[Congressional Record Volume 145, Number 111 (Monday, August 2, 1999)]
[Senate]
[Pages S9988-S9994]
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, 2000--Continued

  The PRESIDING OFFICER (Mr. Fitzgerald). The Senator from Mississippi.
  Mr. COCHRAN. Mr. President, I understand the parliamentary situation 
is that we are now back on the Agriculture appropriations bill. The 
pending amendment is the Cochran amendment to the Daschle amendment.
  The PRESIDING OFFICER. The Senator is correct.
  Mr. COCHRAN. The Senator from Iowa asked unanimous consent before we 
permitted discussion of the Collins bill that he be recognized 
following the vote.
  I am rising to clarify the situation, and also to inquire how long 
the distinguished Senator is planning to speak at this point. I am 
hopeful that there will be time for the distinguished Senator from 
Indiana, Mr. Lugar, who is chairman of the Committee on Agriculture, to 
speak for about 30 minutes. He has to chair a committee hearing in the 
morning beginning at 9 o'clock and won't be available tomorrow morning. 
I am hopeful the Senator will either let Senator Lugar proceed now or 
after a reasonable time for the Senator to then be recognized for 30 
minutes.
  That is the purpose of my inquiry of the Senator from Iowa. I did not 
object when the Senator sought unanimous consent to be recognized 
because I thought I had talked about 15 minutes and the Senator had 
talked about the same period of time, or maybe a little longer. That is 
the purpose of my inquiry.
  Mr. HARKIN. I appreciate it.
  The PRESIDING OFFICER. The Senator from Iowa.


                         Privilege Of The Floor

  Mr. HARKIN. Mr. President, I ask unanimous consent that Traci 
Parmenter, an intern in my office, be granted floor privileges for the 
duration of the debate on the Agriculture appropriations bill.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HARKIN. Mr. President, I say to my friend from Mississippi that I 
don't intend to talk too much longer. I did want to engage in a 
colloquy with a couple of Senators who wanted to do so. I don't imagine 
it will take that long--a little bit of time, not that long.
  Mr. COCHRAN. I thank the Senator for his clarification.
  Mr. HARKIN. We will not take that long. As the Senator knows, I have 
tremendous respect for my chairman of the Agriculture Committee. But I 
wanted to wrap up our presentation with a short colloquy with my fellow 
Senators prior to yielding the floor. If I might, Mr. President, let me 
try to conclude the remarks that I had earlier.
  Did the Senator have a question?
  Mr. COCHRAN. No. My question of the Senator was how much longer he 
thought he would take. This is for the purpose of advising my friend 
from Indiana how long he would sit on the floor and listen to your 
colloquy, or whatever it is the Senator intends to do, or for how long 
the Senator intends to do it. It is just a question. I am not 
suggesting the Senator does not have the right to talk all night, if he 
wishes.
  Mr. HARKIN. I am not going to talk all night.
  Mr. COCHRAN. The Senator from Iowa has the floor. I am just curious 
about how much time he might take, or could we interrupt the remarks 
and let the Senator from Indiana proceed?
  Mr. HARKIN. About 15 minutes--perhaps not that long.
  Let me conclude my earlier remarks. Quite frankly, I find myself in a 
very uncomfortable position. This is extremely uncomfortable for me. I 
think the pending amendments are the ultimate statement on the failure 
of the current farm policy. Why do I say it is uncomfortable for me? 
Because I don't like it when farmers have to rely on government 
payments because they are not getting enough from the marketplace.
  I am uncomfortable with an amendment that provides above $10 billion 
in support for our farmers. I find myself extremely uncomfortable. That 
is why I view what we are doing here as part of a two-step process. 
First, we must get the emergency money; but second, we have to change 
the underlying failures of the Freedom to Farm bill or we will be right 
back where we are again next year, asking for billions more in 
emergency payments to deal with the crisis in the farm economy.
  Our farm policy now is based on cash payments. Now we are back here 
talking about even more cash payments. We are forced into this 
situation because the underlying farm policy is wrong. And that is how 
the Republicans' proposal is shaped. It is a stopgap gesture based on 
AMTA payments.

[[Page S9989]]

 So naturally, the larger farmers with the larger base acreages are 
going to get the most money. This policy goes against what government 
programs ought to be. Government programs ought to be for those who are 
in need. This amendment stands that principle on its head. The 
Republican proposal will give most of the money to the biggest farmers 
under the so-called AMTA payments. Our proposal offers a more equitable 
distribution by providing the assistance to producers who are actually 
on the farm right now and in relation to what they are growing now--not 
what they grew 20 or more years ago. That is a big difference between 
the two approaches.
  The Republicans' said they wanted to get rid of the old farm programs 
when they passed Freedom to Farm, but their AMTA type payments are 
based on that very same outdated base acreage and payment yield system 
that is decades old. And quite frankly, with the AMTA system, payments 
can go to someone who is not even trying to grow a crop and has not 
incurred those expenses. And the benefits of AMTA payments are too 
easily claimed by absentee landlords. They could be long gone and 
living in--Palm Beach, Miami, or retired in southern Texas or someplace 
else. Our proposal is designed to provide the money to real farmers who 
are actually farming and trying to grow crops.
  I might also add one other thing: We are facing some terrible 
disaster conditions around the country. I know out in the upper Midwest 
we have had floods and excessive moisture that have prevented planting, 
in the Dakotas for example, and we have had terrible floods and 
rainstorms in parts of Iowa. We are facing a tremendous drought on the 
eastern seaboard among the Atlantic coastal States where we also have 
farmers who are in dire straits.
  In our package, we have over $2 billion for disaster-related 
assistance. The Republican package has zero dollars to help farmers 
survive disasters, not for those on the Eastern seaboard suffering that 
terrible drought or others undergoing disasters. That is another big 
difference because these are truly farmers in need. They need help. Our 
bill has that help for them; the Republican bill doesn't.
  Those are the two major differences I see. I will have more to say 
tomorrow about the Freedom to Farm bill. Freedom to Farm had a lot of 
cheerleaders when it passed a few years ago, saying how great it would 
be. Those cheers ring hollow now. The proof of the pudding is in the 
eating. Quite frankly, farmers are going broke. And they know it is a 
failure. It has not protected farm.
  We must change the underlying farm policy. We need to get loan rates 
up. We had a bipartisan group of State representatives and Senators 
from Iowa here last week, Republicans and Democrats. They had a 
proposal for us: Raise the loan rates, allow the Secretary of 
Agriculture to extend commodity loans and provide storage payments to 
farmers, all of which I support. I said: You are talking to the wrong 
person; you ought to talk to the backers of Freedom to Farm. Don't try 
to convince me, I am for it.

  We ought to raise the loan rates. We ought to provide for storage 
payments. We ought to extend the loans. I think that is what we will 
come back and try to do in September, the second part of our two-step 
process.
  The name Freedom to Farm reminds me of a conversation a little bit 
ago when it was asked, is there anything good about the bill. I said 
about the only thing good in the Freedom to Farm bill is the name 
``freedom.''
  But considering where the farm economy is now, I am reminded of the 
words in the Janis Joplin song. ``Freedom is just another word for 
nothin' left to lose.'' How accurate that is when it comes to the farm 
crisis. For our farmers, the word ``freedom'' in the Freedom to Farm 
bill, is just another word for ``nothin' left to lose.''
  Mr. WELLSTONE. Mr. President, every time I'm home, farmers are saying 
to me: We appreciate some assistance so we can live to be able to farm 
another day, but we want to know whether we or our children or 
grandchildren will have any future? How are you going to deal with the 
price crisis? What are you going to do to change the direction that 
this freedom to farm bill has taken us?
  Farmers focus on the structural issues. They want Members to write a 
new farm bill. They don't want a bail out every year. They want to be 
able to get a decent price in the marketplace. They want a fair shake. 
That is all they want.
  I ask my colleague from Iowa, also my friend from North Dakota, what 
should we be focusing on here in the U.S. Senate beyond this emergency 
assistance package to make sure that farmers can get a decent price, 
and that family farmers can be able to make a living and their children 
can farm and our rural communities can flourish?
  Mr. HARKIN. In responding to my friend from Minnesota, I was meeting 
with farmers this week in Iowa talking about our emergency package. On 
more than one occasion the farmers got up and said: We appreciate what 
you are trying to do. We can sure use the money. But if all you are 
going to do is send out another check and we are going to have the 
Freedom to Farm bill again next year, it isn't going to work because we 
will be even deeper in the hole next year.
  They are begging Congress to change this policy.
  I tell my friend from Minnesota what I hear most often from them is 
they have to have a better price, they have to be able to market their 
grain more efficiently, and they need some limited kinds of 
conservation land idling program shorter than 10 years.
  The vast majority of farmers I talked to said we have to get our 
supply and demand in line. The only way we will get them in line 
anytime soon is if we have some land out of production. With short-term 
land retirement, something to take land out for conservation purposes 
for 2 years, or 3 years at the most, where they get some economic 
benefit for that, coupled with higher loan rates and the extension of 
the loan and storage payments, we can start to get some stability and 
get the farm economy back on track.
  This past weekend as well as on other Iowa visits, farmers are 
telling me if we don't change the underlying farm bill it will get 
worse next year.
  Mr. DORGAN. Will the Senator yield?
  Mr. HARKIN. I yield.
  Mr. DORGAN. I think the points being made here are important to 
understand. If all we do is to pass a disaster relief package and do 
nothing to change the underlying farm bill, we will not have addressed 
problems in a way that gives family farmers hope that there is a 
future.
  Let me ask the Senator about the underlying farm bill. The underlying 
farm bill, the Freedom to Farm bill, has put us in a position where 
payments were made to farmers early on when farm prices were very high 
and farmers didn't need those payments. Now, when farm prices have 
collapsed and farmers need a bigger payment, they are still getting the 
same payment or a lower payment than they were getting when prices were 
high.
  In other words, there is a disconnection with respect to need. 
Freedom to Farm, was it not, was a transition payment. It was to 
transition them out of the farm program. That was the philosophical 
underpinning of the farm bill.
  Is it the judgment of the Senator from Iowa that while we do this--
and it is urgent that we must do this, pass some disaster relief bill--
that we also must accompany that with a change in the underlying farm 
bill, sooner rather than later, because if we do not, those farmers who 
are making decisions about the future will have to decide there is no 
hope ahead?
  Freedom to Farm means there are lower price supports even when prices 
collapse. Isn't it true that this must be the first step in a two-step 
process?
  Mr. HARKIN. I could not agree more. I would proffer this. If all we 
do is pass this emergency package, either this one or the scaled-down 
package of the Republicans, and we do nothing else, farmers are going 
to see the handwriting on the wall. If we do not change that Freedom to 
Farm bill, they are going to see it and they will say, I'm going to be 
right back where I am again next year. Farmers are going to say, I'm 
getting out. They will be leaving in droves. It will drive farmers out.
  In the State of Iowa, from April of 1998 to April of 1999, land 
prices in Central Iowa have gone down 11 percent already. The Governor 
of Iowa was at a

[[Page S9990]]

meeting I held in Iowa this weekend. He said, when the legislature left 
3 months ago, when they went out of session, they estimated the growth 
in revenues at 1.8 percent. It is now down to 1 percent. That is going 
to affect our schools and everything else in the State of Iowa. So the 
broader impacts on Iowa's economic health are already being felt. It is 
already happening.
  I have had people tell me if all we are going to do is put the money 
out there, it will help them some with their debts, it will help them 
get through the next few months, help them get through the harvest, but 
if we do not change the Freedom to Farm bill, they are out, they are 
not going to be there next year.
  Mr. DORGAN. May I ask one further question?
  Mr. HARKIN. I yield for a question.
  Mr. DORGAN. Payments, as I understand them, have gone too far in the 
current farm bill, the underlying farm bill; too high in the disaster 
programs. Perhaps both programs should be adjusted lower. My 
understanding of the program that has been offered earlier today, by 
the majority party, is with the triple-entity rule, the payment limits 
would effectively, under that rule, be about $460,000--under their 
disaster package. In my judgment, that is too high. In my judgment, we 
should craft a farm program and craft disaster programs that target 
help for family-size farms. If that is not what it is about, my feeling 
has always been, if we are not targeting help to family farmers, we 
don't need a Department of Agriculture. The only reason to have all of 
this is to help family farmers.
  Mr. HARKIN. The Senator is onto something regarding payment 
limitations. In the Republicans' proposal, the maximum payments that an 
individual can receive--by setting up partnerships or corporations to 
maneuver around the limits--would be $460,000. Nearly half a million 
dollars to one individual.
  Mr. DORGAN. If I might--
  Mr. HARKIN. Again, I think we ought to be here to help people who 
really need some help and get it out. To me, that is going way beyond 
the bounds there.
  I yield for a question.
  Mr. DORGAN. If I might again just inquire, I had computed it under 
the three-entity rule, what they could achieve. If I have missed part 
of that and they can achieve $460,000, it simply makes the point; 
$300,000 is too much. Mr. President, $460,000 is way out of bounds. We 
ought to be trying to get a reasonable amount of support during this 
price collapse to family-size farms.
  I come from ag country, but I will not support giving $300,000 to 
anybody in farm country. We don't need that. That is not what a farm 
program ought to be about, in disaster help or in regular help, when 
prices collapse. That is not supporting a family-size farm; that is 
spending taxpayers' money in support of farm operations far in excess 
of family farms. That doesn't make any sense to me.
  Again, when I inquired of the Senator from Iowa, I was thinking of 
the repeal of the three-entity rule. If there is another device that 
goes above the $300,000, that simply compounds the aggravation with 
respect to who is going to get this money and how much. Let us find a 
way.
  I ask the Senator from Iowa, isn't our job here to craft a decent 
disaster bill, first, that gets the most help possible to family-size 
farms and, second, to decide we must follow it quickly by saying the 
current farm bill doesn't work, that is obvious to everyone--obvious 
because we have to pass disaster bills every year now--and we should 
change the underlying farm bill in the same way that provides real help 
to family farmers so when prices collapse they have a chance to 
survive?
  Mr. HARKIN. I respond to my friend from North Dakota: These big cash 
payments are an inherent part of the Freedom to Farm bill--an inherent 
part of it. A lot of that money goes to the big operators. Yet we have 
our family farmers out there who are just trying to get by.
  That is why this Freedom to Farm bill--I wish I could say just one 
good thing--the only good thing about Freedom to Farm was flexibility. 
It gave the farmer planting flexibility. But as the Senator from North 
Dakota might remember, when we were debating the farm bill, the Senator 
from North Dakota offered an amendment to provide the planting 
flexibility to farmers and still have a farm program that provided 
higher loan rates and storage payments and some set-asides within the 
confines of the farm program. If I am not mistaken, it was the Senator 
from North Dakota who offered the amendment to provide the flexibility 
to farmers to plant what they wanted, where they wanted, and yet it was 
defeated on a party-line vote.
  So there were those who sold to the farmers the Freedom to Farm bill 
on the basis that they would have planting flexibility. But we did so 
in our proposal. We provided planting flexibility in our alternative--I 
believe it was the Senator from North Dakota who offered it----
  Mr. DORGAN. Senator Conrad.
  Mr. HARKIN. Senator Conrad, the other Senator from North Dakota, 
offered it. That was to provide that planting flexibility. We were all 
for that. There was no one here who was not for that. I think farmers 
by and large got very confused by that. They were told by our friends 
on the other side of the aisle you had to have Freedom to Farm to get 
flexibility. That is not so. What happened with Freedom to Farm is that 
it took away the safety net and we are in the situation we are in right 
now. I repeat, for emphasis' sake, these big cash payments are an 
inherent part of the Freedom to Farm bill.
  I will yield for one more question.
  Mr. WELLSTONE. I will say to my colleagues--and I know they are 
waiting to speak, and I will soon be done after just a final question--
I apologize you have to wait.
  I especially say that to Senator Grassley since he was gracious 
enough, when I was in Iowa, to tell me if I needed a place to stay, I 
could stay at his farm. I much appreciated it.
  Mr. HARKIN. He would have fed you pretty well, too.
  Mr. WELLSTONE. I know. I am going to do it next time for sure.
  Let me ask one more question, and before I do, I ask unanimous 
consent--if tomorrow morning we are going to be in debate as well--that 
I could have 15 minutes to speak on this.
  Mr. COCHRAN. Reserving the right to object, what is the request?
  Mr. WELLSTONE. I was asking whether or not tomorrow morning we are 
also going to be in debate on this and that I could have 15 minutes to 
speak on it.
  Mr. COCHRAN. I am constrained to object to any request to speak in 
the morning. We have not had an announcement as to what time we are 
coming in or how the bill will be handled. The usual rules of seeking 
recognition I think probably will apply tomorrow.
  Mr. WELLSTONE. OK. Let me ask my colleague: My friend from North 
Dakota made the distinction between agriculture and family farmers; his 
passion is for the producers, the family farmers. Beyond this 
assistance bill, we would like to see something that would help people 
continue to survive. In Minnesota, on August 21, we are going to have a 
Rural Crisis Unity Day with a whole congressional delegation there to 
meet with the farmers and business people and all, really, of rural 
Minnesota. Does he think it would be helpful for people to say: We need 
you to do something about the price crisis; we need you to do something 
to make sure we get a fair shake; we need you to make sure it is not 
just for Cargill, it is for family farmers; it is not just for IBP or 
the packers--it is not for the packers, it is for the producers? Do you 
think this is the kind of thing we are going to need to see in many of 
our agricultural States over the next several months to come, to put 
the pressure on the House and Senate to pass a bill for family farmers 
as opposed to these big conglomerates?
  Mr. HARKIN. I say to my friend from Minnesota, I hope each of us in 
our own capacity would understand what is happening out there right 
now. We are not blind. We are not deaf. We are not without the 
capability of going out in the countryside and talking to farmers and 
listening to them. We all do that.
  If we have eyes to see and ears to hear and a decent knowledge of 
what is happening on the farms, I hope we will not have to have all the 
rallies and have farmers come to big meetings to try to impress upon us 
this need. I daresay, however, the way things are going that will 
happen.
  If we do not address the underlying aspects of the Freedom to Farm 
bill,

[[Page S9991]]

you are going to get more and more farmers out to these meetings, 
especially after harvest. Of course, farmers are busy during the 
harvest. You will not see too many of them probably in the fall. It is 
going to be a long, cold winter if we do not change the underlying 
bill. It will not be just the farmers, you will have the bankers come 
in. I have heard from bankers in, and you are going to have people from 
small towns and communities, the school boards and everybody else 
saying: Look, what is happening? Our towns are drying up.
  I say to my friend from Minnesota, I hope we will not force farmers 
to go to meetings and plead with us to recognize the dire straits they 
are in. We know it. We know what it is like out there. We have all the 
data. We have the statistics. We know what the prices are like. Pick up 
the newspaper and read what the prices are. Look at what futures prices 
are. I had a chart earlier today about the prices. Cash price of 
soybeans is down about half, about 45 percent in about the last 2 
years. You do not really need much more than that to understand what 
the problem is, I say to my friend from Minnesota.
  Mr. President, I ask unanimous consent to print in the Record an 
outline of the $10.793 billion that is in the first-degree amendment, 
which is pending at the desk, outlining the different line items and 
where that money goes so people can look at it tonight.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

          Democratic position: Emergency relief for agriculture
                        [In billions of dollars]
Income.........................................................    6.045
                                                                ========
  Income Loss Payment..........................................    5.600
  Dairy........................................................    0.400
  Peanuts......................................................    0.045
  Tobacco farmers..............................................    0.328
                                                                --------
    Total......................................................    6.373
Disaster.......................................................    2.274
                                                                ========
  Crop insurance--30% premium discount.........................    0.400
  Backfill 1998 disaster programs..............................    0.356
  Livestock assistance programs................................    0.200
  Section 32 (domestic food purchases, direct payments related     0.500
   to natural disasters).......................................
  Disaster Reserve.............................................    0.500
  Flooded land program.........................................    0.250
  Emergency short-term land diversion program..................    0.200
  Producers erroneously denied eligibility for '98 relief......    0.070
  FSA loans....................................................    0.100
  FSA emergency staffing needs.................................    0.040
  Ag mediation.................................................    0.002
  USDA rapid response teams....................................    0.001
                                                                --------
  Shared Appreciation Agreement regulatory relief..............  .......
    Total......................................................    2.619
    Income/disaster total......................................    8.992
Emergency conservation.........................................    0.212
                                                                ========
  Emergency Watershed Program..................................    0.060
  Emergency Conservation Program...............................    0.030
  EQIP--Prioritize livestock/nutrient management...............    0.052
  Wetlands Restoration Program.................................    0.070
                                                                --------
    Total......................................................    0.212
Emergency trade provisions.....................................    1.288
                                                                ========
  Humanitarian assistance, oilseeds and other..................    0.978
  Cooperator program (foreign market development)..............    0.010
  Step 2 (cotton)..............................................    0.439
                                                                --------
    Total......................................................    1.427
Emergency economic development.................................    0.150
                                                                ========
  Cooperative revolving loan fund..............................    0.050
  Emergency rural economic assistance..........................    0.100
                                                                --------
    Total......................................................    0.150
Emergency policy reform........................................    0.012
                                                                ========
  Mandatory price reporting funding............................    0.004
  Country-of-origin labeling...................................    0.008
                                                                --------
    Total......................................................    0.012
                                                                ========
    Grand total................................................   10.793
 

  Mr. HARKIN. I thank the indulgence of my friend from Indiana. I know 
my friend wanted to engage in a little colloquy. I am sorry for holding 
him up. I yield the floor.
  The PRESIDING OFFICER. The Senator from Mississippi.
  Mr. COCHRAN. Mr. President, I ask unanimous consent that the 
distinguished Senator from Indiana, Mr. Lugar, be recognized for such 
time as he may consume.
  The PRESIDING OFFICER. Without objection, it is so ordered. The 
Senator from Indiana.
  Mr. LUGAR. Mr. President, I want to discuss the two amendments which 
have been offered by my colleagues, the distinguished ranking member, 
Senator Harkin of Iowa, and the distinguished chairman of the 
Agriculture Subcommittee on Appropriations, Senator Cochran. But I want 
to do so in the context in which Senators may be thoughtful about what 
type of action is appropriate, given not only the problems of 
agriculture but likewise the general problems that we have in this 
country that we are trying to address.
  I note, for example, that the President of the United States, in his 
speech to the Nation on agriculture on Saturday, indicated that there 
are a number of things at stake here. I quote the President:

       I am committed to working with Congress to provide the 
     resources to help our farmers and ranchers by dealing with 
     today's crisis and by fixing the farm bill for the future. 
     But we must do so in a way that maintains the fiscal 
     discipline that has created our prosperity that now makes it 
     possible for us to save Social Security, strengthen and 
     modernize Medicare with a prescription drug benefit and to 
     pay off our national debt guaranteeing our long-term 
     financial prosperity. These things are good for America's 
     farming and ranching families, too, and they're good for all 
     Americans.

  I quote the President because the administration has been asked a 
number of times for an opinion on what type of emergency spending, if 
any, is appropriate at this point, on August 2, for a harvest that, by 
and large, is not yet in and with conditions that must, of necessity, 
be unknown. The administration has been reticent to address this 
situation with any figure, in large part because the administration 
and, for that matter, many people in this Senate have been arguing over 
how the surplus we believe will come after September 30 should be spent 
or the surplus for future years. There have been a number of strong 
contending ideas which include the rescue of Medicare and Social 
Security reform, tax reduction, prescription drugs for those in 
Medicare who do not have that, and the various other things the 
President has cited.

  I make this point because usually on this floor we are into that kind 
of debate about our future and about how to use our resources. But from 
time to time, we have a debate on agriculture, and everything else is 
suspended. It is as if the money we are talking about today, the $10.8 
billion, for example, that Senator Harkin addressed, does not pertain 
to any of the above--tax reduction, Medicare, Social Security, the 
surplus, and what have you. It is deemed emergency spending, outside 
the budget, outside the budget caps, outside of our general 
consideration.
  If we are to do emergency spending of that amount or any amount, 
there must be some requirements to show the criteria for what is 
required. That is what I want to review with the Senate this evening.
  I suggest the Department of Agriculture, in its most recent summary 
of where agriculture stands, points out that with low commodity prices 
in 1999, the year we are in, net farm income will be $43.8 billion. 
They point out that will fall below the revised estimate of $44.1 
billion for 1998, last year. That means the estimate for this year is 
$300 million, or less than a 1 percent change, from the net income in 
1998.
  I make that point because, as I have listened to the debate, Senators 
appear to be describing a loss that is substantially greater than that, 
but USDA in estimates made just last week, plugging in the low prices 
and plugging in also sometimes low inputs--that is, for feed costs and 
various other things agriculture people will need--have come to a 
conclusion the net change is only the difference between $44.1 billion 
and $43.8 billion.
  Beyond that, the average net income of the last 5 years has been 
$46.7 billion, which means this year's figure, if it comes out this 
way, is $2.9 billion less than the 5-year average. The average for the 
8-year period covering 1990 through 1997 is $45.7 billion, so this 
year's result is 1.9 less than the 8-year average, or approximately 4 
percent.
  I am not making a claim it is higher; I am saying it is going to be 
lower. It is going to be lower by $300 million as

[[Page S9992]]

opposed to last year and at least $2 billion to $3 billion less than 
the 5-year and 8-year averages.
  As I have been listening to the debate and Senators have described 
this as a depression, a circumstance, Senators must take a look at the 
parameters of what is the actual set of facts. Let me point out 
historically the high water mark for agricultural income in the last 10 
years was $54.9 billion in 1996. That followed the low year in 1995 of 
$37.2 billion. Low of 37, high of 54.9. Average: 45, 46 for the 5-year/
10-year situations. This year: 43.8, close to 44 billion.
  That is the range. This is net income, not net loss. Agriculture had 
a substantial net income never below $37 billion and never higher than 
$54.9 billion in this 10-year period of time.
  We are taking a look at a situation that shows loss, but we ought to 
quantify that loss. These are the official USDA projections as of last 
week.
  Senators will recall that 1998's net farm income of $44 billion 
included $12.2 billion of direct Federal Government payments. About $9 
billion was provided by the farm bill and the remaining $3 billion was 
made available by the October 1998 emergency appropriations bill. But 
this year, already, before this legislation comes to the floor, Federal 
payments are projected to be $16.6 billion.
  Let me point out how this can be true. The safety net provided by the 
current farm bill--that safety net--provides for an annual transition 
payment, a so-called AMTA payment, of $5.1 billion. That is provided 
for by the farm bill, and to be paid to all farmers according to 
formula at the times that are prescribed. But loan deficiency payments 
for corn, wheat, soybean, and other crops eligible for marketing loans 
are estimated at $6.6 billion. This is a safety net provided by the 
current farm bill.
  It has been suggested a number of times that the current farm bill, 
in its emphasis upon market economics, has no safety net. But I am 
pointing out $5.1 billion in AMTA payments and another $6.6 billion in 
so-called loan deficiency payments, still another $4.8 billion to be 
paid out in conservation and crop loss disaster payments, with $2 
billion of that authorized by the 1998 October emergency appropriations 
bill.
  It is important to note that most of the farm debate has focused on 
low prices, and charts have been given to the Senate indicating how 
prices have tended downward over the years. But, nevertheless, the more 
important figure would be price times yield; that is, the income that 
comes from an acre.
  If, in fact, the price is low but the yield is high, the product of 
the two may still be a reasonable return for that acre in that year. 
There is an even more important fact that I suspect that many Senators 
have not thought through clearly. An article that I saw on the front 
page of USA Today talked about a farm meeting the distinguished 
occupant of the Chair attended in Illinois. That particular article 
mentioned low prices and pointed out the depression and the fall of 
those prices.
  But if the price of corn--as has been sometimes suggested--has been 
quoted at elevators at $1.75 or $1.70 per bushel, the good news is that 
a farmer will receive, at least if he is a farmer in the central part 
of Indiana, $1.95. That is price guaranteed through the loan deficiency 
payment in that part of the state.
  How does this work? Let's say the farmer brings the corn in and the 
market price is $1.70 per bushel at the time of harvest. At the Beach 
Grove elevator in Indianapolis, that farmer will receive what amounts 
to 25 cents a bushel more, bringing that $1.70 up to $1.95. The same is 
true for soybeans at Beach Grove, IN. The soybean loan rate will be 
$5.40. In some parts of the country it may be $5.26, I am advised, but 
it is not $4 or $4.50 or $4.60 or $3.75 or various figures that have 
been quoted.
  This is a tough concept to try to get across because even after you 
make the point again and again, people talk about a $3.75 market price 
for soybeans. What I am saying is that every bushel of soybeans the 
farmer brings into the elevator, he is going to get $5.26 to $5.40 
because the government's loan deficiency payment will provide him with 
a payment equal to the difference between his market price and the 
local county loan rate. That is very different.
  This is not a question about how low the prices are going to go. If 
they go lower, the loan deficiency payment is higher. That is why the 
Federal Government will be paying out at least $6.6 billion to make up 
the difference. It was the same for wheat. In many parts of the 
country, the wheat harvest has already come in. But the government 
guarantees at least $2.58 for wheat at many elevators around the 
country.
  I make that point because that is the safety net of the current farm 
bill. It is a pretty strong safety net. It will provide a very 
substantial amount of income as the harvests occur, as the grain comes 
in, as the loan rates are established. It will amount to $6.6 billion 
that has not yet been received but will be received by farmers. 
Hopefully, that will take the debate away from a comparison of how low 
the prices are going to go to the concrete figure of what the loan 
deficiency payment will be--specifically, as I say, again, in most 
parts of the country, at least $1.89 for every bushel of corn, $2.58 
for every bushel of wheat, and $5.26 for every bushel of soybeans. At 
many elevators it will be a higher figure than that, including the one 
in Indianapolis that I cited. Farmers receive that even if the quoted 
market price is much lower.
  Let me mention some other statistics the USDA has pointed out that 
may give you some idea about the parameters of our discussion.
  In the same report last week of USDA giving estimates on net income, 
USDA also went into the question of farm assets and farm debt and farm 
equity. If you had heard the entirety of the debate today--or maybe for 
some time--on this issue, the Chair might logically believe that land 
values in this country are going down if they pertain to agriculture; 
that the net worth of farmers collectively in this country is going way 
down. That, in fact, is not the case.
  The Agriculture Department points out that farm equity, which was 
$825 billion in 1996, rose to $857 billion in 1997. It is estimated to 
go up to $865 billion this year. That is an increase of approximately 
$9 billion more, or a 1-percent increase in net worth. The farm real 
estate figures are $802 billion for this year as opposed to $794 
billion last year, and $783 billion the year before, and $746 billion 
the year before that.
  It does not mean every acre of land in every county all over America 
is going up. As a matter of fact, the Federal Reserve Board statistics 
for my home State of Indiana indicate an estimate that in the first 
quarter of 1999, real estate values in agriculture may have gone down 
by 2 percent. As a matter of fact, that was true of a number of States. 
But in a fair number of States, obviously, the estimate is that 
agricultural land is going up. The aggregate, the total, for America is 
the land values are higher. Furthermore, the net worth is higher 
because farm debt will decrease from $172 billion to $171 billion.
  Once again, listening to the debate you would say, how can that be? 
If we are in a depression circumstance, how can you be arguing that 
real estate on farms is going up, that net worth is going up, that debt 
is coming down? Because that is what is occurring. You can give any 
number of statistics about prices falling, but the fact is that net 
income is going to fall by $300 million. And that will still be within 
$2 to $3 billion of a range for the last 5 or 10 years of time.
  Let me try to bring clarity to the argument in still another way.
  The distinguished Senator from Iowa, Mr. Harkin, has mentioned, in a 
fact sheet that he released and he gave some of these figures again 
today, that there will be a 29-percent drop in agricultural income, but 
Senator Harkin correctly says this is a drop in principal field crops, 
not all of agriculture, but principal field crops.
  I have noted that situation on my own farm. The distinguished Senator 
from Iowa, Mr. Grassley, is on the floor. He has a family farm and 
could cite statistics from his farm if he were inclined to do so.
  On my farm, Lugar farm in Marion County, IN, our net income in 1998 
was 18 percent less than in 1997. That was true principally because our 
major income sources were soybeans and corn. My guess is that our net 
income in 1999 may have a similar reduction, although I hope not so 
great as the 18-percent that was suffered the earlier year.

[[Page S9993]]

  Obviously, it makes a very great deal of difference, when you come to 
the net income situation or the difficulty of a farmer, whether the 
farmer has debt. Our situation is one in which we do not have debt. We 
are able to finance our operating loans, our operating expenses, 
without loans and out of retained capital. So that gives you a big 
headstart. For those farmers who have extended themselves to buy the 
adjacent farm or have never quite paid off the family mortgage and who 
must borrow each year to put a crop in the field, the interest costs 
are very substantial. Those are reflected still in the overall 
aggregate statistics of net farm income in this country.
  As you take a look at ag statistics, the fourth that do the best as 
opposed to the fourth that do not do as well, very frequently the same 
amount of land is involved, same weather was involved. The question of 
debt intrudes and makes a big difference in the bottom line figure; 
likewise, the sophistication of the marketing plan. Even in the midst 
of the crisis we were talking about last week, I was able to make a 
sale of 1,000 bushels of corn to an elevator in Indianapolis at a 
figure higher than the loan rate, the government's guaranteed minimum 
price. That prospect was available to each farmer in America, I 
suspect, that day. We sold that corn for $1.97 for fall delivery. That 
is not a high price, but that is corn that will not be receiving a loan 
deficiency payment, corn sold in a market which is still out there. In 
weather-driven spurts, farmers have been able to market corn and 
soybeans even under these dire circumstances.
  I make that point because those who made sales forward contracts last 
February and March were able to sell their corn and their soybeans at 
prices that were substantially higher. Many farmers do these sales; 
some farmers do not. We are attempting to deal with a situation of a 
total aggregate, those that did very well and those that did not do so 
well.
  Finally, it seems to me it comes to a basic decision the Senate must 
make. That is, should the Senate say that agriculture, farmers in 
America, ought to be made whole, at least to the extent their income is 
raised to, say, the average level of the last 5 years or the average 
level of the last 10 years? Is it the goal of the Senate to say no, 
that is not good enough? What we ought to do is make certain that 1999 
is one of the best years agriculture has ever had.
  The proposals before us today will not boost the $44 billion more or 
less of net farm income to $54.9, although they come very close. If the 
Democratic amendment was adopted and, literally, you added $10.8 
billion to the estimate of 43.8, you come up to 54.6, which is just 300 
million short of the all-time record for net farm income. In short, not 
a rescue operation but an idea, I suspect, that this is a good time to, 
if not set a new record, at least come very close to that through 
additional Government payments. That may not be the intent of the 
Senate.
  My guess is most Senators understand that farm income is down and 
they would like to make farmers whole, at somewhere around an average 
level, which would appear to mean a payment of $2 or $3 billion. 
Neither of the proposals before us is of that nature.

  I have pointed out in colloquies with the press during the past week 
that there is before the Agriculture Committee now a risk management 
bill that would, in fact, provide about $2 billion a year for each of 
the next 3 years if passed, and that would pretty well fill the gap, if 
that was the intent of the Senate to do that.
  I conclude that Senators finally will take a look at this entire 
situation and reach some overall judgments. Let me offer at least some 
reasons why some payments might be justified.
  First of all, farmers or the rest of America could not have 
anticipated the Asian crisis that hit about 2 years ago. The last year, 
in 1998, probably took away 40 percent of the demand of Asian countries 
for American agricultural products. That probably took away 10 percent 
of our entire market last year, which means that demand fell overnight 
by 10 percent, whereas supplies for the last 3 years have not only been 
ample but around the world the weather has been mighty good and the 
amount of supply abundant, really throughout that period of time. So a 
40-percent hit in terms of the Asian export demand hit very hard. It 
hit suddenly. Within a 90-day period of time we realized that 
difficulty.
  Let me also mention, in addition to the Asian situation and the 
oversupply situation, the abnormally good weather in China, in Europe, 
in Brazil, in Argentina, Australia, major sources of food throughout 
the world, that the American farmers have run up against the problem of 
genetically modified organisms in European debate, which means that 
Europeans are rejecting corn and soybeans that come with the roundup 
ready genetic changes.
  As we all know in America agriculture, in order to get rid of the 
weeds in the field, it is a much simpler process. It strengthens, 
certainly, the soybean and corn plants, if a gene is changed in the 
corn or soybean plants that rejects the herbicides that kills all the 
weeds but leaves the corn and the soybeans standing. We believe that 
not only is corn and soybeans from such situations safe, but as a 
matter of fact, our yields have increased. The health of the plants has 
increased, and we felt all over the world people might want to benefit 
from these breakthroughs. Not so in Europe, and a debate rages as to 
whether there is something fundamentally wrong with our genetically 
modified seeds to the point we are finding it very difficult to export 
a single bushel of corn or beans to the European market. That debate is 
going to go on for awhile, and it has not been helpful.
  We are on the threshold of a World Trade Organization meeting in 
Seattle that comes up in October. We must have fast track authority. 
That is, the President must be able to negotiate on behalf of the 
administration with other countries, knowing this body will vote up or 
down on the treaty without amendment, because amendments by all of us 
attempting to influence the situation to benefit our particular States 
or crops or so forth could be matched by amendments all over the world 
and the treaty negotiations collapse.
  We don't have fast track authority. We have tried in this body 
several times to obtain that. The House of Representatives had similar 
difficulties. It will require enormous leadership by the President and 
by many of us, but we cannot make a new treaty that knocks down trade 
barriers, that increases our exports in the way that all Senators want, 
without doing the basic steps. Fast track authority is one of them, as 
well as a determined will that agriculture will not be left off the 
wagon, that agriculture is an integral part of what our Nation must do 
at the WTO meetings.
  I make this point because we talk, often glibly, about the need for 
exports. Of course, we have a need for exports. But they will not 
happen in the quantities that we need to have happen without lowering 
tariff and nontariff barriers, and the Seattle meeting is where that 
does or does not get done. If we don't have fast-track authority, it 
will not occur during this administration. That is a long time.
  So for all these reasons, farmers have taken a direct hit, largely 
because of worldwide demand and in the case of many fields in the State 
of Illinois, or in my State of Indiana, or the State of Iowa, as much 
as a third to a half of all our acreage literally results in yields 
that must be exported, or we have it coming up around our ears. We know 
that and yet, as a Nation, we have not moved aggressively to make the 
difference that has to occur.
  So for all these reasons, the Senate might come to a conclusion that 
some compensation is required for farmers in order to keep their cash 
flow going. I made the point earlier that, as a matter of fact, loans 
will be reduced this year. But cash flow will be reduced, also. And for 
those farmers who have the need for operating loans, who are genuinely 
in danger because of debt situations, the situation could be dire and 
family farms could be lost.
  In the event that we are to make payments, the so-called AMTA 
payments, put money into the hands of farmers quickly, directly, and 
certainly--we had a pretty good demonstration of that last year. The 
Senate, in its wisdom, at the very end of the session as the large 
appropriation compromise came together, appropriated as part of a 
package about $6 billion for American agriculture. It came as a 
surprise to many, but the

[[Page S9994]]

form of it came as a surprise that was even more difficult. About $3 
billion of it came in AMTA payments. Those were made immediately. They 
were received by farmers in the first week of November, after passage 
late in October of the appropriation bill.
  I make that point because if we are serious about money actually 
arriving in the hands of farmers, then we must be serious about the 
distribution method. The AMTA method gets the money to farmers. It does 
increase cash flow. It is seen as equitable. The ratios were long ago 
worked out on the basis of crop history and the signatures for the farm 
bill. The other half of the $6 billion was for so-called disaster 
payments. They were ill-defined then, as they are ill-defined now in 
the legislation in front of us.
  The USDA struggled and, as a matter of fact, finally made payments in 
June of this year--not in November or October of last year--and it did 
so after exploring not only disasters of 1998 in some States, but '97, 
'96, '95 and '94--multiple years, all mopped up with some type of 
distribution and equity found among all sorts of contending parties in 
various States and counties.
  Mr. President, money is not going to get to farmers very fast in 
distribution methods that suggest that type of procedure, however 
humane the motivation may be. As a matter of fact, payments aren't 
going to go to any farmer very soon from this legislation because the 
House of Representatives is not prepared to act upon this. So, 
therefore, whatever we are doing with urgency now is going to be a 
matter for September, or if the appropriation bills do not pass for 
October or November, or whenever a grand compromise occurs.
  I make that point because farmers listening to this debate might feel 
there is some possibility as of tomorrow or the next day a vote by the 
Senate could lead to money coming to them. But it will not come to them 
very soon, whatever our result may be on the floor. Therefore, last 
week, I suggested that we have 3 days of hearings before the Senate 
Agriculture Committee, in which on the first day the Secretary of 
Agriculture would come before the committee and, hopefully, respond to 
our questions as to what the administration's recommendations are, 
given all that the President and the Secretary have said about the 
overall budget condition, about taxes, about Medicare, about Social 
Security, and given the administration's view of what is appropriate 
farm or agricultural legislation.

  And if you follow this with other groups in our society who would 
respond to Senator's questions about this, the committee will hold a 
markup in the first week of September so that the Appropriations 
Committee that must now struggle with this legislation would have a 
fairly clear roadmap of what the compromises were and what 
considerations have been given.
  Furthermore, the September debate would give us a pretty good idea of 
what the yields actually are going to be for a number of our major 
crops. I suspect that, even as we speak, as people now begin to talk 
about a different problem in agriculture--namely, drought--a whole slew 
of new considerations are going to come into the picture. The price 
might go up and the yield might go down. Once again, the product of the 
two is the critical element, rather than the new per acre.
  Mr. President, obviously, we are in this debate because the occupant 
of the chair and, more particularly, the distinguished floor leader has 
indicated that we need to get on with this. I accept that fact. We will 
have tomorrow morning in the Agriculture Committee at 9 o'clock an 
appearance by the Secretary of Agriculture. We will ask him for his 
testimony and we will ask him for the administration's point of view, 
which I think is relevant to what we are discussing here.
  I know it is relevant on the basis of last year's experience because 
we passed an agriculture appropriation bill, and it had considerable 
benefits for farmers. But it was vetoed by the President. And, as a 
result, the benefits did not accrue very rapidly, and we got into what 
I would say was a bidding war again. That is not advisable if it can be 
avoided in some normal framework. So I am hopeful that we will have a 
hearing, and at least that it will provide some benefit for the debate 
we are now having before us, and certainly for the debate we shall have 
again. We will have it again because the Appropriations Committees will 
have to come back with conference reports, and we will have to judge 
the adequacy or inadequacy of what we have done at that point.
  Mr. President, I finally make the point that the previous speakers 
have stated there is an emergency to be met, an immediate need for 
income. But, fundamentally, we must debate the entire farm bill when we 
come back--not simply a question of adequate income for farmers, but 
the fundamental law of the land.
  I am prepared for that debate, but I simply say that before Senators 
get engaged in the debate, it is well to gauge at least the benefits 
that come from the current farm bill. There are, to date, $16.6 billion 
this year, which is just $100 million short of an all-time record of 
farm payments. That is a substantial safety net. I make the point that 
the farm bill recognizes that point and, in fact, provides fairly amply 
when that occurs. But it also provides freedom to farm, and that is 
very important to most farmers in this country--the ability to 
determine how to manage their land, how many acres of corn, or beans, 
or cotton, or rice, or whatever the farmer wants to plant, or not to 
plant at all. The AMTA payment comes to a farmer who does not plant at 
all, because this is a transition from the date of supply control to a 
day in which we move into market economics and the farm area more 
completely. The thing the world dictates presently is that market 
economics is the important way to go. Our country testifies to that in 
almost every other debate.
  I hope we will continue to testify in behalf of that when it comes to 
American agriculture.
  I thank the Chair for this indulgence; likewise for other Senators.
  I am hopeful that before action is taken on either of the two 
amendments, there will be testimony by the Secretary and then very 
thorough analysis by each Senator as to what our obligations should be 
to American agriculture both to encourage and enhance it and, likewise, 
that our obligation is to all the taxpayers of the country and the 
other major objectives that lie before our country.
  I thank the Chair.
  The PRESIDING OFFICER. The Senator from Mississippi. Mr. COCHRAN. Mr. 
President, I thank the Senator from Indiana. He has definitely elevated 
the level of discussion on the issue before the Senate by his remarks. 
He has given this debate unusual insight based on his experience and 
his knowledge of the subject and his personal experience as one who is 
engaged in production agriculture in the State of Indiana.
  I think the Senate has benefited from his remarks. I, for one, want 
to congratulate him and thank him for remaining on the floor this 
evening and giving the Senate the benefit of his observations on this 
issue.
  Tomorrow, as he points out, there will be a hearing in the 
Agriculture Committee which could also be very helpful to our further 
understanding of the situation. The Economic Research Service and other 
agencies of the Department of Agriculture could make available to us 
information that would be very helpful and constructive as we try to 
decide what is best in this situation for our farmers around the 
country.
  I don't want to overdue this or guild the lily too brightly. But I 
personally respect the Senator so much--and he knows that --and 
consider him a great friend. I again express my personal appreciation 
for his being here tonight and for his leadership in the agriculture 
area specifically.
  Mr. LUGAR. Mr. President, I thank the distinguished Senator from 
Mississippi, who is my friend and whose leadership I appreciate so 
much.
  Let me inquire of the distinguished Senator from Mississippi if he 
knows of further debate. If not, I make an inquiry because I have been 
asked to substitute for the leader in making motions.
  Mr. COCHRAN. Mr. President, I know of no other Senator who seeks 
recognition on this. I think it would be appropriate to go to final 
wrap-up.
  Mr. LUGAR. I thank the Senator.




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