[Congressional Record Volume 146, Number 10 (Tuesday, February 8, 2000)]
[Senate]
[Pages S483-S485]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
``DON'T BE DOWN ON THE FARM''
Mr. DASCHLE. Mr. President, last week I joined several of my
Democratic colleagues at a hearing on the agriculture crisis that is
forcing many family farmers out of operation. We heard a number of
witnesses tell compelling stories about how the 1996 ``Freedom to
Farm'' Act has failed them and their communities.
Lori Hintz, a registered nurse and farm wife, talked about the impact
of the '96 farm bill on her community in Beadle County, South Dakota.
She emphasized that farmers are not the only ones in her area that are
struggling.
When farm prices are depressed in a rural community--like they are in
Lori's--small businesses, health clinics and schools also feel the
pinch. Lori spoke eloquently about the urgent need to invest in rural
communities and promote a healthy farm economy, thereby reducing out-
migration and preserving the way of life that built and still defines
the Midwest.
I believe I speak for all Democratic Senators who participated in
last week's hearing when I say that the testimony presented by each
witness was both powerful and thought-provoking. That testimony only
strengthened our determination to address the agriculture crisis facing
this country.
Few people have a better appreciation for the problems confronting
our family farmers, and for what we in the Senate need to do to fix
those problems, than my close friend and colleague, Senator Byron
Dorgan. Senator Dorgan has stood throughout his public career as an
effective and tireless advocate for America's family farmers and
ranchers, and his perspective on the economic difficulties felt by many
rural residents merits the undivided attention of policymakers in
Congress and the Administration.
Today, I would like to express my gratitude and appreciation to
Senator Dorgan for an article published in a recent edition of the
Washington Monthly that presents a poignant and persuasive argument for
the family farm. I commend this article, entitled ``Don't Be Down on
the Farm,'' to my colleagues' attention.
Senator Dorgan knows this topic as well as anyone. We have all
learned from Senator Dorgan's entreaties, many of which have been
delivered in this chamber, about the economic challenges facing the
people to whom we entrust the safe and abundant production of our
nation's food and fiber supply. We have listened to Senator Dorgan's
impassioned oratory about conditions in rural North Dakota, and how the
economic survival of many communities in his state depends on
successful family farms. His words resonate deeply in me, because they
often evoke similar scenarios in my state.
In his article, Senator Dorgan makes a number of important
observations--things we know to be true, but that too often are
recklessly discounted in the crafting of farm policy. He reminds us of
the proven efficiency of family farms, and how viable family farms
translate into robust, successful communities. He also asks a question
to which we still have not received a persuasive answer. What does
society gain by replacing family farms with corporate farming
operations?
Senator Dorgan also reminds us of the social costs that we may all
have to bear for the emergence of corporate agriculture, including the
challenge of waste disposal, the threat of related environmental
degradation and the loss of a valued way of life.
Finally, Senator Dorgan asks whether we will take steps necessary to
ensure the survival of family farms and ranches for the future. That is
a question of interest to many members in this chamber, and one to
which we simply must find the right answer.
The eloquence and urgency of Senator Dorgan's message reinforces the
views of the many Senators who want to secure a strong future for our
country's family farms. I appreciate both the effort and conviction
evident in the article, and thank Senator Dorgan for his commitment to
this vital issue.
I ask unanimous consent that Senator Dorgan's article be printed in
the Record.
There being no objection, the article was ordered to be printed in
the Record, as follows:
[From the Washington Monthly, Sept. 1999]
Don't Be Down on the Farm
What we can do to preserve a national treasure
(By Senator Byron Dorgan)
A Traveler through Western Europe these days observes
something unusual to American eyes. Family-based agriculture
is thriving there. The countryside is dotted with small,
prosperous farms, and the communities these support are
generally prosperous as well. The reason, of course, is that
Europe encourages its family-scale agriculture, while America
basically doesn't care. The difference was apparent at the
World Trade Organization meetings in Seattle. The European
representatives were talking about families and communities,
while the Americans talked about markets. You listen to the
speeches, as I did, and a question looms up in your mind. If
American trade representatives think these European values
represent the problem, just what do they think represents the
solution? If prosperous rural economies are not a worthy goal
then what is?
The question is of great urgency among U.S. farmers these
days. Out beyond the prosperity of Wall Street and Silicon
Valley, the producers in America's food economy are
struggling for survival. The weather has been miserable.
Prices for some commodities are at Depression-era levels.
Imports are soaring, and giant agribusiness firms are
squeezing out farmers for a bigger share of the food dollar.
In this setting, farm auctions have become a grim daily
counterpoint to the Wall Street boom.
The stories are wrenching beyond description. I received a
letter from a woman whose son refused to get out of bed the
day the family farm was auctioned off. His dream was to
become a farmer like his dad, and he couldn't bear to watch
that dream get sold off by a bank. Suicides among farmers are
now three times the rate of the nation as a whole. One Iowa
farmer left a note that said, ``Everything is gone, wore out
or shot, just like me.''
Many in the opinion class offer an obligatory regret and
then wonder why we should care. Family farmers are just
poignant footnotes to the bright new economy, they say, like
the little diners that got left behind on Route 1 when the
interstates came in. ``The U.S. no longer needs agriculture
and is rapidly outgrowing it,'' said Steven Blank, an
economist at the University of California at Davis. In his
view, farms, like steel mills and television factories can
move to low-cost climes abroad, and should. ``It is the
improvement in the efficiency of the American economy.''
Most express themselves in more diplomatic terms. But
that's basically the expert view. An economy is just a
mathematical equation and efficiency, narrowly defined, is
the ultimate value. If family-based agriculture disappears,
so be it. This view isn't just distasteful. It is
shortsighted and wrong.
The fact is, family-based agriculture is not unproductive
or inefficient, even by the narrow calculus of the economies
profession. (I'll go into that a little later.) First off, if
we care about food, we will not welcome an economy in which
control of the food chain lies in a few corporate hands.
Monsanto-in-the-Fields is not everyone's idea of the food
economy they want. But the basic issue here goes far beyond
food. It speaks to us as citizens rather than just as
shoppers; ultimately it concerns the kind of country we are
going to be. The family farm today is a sort of canary in the
mine shaft of the global economy. It shows in stark terms
what happens to our lives, our communities, and our values
when we prostrate ourselves before the narrow and myopic
calculus of international finance. So doing, it raises what
is probably the single most important economic question
American faces: What is an economy for?
For decades the nation has listened to a policy
establishment that views the economy as a kind of ``Stuff
Olympics.'' The gold medal goes to the nation that
accumulates the most stuff and racks up the biggest GDP.
Enterprise is valued only to the extent it serves this end.
But what happens when we produce more stuff than we need but
less of other things, such as community, that we need just as
much? Do we continue our efforts to produce more of what we
already have a glut of? Or do we ask a different question? If
Americans say we need stronger families and better
communities, then we need to question whether our economic
arrangements are contributing to those ends. If we really
believe in traditionally family values, then should we not
support the form of agriculture--and business generally--
based upon those values?
There's a way to save our family-based agriculture. Harry
Truman had the answer more than fifty years ago. Put simply,
Truman wanted to confine the agricultural support system to
the family-sized unit. This
[[Page S484]]
would promote a modern and productive farm economy and
healthy rural communities too. It would begin to align our
economic policies with our traditional family values and
social ideals. But in order to see the value of this
approach, we have to put off the mythologies and ideological
blinders that dominate the debate today.
Over The Edge
These mythologies start with the assumption that the
struggles of family farmers are Darwinian proof of their own
unfitness to survive. The fact is, family farmers are in a
bind today because of deliberate actions and inactions here
in Washington. An impartial market didn't decree their
difficulties. Policy makers did. Yes, there has been lousy
weather, an expensive dollar, and the collapse of crucial
markets in Asia. These come with the territory. Since the New
Deal, the federal government has sought to help farmers get
through such tough times.
What's different now is that government has tried instead
to push family-based producers over the edge. The push
started with the trade agreements that opened the U.S. wide
to foreign production. Advocates of NAFTA and GATT promised
American producers vast new markets, yet today America's
trade deficit has reached record levels, and the balance of
agricultural trade is heading in the same direction. You need
that right. The coal is pouring into Newcastle. By the
sublime logic of the global economy, a nation that has
depressed prices of durum wheat is importing durum wheat,
fruit, poultry, and meat as well.
This did not happen because American farmers are backward
or inefficient. It happened because of a high dollar, which
works against exports; and because American trade negotiators
have been more attentive to the needs of corporate food
processors than to the farmers who grow the food. The U.S.
trade agreement with Canada is a prime example. Before that
agreement the U.S. imported virtually no durum wheat from
Canada. (Durum is the kind used in pasta.) The U.S. trade
representative at the time, Clayton Yeutter, assured Congress
in writing that the agreement would have no effect on grain.
Yet durum was pouring across the northern border almost from
the moment the agreement took effect. Today, Canadian imports
comprise nearly 25 percent of U.S. processed durum. These
imports nearly doubled in the first five months of 1999
alone.
Some call this the Invisible Hand. But it has a lot more to
do with something called the Canadian Wheat Board, a
government agency that handles every bushel of wheat produced
in Canada. The Wheat Board publishes no price information, so
the workings of the Canadian market are inscrutable to U.S.
farmers. There are subsidies for grain handling and
transportation that give Canadian producers a further edge.
Canada is not an exception. Most nations try to protect their
own food production, and understandably so. They have long
memories of wars that made food a precious commodity; and as
true conservatives they value their rural traditions and
cultures.
So tough luck you say: The consumer is king, and cheap
imports mean low prices at the supermarket. This degradation
of the producer was not what Jefferson and others had in mind
when they founded our republic. But that aside, if you think
the farmer's travail has been the consumer's gain, you might
check your local supermarket. Somehow, those Depression-level
prices on the farm haven't shown up on the bar codes. Prices
of hamburger and bread have inched up, even as farm prices
have plummeted.
Someone is getting the spread, and that someone is the food
processing and packing industry, which has scored big off the
misery of U.S. farmers. The big four cereal manufacturers
have returns on equity of upwards of 29 percent even as
farmers go bankrupt. From a loaf of bread that costs $1.59 at
the store, the wheat farmer gets about five to six cents. In
1981 the wheat farmer got about double that. The processors
can reap where the farmer sows, in large part because the
industry has become so concentrated in recent years. When
Ronald Reagan become president, the top four beef processors
controlled about 36 percent of the market. Today the figure
is over 80 percent. A wheat farmer today is dealing with a
grain industry in which the top four firms control 62 percent
of the business. This means a marketplace with the power to
say, ``take it or leave it.''
The antitrust laws are supposed to prevent this kind of
bullying. But decades of erosion at the hands of
ideologically-disposed economists and judges have reduced
these laws to mere ``husks of what they were intended to
be,'' as the late Justice Douglas put it. Moreover, budget
cuts during the Reagan-Bush years crippled antitrust
enforcement just as the current merger wave was gaining
momentum. Even after modest increases under Clinton, the
antitrust budget has fallen in real terms since the late
1970s. The Microsoft trial has gotten a lot of headlines. But
when Cargill, the nation's number one grain exporter and the
largest privately-held company, can buy the grain operations
of Continental, which is number two, with barely a peep from
Washington, then the cops aren't exactly walking tall on the
antitrust beat.
There is a pattern here. The U.S. government has undertaken
to remake the world in the image of the multinational
corporation--an image in which all economic problems get
reduced to mathematics. Family-based production has stubborn
loyalties to locality and place. It provides a buffer against
the ruthless--and often misleading--mathematics of the
market. Therefore the government seeks to engineer it out of
existence and to replace it with the corporation that has no
such inconvenient human tendencies. This was the implicit
logic of the Farm Bill of 1996.
failing the farms
The Farm Bill of 1996 was touted as a radical break from
the past. Proponents said that it would ``free'' farmers from
the stifling bureaucracy of the federal government and enable
them to make their fortunes in the global marketplace. They
called the bill--with mordant irony--the Freedom to Farm Act.
It seemed plausible in the flush times of the mid-'90s. But
the agricultural marketplace soon cratered, and farmers found
out quickly what the bill really left them free to do--Get
Out of Farming Fast.
Put simply, the bill phases out the federal-price support
program over a period of seven years. During that time, it
doles out between $5 billion and $6 billion a year in
transition payments, supposedly to wean farmers off the
federal supports. These go to all agricultural entities,
regardless of size and regardless of need. The bigger you
are, the more you get--no matter how much money you have
sitting in the bank.
It sounds like a parody of a government program. Yet that's
how the bill works--or, more accurately, doesn't work. A year
after the bill took effect, Congress was enacting
``emergency'' relief to help undo the damage it had just
done. Congress just enacted another emergency measure this
year. There is no end in sight. Congress buys a little quiet
while the nation's family-based producers twist slowly in the
wind.
community matters too
From the time Franklin Roosevelt established the first
farm-support programs during the Depression, a central
question has gone unresolved: What is the farm program really
for? People in Washington have always wrung their hands over
hard-pressed family farmers. But the programs they've enacted
have favored the biggest farmers and hastened the demise of
the smaller ones. In its many permutations, the farm program
has proceeded on the assumption that the mode and scale of
production don't matter, and all that counts is a given
quantity of beef or grain. This view dominates the policy and
media establishments and the result is a facile cynicism
regarding efforts to help the family-based producer. We need
to reexamine this assumption. The embrace of text-book
orthodoxies tends to blind reporters to economic reality, and
to the social dimension of economic enterprise.
In reality, a family-based enterprise such as a farm
produces much more than corn or wheat. It also produces a
community. One might say it has a social product as well as a
material product. This social product is invisible to
economists and policy experts because they see only what they
can count in money. But it is crucial in a nation that has
more stuff than it knows what to do with but less community
and stability than it needs.
This is not rural romanticism. I'm talking about the
opposite--the ways that family-based enterprise provides a
matrix for community life. A small town cafe, for example,
contributes much more to the life of a rural community than
its financial balance sheet would suggest. It is a hub of
social interaction, a crossroads where people meet in person
rather than just as blips on a computer screen. It serves to
reinforce the formal organizations in the town, from the
volunteer fire department to the PTA. Cafes are so
important to small-town life that in Havana, North Dakota,
(pop. 124) folks actually volunteer at the local cafe to
keep it open.
Family-based agriculture is a prolific source of social
product. Study after study has documented this effect. The
most famous was that of Walter Goldschmidt of the University
of California, comparing two California farm communities in
the 1940s. One was comprised of small and medium sized family
farms; the other of large scale producers. The localities
were similar in other significant respects. Goldschmidt found
that the family farms produced a measurably stronger social
unit. People showed ``a strong economic and social interest
in their community. Differences in wealth among them are not
great, and the people generally associate in those
organizations which serve the community.'' The locality with
larger farms, by contrast, had a more pronounced class
structure, less stability, and less civic participation.
This will come as no surprise to people who grew up in such
settings. The family and community values that people give
speeches about in Washington are a fact of daily life. I
remember a farmer in my home town of Regent, North Dakota, a
fellow named Ernest, who had a heart attack around harvest
time. His neighbors took their combines and harvested his
grain. The economics textbooks call these farmers
``competitors,'' and if they were corporations they would
behave that way. But because they are real people they acted
like neighbors and friends.
The social dimension of enterprise is crucial even in
conventional economic terms. Francis Fukuyama, the respected
writer on social dynamics, developed this subject in his book
Trust. ``Virtually all serious observers understand,'' he
wrote, ``that liberal political and economic institutions
depend on a healthy and dynamic civil society for their
vitality.'' Society needs enterprise but enterprise also
needs a society.
[[Page S485]]
Jefferson was right. The kind of agriculture we choose
affects the kind of communities we have and the kind of
nation we are going to be. A nation that tries to divorce the
processes of production from larger social concerns--as
policy experts do--eats its own seed corn. Neglect the social
product of private enterprise, and we create the conditions
for our own decline.
small farms are efficient
Against this, we have to ask what's to gain by displacing
family-based farming with corporate agribusiness firms. The
answer is, very little.
The supposed efficiency of corporate-scale operations has a
large dose of hype. Farms can reach peak efficiency at well
within the range of a family operation. Michael Duffy, an
agricultural economist at Iowa State University, has found
that corn and soybean producers in that state reach the low
point on the production cost curve at between 300 and 500
acres. The top 10 percent of pig producers, based on cost of
production, averaged 164 sows.
Wheat farmers reach lowest costs at a somewhat larger
scale, but still well within a family-sized operation. The
belief that bigger corporate operations mean more productive
agriculture is just a ``bunch of crapolla,'' Duffy says.
The claims of efficiency, moreover, ignore the costs that
sprawling agribusiness operations impose upon the rest of us.
Partly these costs are social. When there are no neighbors to
drive Aunt Ella a hundred miles to the clinic, she has to use
a taxpayer-funded van instead. But the biggest costs may be
environmental. Corporate pig factories, for example, have
become a nightmare for their neighbors. They foul local water
supplies and emit a colossal stink into the air.
A county in Illinois actually had to reduce property
assessments by 30 percent in the vicinity of such a plant. In
North Carolina, which has emerged as a pig factory haven in
recent years, Hurricane Floyd caused massive flooding of the
huge lagoons that hold the wastes. The sludge spread over the
countryside and leached into the groundwater. Residents were
advised to drink bottled water and even to have their wells
redrilled. That might be efficiency for the corporation. But
it's not for the neighbors, nor for the society as a whole.
I see an economist scowling in the back row. If people want
social product, he mutters, then they would demand it in the
market.
But that's precisely the problem. Americans can't speak
through the market unless the market gives them an effective
choice, and under current arrangements they don't have one.
When we buy pasta or pork chops at the supermarket there's
nothing on the label to tell us the kind of farm it came
from.
Markets are the best means we have for allocating
resources, when people have both information and choices and
when all costs are accounted for. But they don't work so well
when information and choice are lacking the costs get shifted
into others, and that's what happens with agricultural
production today. Farmers aren't getting full compensation
for their production, including social product. They should.
The question is how.
the brannan plan
After his improbable reelection in 1948 President Harry
Truman introduced a farm bill that had a truly far-sighted
provision to limit federal farm supports to the family-sized
unit. Farmers could become bigger if they wished. They could
produce as much as they thought they could sell. But they
couldn't expect the federal government to support all their
ambitions.
The Brannan Plan as it was called--after then Secretary of
Agriculture Charles Brannan--would have made it the policy of
the United States that scale and social impact matter, in
agriculture at least. Not surprisingly, the larger farm
interests opposed the Brannan Plan (thought mostly on other
grounds) and it died a quick legislative death.
In the 50 years since, the farm program has gone from one
extreme to the other--from supporting everything in sight to
hitching the nation's farmers to a market ideology in a world
that doesn't always buy it. We've shed crocodile tears over
family farmers while promoting their demise. Now the
congressional majority is in a quandary. Republicans know
they have to do something. But many on that side can't bring
themselves to face the implications. So they heap more blame
on government, rail at the Federal Reserve Board and the
government's failure to open more foreign markets, and hope
the problem will just go away.
To be sure, the Federal Reserve Board is a deserving
target. When you hand the management of the economy over to
money center bankers, then farmers, who rely heavily on
credit, are going to get shortchanged. But it's not enough to
rail at the Fed. We need to put someone on the Fed who
understands the value of family-based farms and who can
provide some balance to the economists and bankers who run
the place now.
It is good too that Republicans want to open up foreign
markets, but we've also got to develop new domestic markets.
Since people can eat only so much, that means new uses for
farm products. Ethanol barely scratches the surface. There
are many materials, from plastics and building materials to
paper and inks, that are being made from crops. In Minnesota,
farmers are getting from $20 to $50 an acre for selling the
right to capture the wind energy from their land. David
Morris of the Institute for Local Self Reliance has sketched
out the possibilities in a report called, suggestively, ``The
Carbohydrate Economy.''
Farmers need more bargaining power in the market too, not
just more points of access to it. Senator Paul Wellstone of
Minnesota and I have proposed a moratorium on mergers in
agriculture-related industries, and a complete review of the
antitrust laws as they affect this part of the economy. The
measure failed to pass this fall, but we will introduce it
again.
But by far the most important issue is the economic safety
net. No matter what else you do, farmers are going to
confront bad years. There has to be a support structure of
some kind, and it should advance the social values of this
country rather than undermine them. Harry Truman had the
right idea. There should be a support price for an amount of
production that is within the range of a family-scale
operation. (This would vary by crop and region of the
country, of course.)
Beyond that, producers would be on their own. If they
wanted to exceed the support range and take their chances in
the world market, then more power to them. But we wouldn't
ask the taxpayers to support a scale of operation from which
there is no social benefit and for which there is no economic
need.
This approach would not encourage overproduction, since
there would be built-in limits on the amount of production
that was supported. The caps would be enough to sustain a
family-sized operation in bad years, but they would not make
anyone rich. This approach would begin to compensate farmers
for their contribution to rural communities--a form of
production for which the global market provides no monetary
return. It would recognize that the efficient destruction of
community in America is not the kind of efficiency the
government should encourage.
If this country can subsidize a public-housing program for
millionaire athletes and billionaire owners called pro-sports
stadiums, then surely it can provide a safety net for the
family-scale agriculture that contributes so much to this
nation. Anyone who thinks big corporations are less likely
than small enterprises to ask for government help hasn't been
paying much attention. Big companies, not little ones, get
bailed out in America. Already, the corporate pig factories
in North Carolina have asked for millions of dollars from
Congress to help upgrade their waste lagoons.
An economy is supposed to provide for human need. At a time
of material abundance but social scarcity, shouldn't we
encourage forms of enterprise that meet the needs of our
dwindling communities? If we truly believe in traditional
family values, shouldn't we support the forms of enterprise
that embody those values, including the family farm?
The crisis in the Farm Belt is one problem America knows
how to solve. We have both the means and the resources; the
question is whether we will use them.
____________________