[Congressional Record Volume 146, Number 100 (Thursday, July 27, 2000)]
[Extensions of Remarks]
[Page E1337]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       FAMILY FARM SAFETY NET ACT

                                 ______
                                 

                           HON. EARL POMEROY

                            of north dakota

                    in the house of representatives

                        Wednesday, July 26, 2000

  Mr. POMEROY. Mr. Speaker, today, I am pleased to join Representative 
David Minge of Minnesota in introducing the Family Farm Safety Net Act. 
The Family Farm Safety Net Act is designed to permanently extend the 
availability of marketing assistance loans, raise the loan rates of all 
commodities and make the loan rates more equitable with each other. 
This legislation, which is supported by the National Farmers Union, the 
North Dakota Farmers Union, and the National Barley Growers 
Association, will go a long way in providing additional assistance to 
our nation's family farmers.
  As we all know, our nation's federal farm policy has been a disaster, 
mostly because of its removal of a price safety net to protect our 
nation's farmers in times of low prices and bad weather. In many ways, 
the Northern Plains and especially my home State of North Dakota 
represents ground zero in the farm crisis, having experienced the twin 
evils of production loss caused by severe weather and rockbottom 
commodity prices.
  In 1996 when Congress passed Freedom to Farm, farm prices were at 
near record highs. In 1996, wheat was $4.30 per bushel, soybeans were 
at $7.35 per bushel, and corn was $2.71 per bushel. Total net farm 
income for 2000 is projected to be only $40.4 billion, nearly $14 
billion below what it was in 1996. And, according to the University of 
Missouri's Food and Agricultural Policy Research Institute (FAPRI), by 
2009, net farm income will fall to $37 billion if the current farm 
program is not changed. Moreover, in 2000, direct government payments 
through the form of Agricultural Market Transition Act (AMTA) payments 
and market loss assistance payments will be more than $16 billion, 
nearly 40 percent of total farm income.
  I opposed this legislation because of my fear of exactly what we are 
seeing now--the abysmal collapse of commodity prices and the lack of a 
safety net to protect farmers. At the time, opposing Freedom to Farm 
was not a politically popular position. Many believed that the 
opponents were afraid of change and not willing to allow the farmer to 
take advantage of the free market. Today, 4 years after its passage, my 
fear has come true. Wheat is now selling at $2.54 per bushel--a 40 
percent drop in price. Corn is now selling at $1.36 per bushel--a 50 
percent drop in price, and soybeans are now selling at $4.82--a 34 
percent drop in price.
  Our legislation is quite simple. It raises the loan rate levels of 
all commodities by making the loan rates more equitable and extends the 
lengths of the terms of the loan period from to 9 to 20 months. Our 
legislation restores a price safety net by creating loan rates that are 
more reflective of producers' costs of production and by providing 
producers with more time to best determine when to sell their grain in 
today's volatile market.
  Under our legislation the loan rate for wheat, which is the largest 
commodity grown in North Dakota, will be raised from $2.58 per bushel 
to $3.40 per bushel. Through this increase in the loan rate for wheat, 
North Dakota's family farmers will see an average of nearly $19 per 
acre more in a loan deficiency payment (LDP) for their wheat. And, if 
the Family Farm Safety Net were law during the 1999 crop year, North 
Dakota wheat producers would have received an additional $200 million 
in LDPs.
  This legislation makes the loan rates for all the commodities more 
comparable to each other. Under the current farm bill, the loan rate 
for soybeans is $5.26 and the loan rate for wheat is only $2.58. This 
distortion in loan rates is causing the market to become distorted 
because many producers are being forced to grow soybeans as their only 
hopes of ``breaking even.'' As a result of this distortion in loan 
rates, soybean acreage in the United States has grown more than 10.5 
million acres to all-time record of 73.1 million acres since the 
passage of the farm bill. No other example of this is more evident than 
in my home State of North Dakota where soybean acreage has grown by 
more than 100 percent since the passage of the farm bill.
  As Congress begins to consider alternatives for its next farm bill, I 
believe the Family Farm Safety Net is the right step to provide a 
safety net for America's producers who have suffered so severely the 
last four years. I look forward to working with my colleagues on our 
efforts to assist our nation's family farmers.

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