[Congressional Record Volume 146, Number 94 (Wednesday, July 19, 2000)]
[Senate]
[Pages S7244-S7245]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LUGAR (for himself, Mr. Roberts, Mr. Burns, and Mr. 
        Santorum):
  S. 2894. A bill to provide tax and regulatory relief for farmers and 
to improve the competitiveness of American agricultural commodities and 
products in global markets; to the Committee on Finance.


                THE RURAL AMERICA PROSPERITY ACT OF 2000

  Mr. LUGAR. Mr. President, I rise today to introduce the Rural America 
Prosperity Act of 2000. I am pleased that Senator Roberts, Senator 
Santorum, and Senator Burns have joined as cosponsors of this bill.
  A Republican controlled Congress in 1996 produced a sweeping reform 
of farm programs. Farmers were no longer told by the government what 
crops they had to plant. Farmers were no longer forced by the 
government to idle part of their land. That farm bill disentangled 
farmers from government controls and enabled them to make production 
decisions based on market signals.
  Freeing farmers from excessive, and often counterproductive, 
government controls is an important step, but we should do more to give 
farmers the tools they need to succeed. Specifically, we need to work 
to open foreign markets for our agricultural commodities and products, 
ease the tax and regulatory burden, and provide new risk management 
tools for farmers.
  There are three tax provisions in this legislation that I have long 
advocated as crucial to the financial health of farmers. First is the 
repeal of the estate tax. A repeal of this tax, which has prevented 
some farms from being passed from one generation to the next, is 
essential. We are proposing the same 10-year phase-out of the estate 
tax which Congress just passed, and the President has promised to veto. 
Excluding capital gains from the sale of farmland would put production 
agriculture on the same footing as homeowners who benefit from a 
capital gains exclusion for their home. The deduction of health care 
insurance costs is needed for farmers and others who are self-employed.
  Recently Congress provided over $8 billion to improve the federal 
crop insurance program. While crop insurance is an important risk 
management tool, today we offer two other risk management tools for 
farmers--income averaging and FARRM accounts. Two years ago Congress 
made income averaging a permanent risk management tool for farmers when 
calculating taxes. Unfortunately, the interaction between income 
averaging and the alternative minimum tax has prevented many farmers 
from receiving the benefit of income averaging. This bill fixes that 
problem. Under this bill, farmers will be able to contribute up to 20 
percent of annual farm income into a FAARM account and deduct this 
amount from their taxes. This is an excellent tool for managing 
financial volatility associated with farming.
  We also address regulatory reform in our bill. We are seeking a 
review of existing and proposed regulations to determine the cost of 
compliance for farmers, ranchers and foresters. We want to determine if 
there are more cost-effective ways for farmers, ranchers and foresters 
to achieve the objectives of these regulations.
  Finally, we must do more to help develop new markets abroad for our 
farm commodities and agricultural products. Opportunity lies in 
developing

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countries where growing wealth allows for increased demand for meat and 
processed commodities. Authorizing fast-track authority for the 
President to negotiate international trade agreements may be the single 
most important thing we can do to facilitate exports.
  We also need to address sanctions. Sanctions that prohibit the export 
of U.S. agricultural products into the sanctioned country are often 
morally indefensible because they deny necessities to people, not the 
offending government. Such sanctions also deny markets for U.S. 
agricultural products which are then captured by our competitors.
  This legislation represents what I believe is necessary to further 
the historic reforms initiated in the farm bill 4 years ago. I urge my 
colleagues to cosponsor this bill. I will continue to encourage my 
colleagues and the Administration to work to enact these proposals.

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