[Congressional Record Volume 147, Number 130 (Tuesday, October 2, 2001)]
[House]
[Pages H6102-H6103]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SUPPORT A REASONABLE LIMIT ON FARM PRICE SUPPORT PAYMENTS
The SPEAKER pro tempore. Under a previous order of the House, the
gentleman from Michigan (Mr. Smith) is recognized for 5 minutes.
Mr. SMITH of Michigan. Mr. Speaker, tomorrow we will be taking up the
agricultural bill for agricultural programs for the next 10 years.
Farmers are in a predicament right now in terms of low commodity
prices. In fact, some of those commodity prices are the lowest they
have been in 20 years. So we are seeing a lot of farmers go out of
business, go into bankruptcy, especially because the land value for
recreational use, for use by people that want a country estate, is
bidding up those land values far more than can be accommodated by
current commodity prices for those farm products those farmers are
producing.
The question this Nation is facing is do we want to maintain a strong
agricultural industry in the United States so that we do not have to be
dependent on importing our foodstuffs, our feed, our food, like, for
example, we have in energy. We have increased our dependence on
petroleum energy to the extent that if OPEC and those countries that
send petroleum energy to this country decided to cut off that available
supply, we would at least temporarily see our economy collapse, because
right now, we are importing almost 58 percent of our total energy
supplies. I think it is important that we do not let that happen to
agriculture.
Tomorrow, I have an amendment on the agricultural bill that I think
will reduce some of the criticism that some Members in this Chamber
have of the agricultural farm programs and the payments, Federal
payments, the subsidy payments that are made to agriculture. That
amendment puts a real limit on how much any one farmer can receive from
Federal Government programs in terms of price-support subsidy.
Right now, the limit for price supports is said to be $150,000 per
year per farmer. Actually, it is a hoodwinking to suggest that there is
a limit, a real limit of $150,000, because what we have in farm
programs, and it is somewhat complex, but in price supports, there are
four ways that a farmer can achieve the benefits of the price-support
program: one is loan deficiency payments; the second is marketing
loans; the third is derived from a nonrecourse where the farmer can
take out a loan on the commodity and give the Government title to that
commodity and receive the same benefits as if they were getting an LDP
or a marketing loan. So what they do is an end run, if you will, around
the $150,000 limitation, and that $150,000 limitation is reasonable in
terms of the acreage that any normal family farm in this country
produces.
Let me give my colleagues an example. The average farm in this
country is approximately 500 acres in size; but $150,000, based on the
last 2 years, one would need to have 6,000 acres of corn, 6,200 acres
of soybeans, and 17,000 acres of cotton and, likewise, 1,300 acres of
rice to accommodate that limitation of $150,000. Yet, our technical
language of this farm bill that we will be taking up tomorrow says any
farmer that is big enough, and there are 30,000-, 40,000-, 80,000-acre
farms; in fact, in Florida, there is one landowner that owns 130,000
acres, receiving over $1 million in government benefits.
My amendment that I hope this body will consider tomorrow sets a real
limit by saying it is not only loan deficiency payments and marketing
loans, but it includes limitations on the benefits from certificates
and forfeitures from that nonrecourse loan. It is reasonable. It saves,
according to the CBO, $520 million over the life of this farm program.
That money would be better spent with the kind of farmers that need the
help most, and that is the average family farm in this country.
Support a Reasonable Limit on Farm Price Support Payments
(The Associated Press reported recently that over 154 individuals
received more than $1 million in farm aid last year! Limit massive
government payments to the largest recipients--Vote for the Smith/
Clayton/Holden/Armey/Shays/McInnis payment limitation amendment to the
Farm Bill!)
Dear Colleague: Over the years, Congress has established
caps on the amount of money a producer can receive from
federal farm program price supports. Unfortunately, these
payment ``limits'' on loan deficiency payments, LDPs, have
easily been avoided by the unlimited use of commodity
certificates, which give the farmer the same dollar benefit
as an LDP. In fact, a CRS report on commodity certificates
stated that, ``while purported to discourage commodity
forfeitures, certificates effectively serve to circumvent the
payment limitation.'' (CRS Report 98-744 ENR)
My amendment would establish a REAL PAYMENT CAP by
including commodity certificates among the methods of price
support that are limited. The Congressional Budget Office has
scored this amendment as saving $528 million over the life of
the Farm Bill.
The limitation in this amendment will only affect the very
largest of recipients. For instance, the average acreage it
would have taken to reach this limit in the last two crop
years was over 6,000 acres of corn and soybeans, 1,950 acres
of cotton, and 13,000 acres
[[Page H6103]]
of wheat and 17,000 acres of rice! Note: The average U.S.
farm size is 450 acres.
The Bush Administration recently released a report, Food
and Agricultural Policy: Taking Stock for the New Century,
that clearly refers to the flaws with current farm price
supports, stating, ``Past attempts at tailoring or directing
benefits to particular groups have not proved very successful
. . . payment limits to individual farmers have not proved
effective.'' This is because of the loophole allowing farmers
to keep the equivalent loan benefit and forfeit the crop.
Difficult future budget decisions, coupled with the
increased press scrutiny of farm price support programs, may
threaten to reduce the continued strong public support for
American agriculture. Setting a real limit on farm payments
will help to maintain this support, and save taxpayers $528
million dollars!
Please consider cosponsoring and speaking in favor of this
amendment on behalf of the American family farmer.
Sincerely,
Nick Smith,
Member of Congress.
____________________