[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.

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