[Congressional Record Volume 145, Number 126 (Friday, September 24, 1999)]
[Senate]
[Pages S11431-S11432]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRAMS:
  S. 1635. A bill to amend the Agricultural Market Transition Act to 
extend the term of marketing assistance loans; to the Committee on 
Agriculture, Nutrition, and Forestry.


                agricultural marketing assistance loans

 Mr. GRAMS. Mr. President, today I rise to introduce 
legislation extending the term of the CCC marketing assistance loans 
made to producers by Farm Service Agencies from nine months to thirty-
six months. Moreover, my bill grants the Secretary of Agriculture 
discretion to extend the term of a marketing assistance loan for an 
additional nine month period if the Secretary determines the extension 
beyond the thirty-six months would be beneficial to producers.
  This nonrecourse marketing assistance loan program gives farmers more 
bargaining power in the market because they are not forced to sell 
their crops immediately after the harvest. Without the loan program, 
buyers' knowledge that farmers have their backs against the wall 
needing money to repay their bills can force down prices. Prices at 
harvest also tend to be lower due to the ample volume of grains. These 
nonrecourse loans permit a farmer to store the grain for a period of 
time, allowing him the opportunity to sell his crop later when the 
market price might be higher than the harvest price.
  The problem with the current system is that buyers know when the nine 
month loans are coming due, which adversely impacts the marketing 
position of producers. Buyers know that the financial pressure on 
producers is building and they will be forced to take a lower price. 
Extending the term of the loans from nine to thirty six months will 
give the farmers better marketing power because it introduces more 
uncertainty and therefore options to farmers on when the grain will be 
sold.
  I should note that I do not expect farmers to exhaust the full 
thirty-six months to market their grain, or that the Secretary would 
routinely extend that term to 45 months, due to the decline in grain 
quality that would consequently occur. However, I wanted to ensure that 
farmers possess as much flexibility as possible in deciding when to 
market their product.

[[Page S11432]]

  Again, with this bill, I hope to provide farmers with another 
marketing tool to help them get the best price possible on the market. 
Our farm families are hurting, and we must help. In addition to 
introducing this bill, I want to again call upon Agriculture 
Appropriations conferees to complete their work without adding new 
issues. Relief to farmers must be passed as soon as possible.
  Mr. President, I look forward to working with my colleagues on the 
Agriculture Committee to pass my bill in the near future.
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