that way. 
It should not be that way. But we have choices to make in this Chamber, 
and across in the other Chamber, about what is going to be the policy 
of America, what is going to be our position.
  I hope very much that we will decide we are going to give our farmers 
a fighting chance. I hope very much that we are going to make a 
decision that the best policy is to have people out across the land, 
not to have everybody come to the cities. I hope very much we are going 
to conclude that it is in our national interest, just as the Europeans 
have concluded that it is in their interest, to give farmers a fighting 
chance. There is no way they are going to win this battle when the odds 
are stacked against them: 10-to-1, 50-to-1, that is the unevenness of 
the fight our farmers are in now. It is in our hands; it is our 
decision.
  I hope very much that we can start across this country a move to say: 
Let's fight back. Let's put our farmers on a level playing field. Let's 
rearm our negotiators. Let's prepare for this battle. Let's not lose. 
Let's win a victory that would make a difference for hundreds of 
thousands of farm families across America and the cities and towns that 
are dependent upon them and, at the end of the day, for a country that 
needs them.
  I yield the floor.
                                 ______