[Congressional Record Volume 147, Number 171 (Tuesday, December 11, 2001)]
[Senate]
[Pages S12837-S12853]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




AGRICULTURE, CONSERVATION, AND RURAL ENHANCEMENT ACT OF 2001--Continued

  Mr. BINGAMAN. Mr. President, I start by thanking Senator Harkin for 
his hard work on this farm bill. I know he has a difficult task pulling 
people together to craft a bill. As chairman of the committee, he and 
his staff need to be complimented for the fine work they have done on 
the bill. It is important legislation for farmers in New Mexico, and I 
hope the Senate can move ahead to complete action on the farm bill.
  The bill has several provisions important to my State. I thank the 
chairman for working with me on those. I also thank Senator Harkin for 
the strong efforts he has made to improve the conservation programs in 
the bill which are particularly important to my State.
  However, all that being true, I wish to express a serious concern 
about the dairy provisions in the bill. As I understand it, the 
substitute bill creates a totally new dairy program. I believe the new 
dairy scheme in the bill is wrong for the Nation's dairy farmers and 
wrong for consumers as well. That is why I support Senator Crapo's 
amendment to strike this provision and to instead have a study to 
determine which, if any, of the proposals that are currently floating 
in the Senate ought to be considered in the future.
  I do appreciate the effort that Senator Harkin and Senator Daschle 
and others, as well as our staffs, have made to come up with a balanced 
dairy policy. The latest version I have seen is a dramatic improvement 
over previous versions, and I appreciate that.
  My State of New Mexico is the 10th largest dairy producing State and 
one of the fastest growing dairy producing

[[Page S12838]]

States. Dairy production in my State has grown 200 percent in the past 
10 years. We have large, efficient dairies which are clearly the big 
losers under this latest proposal. These are family-owned dairies, just 
as in other States. They are larger in my State because we have the 
land and the resources to support those larger dairies.

  Because the latest version of the proposal has only been available a 
few hours, we do not know the full impact on milk prices and dairy farm 
income. However, I think it is fair to say that the legislation clearly 
favors certain regions and certain sizes of farms. Moreover, we do not 
know what the real impact will be on future production rates, prices 
the farmers receive for their milk, and nobody has had time to do 
proper analyses to consider all the complex ramifications of this 
dramatic change in policy.
  We just received a very preliminary analysis of the new proposal. The 
analysis compares the subsidies to farmers in terms of Federal payments 
per hundred pounds of milk produced, and our analysis shows that States 
in the Northeast would receive on average a Federal payment of more 
than $2 per hundred pounds of milk. Farmers in my State would receive 
40 cents, five times less than the Federal payments to farmers in the 
Northeast.
  Based on this analysis, my State of New Mexico would be 50th out of 
50 States in Federal payments per hundredweight. Arizona, Florida, 
Wyoming, California, Idaho, and Washington State would all receive less 
than $1 per hundredweight. Farmers in Georgia, North Carolina, Rhode 
Island, Louisiana, Oregon, and Arkansas would receive half as much as 
farmers in Northeastern States.
  Mr. President, I ask unanimous consent that a table prepared for my 
office by Mr. Ben Yale be printed in the Record at the conclusion of my 
remarks. This table shows the Federal payments per hundred pounds of 
milk produced in each State. The table is based on the preliminary 
analysis performed by the Independent Food and Agriculture Policy 
Research Institute.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. BINGAMAN. Mr. President, I do not know of any other farm program 
that favors one region to this extent and has such a dramatic disparity 
in the use of taxpayers' dollars. In this case, one region will receive 
25 percent of the Federal payments, though it produces less than 18 
percent of the Nation's milk. Moreover, in one region, farmers are 
guaranteed a price of nearly $17 per hundredweight, while prices 
elsewhere are based on market rates and undoubtedly will be 
substantially lower.
  In my view, this is not a balanced program. In addition, I am 
concerned that indirect payment schemes, such as that proposed here, 
would distort the market by encouraging overproduction. I know that is 
a point the Senator from Idaho made in his remarks. Overproduction 
drives down the prices that farmers receive for their milk. When there 
is overproduction, the Government will step in and purchase surplus 
dairy products in the form of cheese, butter, and nonfat dry milk.
  We simply have not had the time to digest properly the dramatic new 
proposal and to make sure we know the implications of this new proposed 
scheme.
  I do believe a market-oriented policy that includes a minimum dairy 
price support program and the Federal milk marketing orders is the 
basic approach we need for national dairy policy.
  These are the programs that are currently in place. This amendment 
would simply ensure that these programs continue. I appreciate the 
efforts of the proponents of the new program to develop a national 
policy that benefits dairy farmers everywhere. I do not believe that 
what we have before us does that. I believe we should work toward a 
balanced national dairy policy that is fair to all farmers, not one 
that pits one State against another or one region against others. We 
need a policy that is fair to consumers and processors and promotes a 
market-oriented dairy policy, not a scheme that could dramatically 
affect milk prices and add new layers of Government regulation and 
control.
  I want to continue working with Senator Harkin, Senator Lugar, and 
other interested Senators to ensure we end up with a dairy policy that 
is good for all regions of the country, and I am pleased to support the 
amendment Senator Crapo is offering.
  I ask unanimous consent that a letter from the National Milk 
Producers Federation in support of Senator Crapo's amendment be printed 
in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                           National Milk Producers Federation,

                                 Arlington, VA, December 11, 2001.
       Dear Senator:

                    We're Sticking to Our Principles

       The National Milk Producers Federation has represented the 
     interests of America's dairy farmers for 85 years, and is the 
     only national policy voice for U.S. milk producers.
       During the past two years, through a meticulous, inclusive 
     grassroots outreach process involving dairy farmers across 
     the country, we have developed a set of policy principles to 
     help our members work with Congress in the preparation of the 
     next Farm Bill. From these national ``Principles of 
     Agreement,'' we developed a set of dairy-specific programs 
     which have consistently guided our recommendations concerning 
     the Farm Bill.
       S. 1731 contains many of the programs that our members have 
     identified as being important to them. These programs are 
     national in scope and favorably impact dairy farmers in all 
     regions of the country. They include:
       Extending the Price Support Program;
       Requiring importers to pay their fair share into National 
     Dairy Promotion and Research Programs, as well as removing 
     the sunset provision for the National Fluid Milk Promotion 
     Program;
       Extending the Dairy Export Incentive Program (DEIP).
       Fixing the statutory mandatory inventory and price 
     reporting language to prevent further costly reporting errors 
     by the USDA, and;
       Supporting increased Market Access Promotion (MAP) program 
     funds.
       These same provisions are also contained in the House 
     version of the Farm Bill, and therefore we urge you to 
     support their inclusion in the final version S. 1731.
       It is our understanding that S. 1731 will also contain 
     additional monies for dairy farmers beyond the House version. 
     NMPF supports the authorization of added money as long as 
     those funds are equitably allocated, and do not disrupt the 
     orderly marketing of milk throughout the country. Since 
     ``equitable'' is a relative term, NMPF has established the 
     following principles to help assess whether a new dairy 
     program meets that definition:
       It must be national in scope.
       It must not discriminate between states and regions.
       It must not discriminate between farmers by limiting 
     payments based on herd size.
       It must not cause competitive disadvantages for advantages 
     between dairy farmers.
       It should not increase production to the point where 
     overproduction eventually erodes the farm gate prices.
       As you begin your debate on S. 1731, we urge you to apply 
     these same principles that our dairy farmers are using in 
     considering new programs. Otherwise, we fear that the 
     additional money may do more harm than good.
       We're sticking to our principles and we urge you to do the 
     same!
           Yours truly,
                                                      Jerry Kozak,
                                                President and CEO.

  Mr. BINGAMAN. Mr. President, that letter makes some very strong 
points. The title of the letter is ``We're Sticking to Our 
Principles.'' It says the National Milk Producers Federation 
established the following principles to help assess whether a new dairy 
program meets that definition:
  No. 1, it must be national.
  No. 2, it must not discriminate between States and regions.
  No. 3, it must not discriminate between farmers by limiting payments 
based on herd size.
  No. 4, it must not cause competitive disadvantages or advantages 
between dairy farmers.
  And No. 5, it should not increase production to the point where 
overproduction eventually erodes the farm gate prices.
  On that basis they believe the amendment offered by Senator Crapo is 
the proper course. I urge that course of action on my colleagues.

                               Exhibit 1

                                        ESTIMATED FEDERAL PAYMENT PER CWT
----------------------------------------------------------------------------------------------------------------
                                                                                   Total
                                                          Total production--     government              Rank in
                         State                            2000(1000 lbs) \1\      payments    Rate/cwt     cwt
                                                                                 (millions)              payment
------------------------------------------------------------------------------------\2\-------------------------
Pennsylvania..........................................         11,101,000            283.5      2.5538         1
New Hampshire.........................................            319,000              8.1      2.5392         2

[[Page S12839]]

 
Vermont...............................................          2,756,000             65.7      2.3839         3
Maine.................................................            680,000             16.2      2.3824         4
New York..............................................         12,118,000            281.1      2.3197         5
Maryland..............................................          1,339,000             30.2      2.2554         6
Connecticut...........................................            502,000             10.8      2.1514         7
New Jersey............................................            270,000              5.6      2.0741         8
West Virginia.........................................            272,000              5.6      2.0588         9
Indiana...............................................          2,314,000             46.2      1.9965        10
Montana...............................................            308.000              5.9      1.9156        11
Massachusetts.........................................            412,000              7.7      1.8689        12
Delaware..............................................            172,300                3      1.7411        13
Kansas................................................          1,450,000             24.1      1.6621        14
Ohio..................................................          4,522,000             73.5      1.6254        15
Nevada................................................            471,000              7.6      1.6136        16
Iowa..................................................          3,864,000             62.2      1.6097        17
Illinois..............................................          2,057,000             33.1      1.6091        18
Virginia..............................................          1,921,000             30.7      1.5981        19
Michigan..............................................          5,518,000             87.2      1.5803        20
Kentucky..............................................          1,693,000             26.7      1.5771        21
Wisconsin.............................................         23,186,000            365.6      1.5768        22
Nebraska..............................................          1,201,000             18.8      1.5654        23
Alaska................................................             12,870              0.2      1.5540        24
Tennessee.............................................          1,410,000             21.1      1.4965        25
Minnesota.............................................          9,540,000            141.3      1.4811        26
Missouri..............................................          2,244,000             33.1      1.4750        27
South Dakota..........................................          1,572,000             23.1      1.4695        28
Mississippi...........................................            551,000              7.9      1.4338        29
Oklahoma..............................................          1,269,000             17.5      1.3790        30
South Carolina........................................            368,000                5      1.3587        31
Utah..................................................          1,659,000             22.4      1.3502        32
Georgia...............................................          1,443,000             19.3      1.3375        33
North Carolina........................................          1,207,000             16.1      1.3339        34
Rhode Island..........................................             30,200              0.4      1.3245        35
Louisiana.............................................            711,000              9.3      1.3080        36
Oregon................................................          1,689,000             21.8      1.2907        37
Arkansas..............................................            530,000              6.6      1.2453        38
North Dakota..........................................            702.000              8.7      1.2393        39
Hawaii................................................            116,700              1.4      1.1997        40
Texas.................................................          5,712,000             66.2      1.1590        41
Alabama...............................................            365,000              4.1      1.1233        42
Colorado..............................................          1,841,000             19.2      1.0429        43
Washington............................................          5,595,000             52.9      0.9455        44
Idaho.................................................          6,887,000             61.5      0.8930        45
California............................................         31,604,000            239.5      0.7578        46
Wyoming...............................................             81,300              0.6      0.7380        47
Florida...............................................          2,413,000             17.3      0.7169        48
Arizona...............................................          3,030,000               13      0.4290        49
New Mexico............................................          4,999,000             19.4      0.3881        50
----------------------------------------------------------------------------------------------------------------
\1\ Source: USDA.
\2\ Source: FAPRI Analysis on Scenario D total of 2002-2005.

  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. HARKIN. Mr. President, we are going to move to a vote very 
shortly, and I will be moving to table the Crapo amendment. I am 
constrained to say I am a little, I guess--maybe I do not understand 
where my friend from New Mexico is coming from on this amendment.
  Dairy is important. It is the second largest commodity produced in 
this country at a value of $23 billion, second only to beef. It is 
unique among all commodities because it is highly perishable. You 
cannot store it for long. A dairy farmer has to market it every day, 
regardless of the price. We have had a price support program for dairy 
over 50 years. Since 1949, we have had a price support program.
  We have had market loss payments in each of the last 3 or 4 years for 
dairy. Every year we come in and we pass a market loss payment. On 
three occasions we have done that.
  I would say to my friend from New Mexico and others, we made these 
market loss payments that went out nationwide. The last market loss 
payment that went out went to about 225 cows. That was it. We have put 
$2 billion more into this bill for dairy farmers all over the country. 
We took $500 million for the Northeast, everything west of Maryland, 
Delaware, northeast, to help them transition from the compact they 
have. They need that. Then we took the other $1.5 billion and we spread 
it around the country.
  In working this out, in trying to make a balance between the smaller 
dairy farmers of Wisconsin and Michigan and Minnesota and places such 
as that, and the larger dairy farms in New Mexico and California and 
Idaho, places such as that, where they have these huge dairy herds of 
10,000 cows, we tried to reach some level of balance. So if the market 
loss payments of the last 3 years were to 225 cows, we said, Where 
could we limit it? We went to 450 cows. We doubled, in this bill, the 
payments to dairy farmers on the cap from what it was last year--
doubled it. That means the larger dairy farmers will get more.
  Since we are working with a fixed pot of money, $1.5 billion, the 
more they get, the less someone else gets. So we had to reach some kind 
of balance. Obviously, if we had no caps at all, these large dairy 
farms in the West would get all the money and the dairy farmers in 
Michigan and Minnesota and Iowa and Wisconsin would get precious 
little. So we had to reach some balance.
  Regarding the 450-cow limit we put in, I tell you a lot of Senators 
from the Midwest swallowed hard on it. They think it should be 225, 
where it was last year. We tried to make this balanced, so we raised 
the cap to 8 million pounds annual production, which I think is fair. 
It is equitable. I think it addresses needs all over the country.
  Last, I do not understand what the Senator was saying in terms of New 
Mexico being last in the Nation. Frankly, New Mexico, I think, was 
going to get, in the next 3 years, $10.1 million in payments. As I look 
down the list of States, that is about right in the middle for the 
United States in terms of total payments. It is right in the middle of 
all the States.
  California, I would point out, gets $143 million; New York gets $178 
million; Pennsylvania gets $181 million; Wisconsin, $293 million. These 
are the big milk producing States and they get the most money. I 
understand that. But New Mexico is about right in the middle of all the 
States so I don't understand what he meant about it being last. It 
certainly is not in terms of the amount of money going to the 
individual States.

  If there is no other debate, I was going to say to my friend from 
Idaho that I am prepared to move to table.
  Mr. CRAPO. If the Senator will yield, I am aware of at least one 
other Senator who is trying to come to the floor who wants to say 
something. May we wait for a few minutes to see if he arrives?
  Mr. HARKIN. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. BAUCUS. Mr. President, I ask unanimous consent the order for the 
quorum call be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BAUCUS. Mr. President, I rise to commend the Senate for bringing 
the farm bill to the floor today. For my State of Montana, there is no 
one single issue that is more important than to get the farm bill 
passed this year, particularly a farm bill that makes sense and helps 
address the issues that our producers are facing.
  Producers have faced drought for a couple of years. I must say, if we 
do not get relief in a farm bill passed this year, it is truly a fact, 
I question whether some farmers are going to be able to hang on. It is 
that important.
  I think the farm bill we passed out of the committee is a good bill. 
It is not a great bill, but it is a good step, a good step in the right 
direction. I am pleased we will now have the opportunity to continue 
our negotiations in the Senate Chamber to make the bill as 
comprehensive and as strong as possible.
  We need to support our Nation's agriculture, that is clear--our 
farmers and our ranchers. Other countries support their farmers and 
their ranchers, agriculture in their country, I might add, more 
strongly than we do in ours, and I might add that is not right.
  We have an obligation to help people fend for themselves--those who 
depend upon the weather and who depend upon the market to do a lot 
better job. We cannot wait until the current program expires next year. 
We rely upon producers for our food. We have the lowest food prices in 
the world. We have the most efficient producers in the world. They are 
now relying upon us for survival.
  Our agricultural producers are in as tough shape as I have ever seen. 
Years of very low prices and extreme drought have made it nearly 
impossible for farmers and ranchers to break even. Some areas in my 
State of Montana are experiencing their sixth year of drought.
  This summer, I traveled across the high line--the northern part of 
our State--where a lot of grain is produced. I was astounded, saddened, 
and stunned. I was just sick at seeing the land in such poor shape. 
Some of the grain has barely come up. Most of it is just dust for miles 
and miles. There is no crop because there is no moisture. It is 
devastating. In about a square 2,000 miles of cropland there is 
nothing. We have strip farming in Montana because we haven't had a lot 
of moisture year after year but drought. A large portion of my State is 
as bad as I have seen it. It is worse, in my judgment, than the drought 
back in 1988 which was extremely severe. For about 2,000 square miles 
of central Montana, I hardly saw a combine.
  Low prices and drought is disastrous not only to producers but 
surrounding communities. When producers are hurting, obviously the 
communities are

[[Page S12840]]

hurting. Farmers can't buy seed, fertilizer, and machinery, not to 
mention that they don't have much for clothes or for shoes. The whole 
economy suffers as well as farmers. The list goes on.
  Agriculture is the No. 1 industry in my State. It has been for years. 
It is today. We are an agricultural State. When agriculture suffers, 
the entire State suffers. When agriculture suffers in America, the 
entire country suffers.
  Often, agriculture leads to recession before other parts of the 
economy. Often agriculture tends to lead us out of recession. As we 
know, when the country is in recession and agriculture is also in 
recession, there is no way in the world one can say agriculture is 
leading our country out of recession. That is because they are in such 
bad shape.
  Lenders and bankers in my State are cutting back. They are not 
granting that working capital to the farmer and to the rancher the way 
they were before. They are cutting back. Why? Because of the position 
of farmers.
  The troubled agricultural economy not only affects our Nation but it 
also threatens relationships we have with other countries.
  A strong domestic agricultural policy is the only way we are going to 
get a level playing field with our trading partners. We are at a 
disadvantage.
  Eighty-some percent of the world's agricultural export subsidies are 
paid by the European Union. How are we going to get leverage to get 
those agricultural subsidies down so we have a level playing field? We 
cannot, unless we have leverage. The only leverage I know of is a very 
strong domestic agricultural policy where farmers are really strong. In 
fact, I think that is barely enough and is probably not enough if we 
are going to get the job done to get other countries to lower their 
agricultural export subsidies.
  Clearly, if we don't pass this bill, and if our farmers are in a 
weakened position, that makes it even harder in world trade talks to 
get other countries to lower their export subsidies which very directly 
hurts American farmers.
  The time has come to pass this bill, pass the changes in Freedom to 
Farm, which really turned out to be ``freedom to fail.'' Farmers at 
that time when those laws were enacted were gambling. They had an idea 
Freedom to Farm would work pretty well the first few years, but not 
after a few years later. We are here a few years later. It is not 
working. Farmers are in difficult shape.
  We need a bill that is a commonsense bill, one that is right for 
Montana, and that is right for America. We need to work together to get 
this done now because that is the least we can do for our farmers. Our 
farmers want some help. We should give them the help they need because 
they have been doing so much for us and so much for the world with the 
food they are supplying.
  Let us get to work and pass a strong, stable, comprehensive farm bill 
this year.


             Holding the California Dairy Industry Harmless

  Mrs. FEINSTEIN. Mr. President, I thank the chairman of the Senate 
Agriculture Committee for working with me to find a way that the 
California dairy industry can be held harmless by the dairy provisions 
in the farm bill.
  California is the largest dairy State in the Nation. Last year, 
California dairy farmers produced 32.2 billion pounds of milk--over 19 
percent of the Nation's supply. With over 2,100 dairy farms in the 
State, California leads the Nation in total number of milk cows at 
approximately 1.5 million.
  I spoke on the floor last week about how devastating the original 
farm bill would have been to the California dairy industry. And I have 
said California cannot be left out of any dairy equation. The original 
bill would have cost California dairy farmers $1.5 billion over 9 years 
and driven up prices for consumers by $1.5 billion over 9 years. I 
thank the Chairman for recognizing how much better California fares 
under this substitute versus the original proposal. I am delighted that 
he has agreed to see to it that California can be held harmless.
  Under the compromise in this bill, and according to an analysis by 
the University of Missouri's Food and Agricultural Policy Research 
Institute, California dairymen will receive a net benefit $143.1 
million in payments until the end of fiscal year 2005. This means 
California dairy farmers will receive $78.1 million in fiscal year 
2002, $70.7 million in fiscal year 2003, and $19.4 million in fiscal 
year 2004. If these numbers are not accurate projections for 
California, it is my understanding that the dairy provisions will be 
worked out in conference so that California is ultimately not adversely 
impacted by the dairy provisions in this bill.
  Mr. HARKIN. I thank the Senator very much for working with me and 
other Senators on this. It is not the intention of this bill to put 
California dairy farmers at a disadvantage. We will work to ensure the 
California dairy industry will be held harmless.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, I thank the Chair.
  I rise in opposition to the milk pricing mechanism, the last one we 
have seen. It is very hard to analyze because we have had four since we 
started. I wish I could be more precise and specific about the latest. 
But I want to just talk generally.
  I am pleased to be a co-sponsor of Mr. Crapo's amendment which would 
eliminate all elements of a National Dairy Plan.
  The amendment I support today would continue the $9.90/cwt. price 
support, which the New Mexico dairy interests strongly support. This is 
the third or fourth proposal we have seen with regard to dairy policy 
and it still caters to the Northeast at the expense of the other 
states. This most recent proposal resembles an expanded Northeast Dairy 
Compact. It is expanded to include Delaware, Maryland, New Jersey, New 
York, Pennsylvania, and West Virginia which were not originally in the 
northeast Compact.
  Under this recent proposal, marketing assistance loans apply to every 
producer except those in ``Participating States,'' which are 
Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, 
New Jersey, New York, Pennsylvania, Rhode Island, Vermont, and West 
Virginia. The 12 States in the Northeast reap greater benefits than the 
other 38 dairy States. If we compare the numbers using today's payment 
rates, the Northeast States would get about 70 cents per hundredweight. 
Compare this to other States, such as New Mexico, which would receive 
only 40 to 60 cents per hundredweight.
  Under this national plan as the rolling average decreases each year, 
the payments to producers decrease by about one-third. Yet under the 
same plan, payments to the northeast group stay the same. This is 
because there is a $16.94 target price built into the plan. It is time 
that the Senate understands that when it comes to setting dairy policy, 
it is not just Vermont versus the Upper Midwest. The West, including 
New Mexico, should have just as much to say about dairy policy.
  New Mexico is currently the fifth largest diary State. Yet, under 
this new plan, estimates show New Mexico coming in dead last on 
payments. Policies that penalize the new and efficient while providing 
welfare to the inefficient are unacceptable. These are the types of 
policies that are being contemplated in the original Ag Committee bill. 
Additionally, policies intended to retard and reverse the growth of 
dairying in larger producing States such as New Mexico are also 
unacceptable.
  We need to be setting sound policies that foster competition and the 
production of a good healthy product, not policies that are regionally 
divisive--pitting small-farm States against large-farm States--for 
example, West versus the East. Additionally, we should not be setting 
policies that punish consumers with higher prices for fluid milk. 
Decreased milk consumption is not helpful to any producer.
  My colleague, Senator Crapo, has done such a wonderful job in 
managing the opposition to this price fixing approach. He received a 
letter from the Secretary of Agriculture. It was gracious of him to ask 
me to put it in the Record. I will read one part of it, wherein the 
Secretary of Agriculture says:

       Consumers will pay billions in additional costs. By raising 
     prices, S. 1731 will also further exacerbate dairy 
     overproduction. The Federal Government currently owns about

[[Page S12841]]

     600 million pounds of non-fat dry milk--nearly a year's 
     supply. The bill's effect of increased supply and reduced 
     demand will create an even more enormous surplus that would 
     adversely impact dairy farmers for many years to come.

  I ask unanimous consent that the letter which includes that paragraph 
from the Secretary of Agriculture to Senator Crapo be printed in the 
Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                 The Secretary of Agriculture,

                                Washington, DC, December 11, 2001.
     Hon. Michael Crapo,
     Russell Senate Office Building, Washington, DC.
       Dear Senator Crapo: We would like to commend the very 
     constructive amendment you and Senator Bingaman are offering 
     to the dairy title of S. 1731, the ``Agriculture, 
     Conservation and Rural Enhancement Act of 2001''.
       As you know, the Administration is strongly opposed to the 
     dairy program proposed in S. 1731 as reported out of 
     Committee. It will raise the cost of milk by 10-15 percent. 
     In effect, this provision imposes a tax on each gallon of 
     milk, which disproportionately impacts low and moderate-
     income American families. Consumers will pay billions in 
     additional costs. By raising prices, S. 1731 will also 
     further exacerbate dairy overproduction. The Federal 
     government currently owns more than 600 million pounds of 
     non-fat dry milk--nearly a year's supply. The bill's effect 
     of increased supply and reduced demand will create an even 
     more enormous surplus that would adversely impact dairy 
     farmers for many years to come.
       Your amendment to strike this section and provide for a 
     study is consistent with the Administration's Statement of 
     Administration Policy on S. 1731. We support forward-looking 
     farm legislation that facilitates the long-term prosperity of 
     our Nation's farmers and ranchers, promotes effective 
     conservation efforts, and strengthens the nutrition safety 
     net.
           Sincerely,
                                                   Ann M. Veneman.

  Mr. DOMENICI. Mr. President, I thank Senator Crapo, a junior Member 
of the Senate. He is on the Agriculture Committee, and he is growing 
his way up from near the bottom in seniority. Today and yesterday, he 
has shown that he has a very good understanding of dairy and dairy 
prices in the United States.
  I am very proud that he came to the floor and repeated his view of 
the remarks which Senator Bingaman of my State made.
  I know if we were to ask the Senate to answer a quiz about dairy and 
milk production in America, they would never come close to an answer 
that said the State of New Mexico is the fifth largest producer of milk 
in America. Nobody would really think that because we don't look like a 
State that should produce a lot of milk. We are very dry. We are not a 
giant agricultural State. But what we have is a large group of dairy 
farmers who have moved to New Mexico with their families, and they have 
become very modern, entrepreneurial, and technologically ahead of the 
game in production of milk in the United States.
  It is just an absolute joy to go see one of these dairy farms with 
2,000 cows. It is unheard of in the parts of America where we are going 
to protect dairy and milk production with subsidies. We have many that 
have 1,000 head and many with 750 head. On average, we exceed 1,000 
head per dairy farm. They produce large quantities of milk. In fact, 
year before last, the largest producing cow in America in terms of 
weight of milk was from the great State of New Mexico, which again 
causes people to wonder what are we doing right in New Mexico.
  We have great competitive farmers. They are doing the right thing by 
way of matching entrepreneurial spirit, capitalism, and the production 
of dairy milk and milk-related products for America.
  I think our national goal would be not to make it difficult or more 
difficult for that to happen as it is beginning to happen in the State 
of Idaho. We ought to encourage that. After all, what do we want? We 
want the cheapest price of solid, safe milk and related products coming 
from American dairy farmers for our children and for our families. We 
want a constant supply coming from competitive producers and marketers 
of milk.
  Clearly, whether or not one understands the intimate details of the 
latest, the fourth amendment regarding dairy and milk production in 
America, it is clear that there is no intention to make it easier for 
those who are producing at competitive prices such as New Mexico and 
other States. If anything, there is a calculated effort to make their 
lives more difficult and to make the potential for them to grow and 
prosper less rather than more.
  I can see where we ought to help one State versus another State if we 
have some really difficult problems on which they must have assistance. 
But just how much longer do we have to try to paint this picture, and 
then implement it, of trying to help one piece of America because they 
are having difficulty being competitive in the production of milk?
  This has been going on for a long time. It is time that it end, not 
that it continue. It is time that that kind of allocation of American 
resources be on some kind of a slide that is going downward, not one 
that is going up, up, and away.
  This year, the money that will be circulating around will exceed $2 
billion, that will move from here to there and elsewhere in order to 
make one region, that obviously wants to continue producing milk but 
would have a difficult time competing, more assured of making money 
through the production of milk.
  So I came to this Chamber to urge, when we vote in the Senate today, 
that we decide we are not going to pursue this policy any longer, that 
we are going to move in the opposite direction. If there is going to be 
a motion to table, which I think there is, I say to Senator Crapo, I 
hope Senators will not vote to table and will leave this issue before 
us so we can have a vote on it.
  I believe eventually an agriculture bill that has this provision in 
it--that is the latest, the fourth iteration of the amendment in the 
last few hours--if that is going to be in the bill, I think it is going 
to be difficult to pass this bill, get it through both Houses, and 
signed by the President. In fact, I do not see how that is possible.
  So I am glad to be on what will ultimately be the right side. In the 
meantime, I yield the floor and wish the best for Americans in the 
future in terms of being able to supply plenty of milk to them at the 
most reasonable prices, coming from a competitive milk industry in the 
United States.
  I yield the floor.
  The PRESIDING OFFICER (Ms. Stabenow). The Senator from Iowa is 
recognized.
  Mr. HARKIN. Madam President, to get to the point where we can vote, I 
ask unanimous consent the Senator from Louisiana be recognized for 2 
minutes, the Senator from Idaho, the proponent of the amendment, be 
recognized for 2 minutes, and then I be recognized for a motion to 
table.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  The Senator from Louisiana.
  Ms. LANDRIEU. Madam President, with all due respect, I rise to oppose 
the amendment offered by the Senator from Idaho and urge my colleagues 
to table this particular amendment.
  I congratulate the chairman of the committee, the Senator from Iowa, 
Mr. Harkin, for his hard work. It is not easy to put together any major 
piece of legislation, let alone, as I have learned in my few years in 
the Senate, legislation regarding agriculture because, in different 
ways, all of our States participate in the infrastructure of 
agriculture, some of us more as producers but all of us as consumers. 
Weighing those interests between the consumers, the producers, and the 
processors, and all the international trade implications is quite 
complicated. So I thank the chairman and the ranking member for their 
extraordinary work in trying to put a bill together to which we can 
generally agree.
  Representing the South and Louisiana, and speaking for the dairy 
farmers, let me say that when the original bill came out, it did not 
work for southern dairy farmers. The national pooling concept was 
really not very fair to many regions, including the dairy farmers in 
Louisiana. And we have been suffering. We have lost over 25 percent of 
our farms. If we do not do something, we are going to lose even more.
  It is not right to not address this issue. So we proposed a compact--
the same as the Northeast has--for the South that would have worked 
beautifully. But, unfortunately, there were

[[Page S12842]]

other regions of the country where that did not work. So we came up 
with yet another compromise.
  In the underlying bill that we are considering, the Harkin-Lugar 
proposal, this compromise shows itself, and it is a countercyclical 
plan for dairy that will resemble the way we do countercyclical plans 
and proposals for other commodities that will work well for the 
majority of our dairy-producing States.
  The PRESIDING OFFICER. The Senator's time has expired.
  Ms. LANDRIEU. Madam President, I ask unanimous consent for 30 more 
seconds to wrap up.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. LANDRIEU. Some of us have large dairy farms. Some of us have 
small and medium-sized dairy farms. I suggest that the proposal in the 
Harkin bill is one that benefits most of us most of the time, and I 
urge my colleagues to table the Crapo-Bingaman amendment. I support the 
committee compromise.
  I thank the Chair.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. CRAPO. Madam President, today what we are being asked to do is 
adopt a massive new subsidy program in the dairy industry in the United 
States that will distort the price of milk, promote overproduction, and 
eventually cause dynamics in the economics of the dairy industry that 
will work to the detriment of dairy farmers nationwide.
  I encourage everyone who comes to vote in a few minutes, when the 
vote will be called, to support the effort to strike section 132 from 
the farm bill and to oppose the motion to table.
  I conclude by simply reading from correspondence we have received 
from the National Milk Producers Federation, which has already been 
made a part of the Record by the Senator from New Mexico. It clearly 
states what this entire debate is about.
  They said they have established the following principles to help 
assess whether a new dairy program meets the needs of the dairy 
community in America and of the economy that we want to promote in the 
United States.
  They state the program ``must be national in scope. It must not 
discriminate between States and regions. It must not discriminate 
between farmers by limiting payments based on herd size. It must not 
cause competitive disadvantages or advantages between dairy farmers. It 
should not increase production [in America] to the point where 
overproduction eventually erodes the farm gate prices.''
  The provisions currently in the farm bill do not meet any of those 
objectives. The current provisions in the farm bill, in fact, create a 
managed economy for the dairy industry, establishing a floor price 
which is far above the market price in one region of the country, which 
will increase overproduction and promote a new subsidy program that 
benefits that region of the country much more than other regions of the 
country, to the detriment of farms in the other parts of the country. 
It is unfair to dairy producers nationwide. It is unfair to the 
consumers. We should strike these provisions from the farm bill.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. HARKIN. Madam President, I move to table the amendment offered by 
the Senator from Idaho, and I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The question is on agreeing to the motion. The clerk will call the 
roll.
  The assistant legislative clerk called the roll.
  Mr. REID. I announce that the Senator from South Carolina (Mr. 
Hollings) is necessarily absent.
  Mr. NICKLES. I announce that the Senator from Ohio (Mr. Voinovich) is 
necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 51, nays 47, as follows:

                      [Rollcall Vote No. 362 Leg.]

                                YEAS--51

     Akaka
     Baucus
     Biden
     Boxer
     Breaux
     Byrd
     Cantwell
     Carnahan
     Carper
     Chafee
     Cleland
     Clinton
     Collins
     Conrad
     Corzine
     Daschle
     Dayton
     Dodd
     Dorgan
     Durbin
     Edwards
     Feingold
     Feinstein
     Harkin
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerry
     Kohl
     Landrieu
     Leahy
     Levin
     Lieberman
     Lincoln
     Mikulski
     Miller
     Murray
     Nelson (FL)
     Nelson (NE)
     Reed
     Reid
     Rockefeller
     Sarbanes
     Schumer
     Snowe
     Specter
     Stabenow
     Torricelli
     Wellstone
     Wyden

                                NAYS--47

     Allard
     Allen
     Bayh
     Bennett
     Bingaman
     Bond
     Brownback
     Bunning
     Burns
     Campbell
     Cochran
     Craig
     Crapo
     DeWine
     Domenici
     Ensign
     Enzi
     Fitzgerald
     Frist
     Graham
     Gramm
     Grassley
     Gregg
     Hagel
     Hatch
     Helms
     Hutchinson
     Hutchison
     Inhofe
     Kyl
     Lott
     Lugar
     McCain
     McConnell
     Murkowski
     Nickles
     Roberts
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Stevens
     Thomas
     Thompson
     Thurmond
     Warner

                             NOT VOTING--2

     Hollings
     Voinovich
       
  The motion was agreed to.
  Mr. GRAMM. Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Miller). The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DASCHLE. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Johnson). Without objection, it is so 
ordered.
  Mr. DASCHLE. I move to reconsider the vote.
  Mr. HARKIN. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. DASCHLE. Mr. President, as I understand it, another amendment 
will be offered within the next half hour. I ask unanimous consent that 
the period between now and 4:30 be for debate only and divided equally 
between Republicans and Democrats, and that at that time the Senator 
from Indiana be recognized to offer an amendment.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Who yields time?
  Mr. LUGAR. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DORGAN. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DORGAN. Mr. President, my understanding is we are in a period of 
general debate with no amendments to be offered. I wish to make a 
couple comments at this point that relate to some things that have been 
said during the debate on this farm bill.
  First of all, I am pleased we are at this point. Many of us have 
struggled hard to make sure we get a farm bill on the floor of the 
Senate. We are here and we will have a good debate. My hope is we will 
be able to have some amendments offered and deal with those amendments. 
We have just had one amendment with a very close vote. I would like, 
very much, to see us finish this bill by at least tomorrow evening or 
the next evening and have a conference with the House of 
Representatives. I hope our goal might be to put a bill on the 
President's desk for signature before this Congress leaves for the 
year.
  I know that is the goal of the Republican chairman of the House 
Agriculture Committee. He produced a bill in the House. He said very 
much that he wants to get to conference with us. So this would be a 
bipartisan effort with Chairman Combest in the House and those of us 
who wish to finish a farm bill this year in the Senate.
  My hope is we can move forward very quickly. We should consider 
amendments, and have significant debate on amendments, but it will 
serve this country's best interests, and certainly the interests of 
farm families in America, if we produce a good farm bill.
  Why are we here? We are here because we have a farm bill that does 
not work.
  Freedom to Farm, which is now existing law, just doesn't work. Almost 
all of us concede this point. It is not unanimous, but it is about as 
close to unanimous as you can get on public

[[Page S12843]]

policy. There are still a couple of discordant voices who will insist 
that Freedom to Farm does work. For the last 4 years, we have had to do 
emergency bills at the end of the year to try to deal with the 
shortfall in farm revenue because commodity prices have collapsed and 
collapsed dramatically. If we didn't do something to respond to that, 
we would not have family farmers left.
  I suppose that requires answering the question: Does it matter 
whether we have family farmers? Some would say it doesn't matter who 
farms the land. But, that is kind of an antiseptic view of the culture 
we live in. They would say the organization of our food production is 
really pretty irrelevant. We could have the largest corporate 
agrifactories farming America from California to Maine. They would just 
drive a tractor one way all day and then back the next day. They would 
just plow furrows and plant seeds, and giant agrifactories will 
certainly produce food. That is true. But as they produce that food, 
something else will be dying; that is a part of American culture that 
is very important to our country.
  The seed bed of family values has always moved from our family farms 
to our small towns to our big cities and nourished and refreshed 
America. That has always been the case. It is not only important for 
social and economic reasons, it is important for security reasons to 
maintain a network of family farms. Europe has done that. Europe has 
been hungry in the past, and it decided: We will not be hungry again. 
We will not rely on some huge mammoth operation. We will have a network 
of family farms dotting the landscape of rural Europe. And they do. 
They have price supports. That is the kind of economy they want. Those 
are the kinds of food producers they want--a broad dispersed network of 
producers, families living on the land.
  Small towns in Europe are radically different than small towns in 
this country these days. In most of Europe, small towns are thriving 
and growing and alive and have a heartbeat. In this country, across so 
much of our heartland, small towns are shrinking. They are shrinking 
inevitably.
  My home county in my hometown is exactly the mirror of what is 
happening in so much of our country, going from 5,000 people to 3,000 
people in 25 years. Maybe it doesn't matter to some. Does it matter in 
public policy? I believe it does. We ought to have a farm plan that 
reflects decent price supports, reasonable price supports, that gives 
family farms an opportunity to make a living during tough times. That 
is what this is about.
  The legislation brought to us by the Senate Agriculture Committee is 
good legislation. It is certainly not perfect. I intend to offer an 
amendment as soon as I have the opportunity that will further target 
some of the benefits so that we don't give an amount of benefits that 
are inappropriate to the largest producers in this country which has 
happened in the past. I hope we can prevent that from happening now. I 
do intend to offer an amendment. I suspect others will as well.
  My goal is that we aggressively debate the amendments, call for a 
vote, and then try to see if we can't finish the bill and get to a 
conference with the House of Representatives.
  It is interesting that the Department of Agriculture was created in 
the 1860s by Abraham Lincoln. When the Department of Agriculture was 
created, they had nine employees in the early 1860s. It is now a 
behemoth organization. My belief about the Department of Agriculture 
is, no matter who is in charge of the administration, Republican or 
Democrat, we don't need a department if the end goal is not to support 
this statement: It is our goal to foster and maintain a network of 
family-based food producers in this country.

  If that is not the goal of our agricultural policy, we don't need a 
U.S. Department of Agriculture; just let happen whatever happens. But 
if you believe, as the Europeans do and I do and others, that the 
economy that you will get is the economy that you want and that you 
construct instead of just letting something happen, you can have an 
economy that fosters and maintains a network of family producers.
  Our family farmers produce more than just food. They produce 
communities. They produce a value system that is important. Each farm 
out there that lives under a yard life, trying to raise a family, 
represents a blood vessel that flows into a network of vessels that 
creates communities and a rural lifestyle. That is very important.
  It is not the case that family farming is somehow irrelevant these 
days. It is not the case that food production is irrelevant. A 
substantial portion of the people in this world go to bed hungry 
because they don't have enough to eat. I am told that 500 million 
people in this world go to bed every night with a powerful ache in 
their belly because it hurts to be hungry. Yet in my home State and 
many others, our farmers are hauling freight to the elevator only to be 
told that the food they produce in such abundance has no value. There 
is a powerful disconnection there.
  If you take a look at producers, family farm producers, and what 
happens to the grain they produce, you discover it is not that there is 
not value to it. It is the question of who is able to get the proceeds 
from that value.
  If you have a kernel of wheat and the farmer hauls it to the 
elevator, the grain trade says, this wheat doesn't have any value, what 
you have produced is pretty irrelevant to the world; then someone buys 
that wheat and puts it into a grocery manufacturing plant, a cereal 
plant; they puff it up and that kernel of wheat is now puffed wheat. It 
is put into some cellophane, put in a box, and sent through to a 
grocery store somewhere. And that little box is going to sell for $4.50 
for a box of puffed wheat.
  Who made the money? The person that bought the tractor, bought the 
seed, bought the fuel, bought the fertilizer, spent the nights and days 
planting and then hoping and then harvesting? Did that family farmer 
make the money? No, it was the manufacturing plant that puffed it and 
put it in a box and sold it as breakfast cereal. They made the money. 
For the farmer, that food dollar has been shrinking and shrinking. We 
have fewer and fewer family farmers and more expensive grocery cereals 
and more people hungry overseas.
  Somehow this is a puzzle the pieces of which don't fit. We need to 
make sense of it in the Senate with a farm bill that recognizes the 
value and the worth of families that produce America's food and produce 
food for a hungry world.
  I have been places in the world where people were hungry. I have 
leaned over the crib in a neonatal clinic of a terribly poor country 
and had a young child who was starving reach up to me because I was the 
only one that young child had. I was only going to be there a couple of 
minutes. The doctor said to me: That child is going to die. I have been 
to refugee camps and hospitals in the worst parts of the world. I have 
seen hunger. I have seen death.
  It needn't happen in this world that the winds of hunger blow every 
day and 45,000 children die. It needn't happen if we decide that we are 
going to use what we produce in such great abundance to help produce a 
more stable world. We send weapons around the world. We are the arms 
merchant to the world. We send more weapons than any other country 
under any other circumstance year after year.
  Somehow that which the world needs most, food, we are not able to 
connect very well to meet the needs of the world and the needs of those 
who produce it here at home.
  My hope is that we can decide with this farm bill that family farmers 
matter, families who struggle to make a living matter, and we are going 
to do something to help them when grain prices collapse.
  There may well be others who want to speak. I will not go on except 
to say this: My family came to the prairies of Hettinger County, ND, 
many years ago. Many years ago, a Norwegian immigrant, recently widowed 
with six children, decided to move to the prairies of western North 
Dakota, pitch a tent and build a house and start a farm. One can only 
begin to think of the courage it took for a widow who just lost her 
husband to a heart attack, who had come over from Norway to decide to 
get on a train with her children and go homestead, with the promise of 
the Federal Government saying if you go and improve that land and you 
build a farm on that land and do the things that are necessary, we will 
give you the 160 acres. That was the homestead plan.

[[Page S12844]]

  That woman, named Caroline, did that and she had a son who had a 
daughter who had me. That is how I was born in southwestern North 
Dakota. But I will bet that many, many serving in this Chamber have 
exactly the same stories of their heritage--people who decided they 
wanted to stake their dream and their hope on trying to raise food from 
a family farm and raise a family on a family farm, be independent, and 
do the things they wanted to do to make that soil produce bountiful 
food supplies.
  Now, what we have seen in recent years is so many broken dreams and 
so many families deciding that which they have invested their life 
savings to do is now gone and they can't continue. We can do better 
than that as a country. That is what this debate is about. Some say it 
is about this amount of money--no, it is not about that. It is about 
whether this country wants family farmers in its future. Does it 
believe the production of its food supply ought to be done by families? 
Does that contribute to this country and promote security and 
strengthen this country? I think it does. People look at family farms 
and say they are like the old diners who came and went. It is nice to 
think of it, but it is really not part of tomorrow's economy. They are 
wrong.
  Family farming is not out of favor. It is an important part of what 
this country is and what it can be in the future. That is why we have 
to pass this farm bill.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  The Senator from North Dakota, Mr. Conrad.
  Mr. CONRAD. Mr. President, might I inquire about the parliamentary 
situation?
  The PRESIDING OFFICER. There is time for debate until the hour of 
4:30. All time remaining is under the control of the Senator from 
Indiana.
  Mr. CONRAD. So there is no time on our side?
  The PRESIDING OFFICER. That is correct.
  Mr. CONRAD. Mr. President, I would like to take a few minutes at this 
time. I don't want to use up the Senator's time.
  Mr. LUGAR. I respond by saying I am pleased to yield time to the 
Senator. The allocation by the majority leader was equal time between 
the time he made the motion and 4:30. That is why we are in this 
particular situation. The previous speaker consumed the first half of 
the time. I will be recognized at 4:30 to offer an amendment, which I 
plan to do. I am pleased to yield to the Senator.
  Mr. CONRAD. I thank the Senator for his courtesy. Once again, the 
Senator from Indiana demonstrates his generosity of spirit and the 
reason why he is held in high esteem by everyone. I thank him for his 
courtesy.
  We have talked about why we are discussing a farm bill now, why it is 
critically important. I believe it is critically important because of 
the economic conditions we confront. We are faced with a circumstance 
in which the farm families I represent in the State of North Dakota are 
facing some of the most difficult times they have ever confronted.
  I think this chart says it very well. This green line shows the 
prices the farmers have paid for the inputs they use to produce goods, 
what happened to those prices from 1991 to 2000. You can see that the 
prices farmers are paying have gone up considerably in this period. On 
the other hand, the red line shows the prices the farmers receive, and 
you can see what happened there. Since the 1996 farm bill, that line is 
almost straight down because prices have collapsed. That is the reality 
of what has happened in farm country. It is the reason why the new farm 
bill is so important to consider.
  This shows the same pattern, just the prices that farmers have 
received for wheat. Again, we can see that the peak was at the time the 
last farm bill was considered. Look at what has happened. Since that 
time, since 1996, the red line shows the price of wheat over this 
period through and up until this moment. Wheat prices have absolutely 
collapsed. This black line is the cost of production for wheat at $4.26 
a bushel. You can see we are at about $2.50. We are far below the cost 
of production. It is not just wheat, it is commodity after commodity.
  One of the key reasons that agriculture in America is in crisis is 
because our major competitors are doing much more to support their 
producers than we are doing to support ours. This chart shows what the 
European Union is doing to support their farmers. This is support per 
acre. The red bar is what Europe is doing--$313 an acre of support. The 
blue bar on the chart represents what we are doing in the United 
States, which is $38 an acre. So they are outsupporting their farmers 
by a huge margin. By the way, these are not Kent Conrad's numbers or 
the Agriculture Committee's numbers; those are the numbers of the 
Organization for Economic Cooperation and Development, the 
international scorekeepers. They are the recognized international 
scorekeepers. This tells the story. That is why it is so important we 
pass a new farm bill and that we do more to support our producers. If 
we want to level this playing field and we want our farmers not to be 
facing a stacked deck, then we have to act and act now.

  It doesn't end there because this chart shows what has happened with 
world agricultural export subsidies. These are the most recent numbers 
worldwide. You can see that this pie chart represents all of the 
world's agricultural export subsidies. The blue part of the pie is 
Europe. They account for nearly 84 percent of all the world's 
agricultural export subsidies. The United States shares this tiny red 
piece of the pie, 2.7 percent--not 27 percent but 2.7 percent--less 
than 3 percent. So our friends in Europe are outsubsidizing us for 
exports by a factor of 28 to 1. It is no wonder there is hardship in 
American agriculture, when we see the Europeans buying markets that 
have traditionally been ours. They are going out and getting these 
markets the old-fashioned way. They are paying for them. Again, this is 
the World Trade Organization's information. It demonstrates 
conclusively what we are up against and the need for this farm bill to 
start to level the playing field.
  There has been a lot of talk about the spending in this farm bill and 
that it represents an increase. This is the baseline for agricultural 
spending, this red line. You can see the baseline is coming down 
dramatically and would continue to decline under current law. This farm 
bill does represent an increase over the baseline. You can see that the 
green line here represents the Senate farm bill. But you can see that, 
while it is higher than current farm policy, it also will be in steady 
decline. Farm spending will take a smaller and smaller share of the 
Federal budget.
  I might say, before we leave this chart, that while this is more 
money than current farm law provides, it is actually less money than 
current farm law plus the economic disaster payments we have made in 
each of the last 4 years.
  This chart shows how important Government payments have become to 
farm income. If we look at each of these bars, the red part is 
Government payments as a part of overall farm income.
  We can see back in 1992, farm income was just under $50 billion. In 
1993, it actually went down. In 1994, it was about the same. In 1995, 
there was a big slip when prices were down. Then prices went up right 
at the time we wrote the last farm bill. Then we can see farm income 
started to decline, and decline quite markedly. As a result, Government 
payments increased as we passed in each of these 4 years economic 
disaster assistance to keep the farm sector from imploding, to keep the 
farm sector from mass bankruptcy.
  We can see now what a big chunk of farm income is represented by 
Government payments. Again, that is the red part of each of these bars. 
Each of these bars represents net farm income, and we can see how 
critically important Government payments have been, again, largely as a 
result of what the Europeans are doing.
  I believe we have arrived at the hour of 4:30 p.m. The agreement was 
we would turn to an additional amendment, so I will yield the floor. 
Again, I thank the Senator from Indiana, the ranking member of the 
Agriculture Committee, for his courtesy.
  The PRESIDING OFFICER. The Senator from Indiana is recognized.
  Mr. LUGAR. Mr. President, I thank the distinguished Senator for his 
remarks. He always makes an important

[[Page S12845]]

contribution in the Agriculture Committee and, of course, now serves as 
chairman of our Budget Committee in the Senate and has made an 
additional contribution because of the importance of that 
responsibility.
  Mr. President, before I offer my amendment, I ask for the yeas and 
nays on the pending substitute amendment.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The yeas and nays were ordered.


                           Amendment No. 2473

   (Purpose: To provide a complete substitute for the commodity and 
                           nutrition titles)

  Mr. LUGAR. Mr. President, I send an amendment to the desk and ask for 
its consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Indiana [Mr. Lugar] proposes an amendment 
     numbered 2473.

  Mr. LUGAR. Mr. President, I ask unanimous consent that the reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  Mr. LUGAR. Mr. President, I rise to offer an amendment to the 
Agriculture Committee-passed farm bill and to the substitute that has 
been submitted. By adopting my amendment, the Federal safety net for 
low-income Americans will be strengthened through improvements in the 
Federal nutrition programs and will create a more effective market-
oriented and broad-based safety net program for U.S. farmers and 
ranchers. Therefore, my proposal amends the commodity title and the 
nutrition title of the bill.
  Since joining the Senate Agriculture Committee, I have fought for 
Federal nutrition programs and worked closely with my colleagues on 
both sides of the aisle to make improvements to those programs and to 
safeguard their existing resources to improve the safety net for low-
income Americans and to support the goals of welfare reform.
  The last time we looked at significant changes in the Federal 
nutrition programs was during welfare reform. Since that time, 
significant changes have occurred which require adaptations and 
improvements in the program's policies and operations.
  Over the course of the re-authorization process, we have been able to 
achieve remarkable consensus among the client advocates, the States, 
and the administration as to changes that should be made to Federal 
nutrition programs. This consensus was reflected in the nutrition title 
of S. 1571, the farm bill proposal which I introduced.
  I am pleased that Chairman Harkin of the Agriculture Committee 
adopted a number of these proposals in the chairman's mark, and many 
are included as part of the committee-passed legislation. However, I 
believe strongly we can and should do more in the nutrition area, and 
this amendment will accomplish just that.
  The second part of my amendment reforms the safety net for U.S. 
farmers and ranchers. The Senate Agriculture Committee and the House of 
Representatives have each passed legislation expanding dramatically 
U.S. farm program subsidies. The bills are not only costly, but each 
represents a wholesale retreat from the important reforms begun under 
the last farm bill.
  My amendment will expand the base of the agriculture safety net and 
will institute much needed market-oriented reforms so the U.S. farm 
policy will comport with economic reality.
  Americans can take pride in the assistance programs created to 
provide a strong nutrition safety net. The Food Stamp Program is the 
foundation of this safety net, and its re-authorization warrants our 
thoughtful and serious attention.
  In our post-welfare-reform environment, the Food Stamp Program is 
particularly important. As families leave behind cash assistance for 
employment, they typically encounter minimum wages and modest, if any, 
fringe benefits and often unstable jobs. In the year 2001, a family of 
four with earnings equivalent to a full-time minimum wage job and the 
earned income tax credit needs food stamps just to reach the poverty 
line.
  Dr. Ron Haskins, a key architect of welfare reform legislation, has 
stated:

       There are millions of people who cannot earn enough to 
     support their families. Even more than in the past, the Food 
     Stamp Program has become a vital support to poor and low-
     income mothers who work.

  Thus, one of the important questions we must address is whether or 
not the current Food Stamp Program effectively supports welfare reform 
goals.
  There appears to be a number of indicators that point to the need for 
additional program changes. Some of these signals, such as the 
increased proportion of recipients who hold jobs, are clearly desirable 
but may suggest further steps to make the program more compatible with 
this evolving caseload profile.

  Other findings, such as the decline in the percentage of financially 
eligible persons who participate, raise questions. Collectively, these 
shifts illustrate the need both to continue adapting and improving the 
Food Stamp Program.
  As part of my farm bill proposal, I introduced a nutrition title 
embodying changes which would simplify food stamp rules for all 
stakeholders, increase State flexibility in administering the program, 
make the quality control system less punitive, support personal 
responsibility and work, and reduce the dependency of low-income 
persons on emergency food assistance.
  This idea received public support from Michigan's Governor Engler 
when introduced, and the amendment which I offer today is intended to 
provide a more complete meal to low-income families in need of 
nutrition assistance and to States seeking administrative flexibility 
and simplicity.
  I served as chairman of the Agriculture Committee in 1995 and 1996 
when the committee wrote both the farm bill and the food stamp 
provisions of welfare reform. The committee faced a difficult budget 
reconciliation instruction for those years. The result was that 
spending on food stamps was significantly reduced.
  For the years 1996 through 2001, the Congressional Budget Office 
(CBO) estimated that welfare reform would reduce food stamp spending by 
over $21 billion. Over that same time-frame, CBO estimated that farm 
program spending would be reduced by $2 billion due to the enactment of 
the 1996 farm bill.
  Thus, over 90 percent of the budget cuts enacted in 1995 and 1996 
pursuant to the Agriculture Committee's reconciliation instruction 
occurred in the Food Stamp Program. I make that point again because it 
is such a dramatic one. Reconciliation instructions came to our 
committee. We were compelled to act. The $23 billion of savings that 
was required came, $2 billion from farm commodity programs and $21 
billion from food stamps.

  As it turned out, CBO underestimated the effects of welfare reform on 
the Food Stamp Program. For the years 1996 through 2001, food stamp 
spending declined by about $50 billion, not the $21 billion CBO 
originally estimated or the $21 billion we anticipated as we responded 
to the reconciliation instruction. Around half of that reduction was 
due to the changes in law made by welfare reform and an economy that 
was stronger than CBO anticipated. The other half of the decline in 
food stamp participation occurred among eligible families and was due 
largely to the outdated restrictive nature of the current Food Stamp 
Program administration. Thus, food stamps provided the vast bulk of the 
savings needed in 1995 and 1996.
  History has shown that the actual reductions were far bigger, in 
fact, dramatically larger than expected. Some of those reductions were 
reinstated in later bills. Specifically, about $2 billion has been 
restored to the Food Stamp Program, but an additional $30 billion has 
been added in commodity support over the same period. Given that such a 
large proportion of budget savings came from the Food Stamp Program, it 
seems equitable that with substantial new agricultural resources all of 
the legislation we are now considering, all the alternative bills 
produced, a significant share of the new money should go to restoration 
of a sound Food Stamp Program. I am not proposing that 90 percent, or 
even a majority of the new funding apparently available to the 
Agriculture Committee, go to the Food Stamp Program. The committee-
reported bill, however, devotes

[[Page S12846]]

only 7.6 percent of its spending to nutrition. I am proposing to spend 
19.2 percent of these new resources for nutrition. It seems to me it is 
only fair and right to vote a little less than one-fifth of the bill's 
new resources to support Americans in poverty and to further the goals 
of welfare reform.
  The nutrition title in my amendment spends $6.3 billion more in 
budget authority over the next 10 years than the nutrition title in the 
farm bill now before the Senate. Senator Harkin's title spends $5.6 
billion in budget authority over baseline; my amendment spends $11.9 
billion, an increase of $6.3 billion over the committee-passed bill.
  I make it clear that the spending I am talking about goes to support 
the goals of welfare reform in addition to the Food Stamp Program.
  Collectively, my proposed nutrition policy serves to replace complex 
food stamp rules with simpler ones, better integrate the food stamp, 
Medicaid, and cash assistance programs, offer many opportunities for 
State flexibility, and attempt to make the program more compatible with 
the needs of working families.
  The nutrition package is constructed to make sure the Food Stamp 
Program promotes welfare reform objectives conveyed in the title of 
that legislation.
  First, responsibility and work opportunities: My proposal includes 
almost twice as many provisions to simplify the Food Stamp Program. 
They cover eligibility rules and procedures, income adjustments, and 
reporting requirements. Most of the differences between the two 
titles--that is, the committee-passed bill and my proposal--occur in 
the first two categories. My proposal excludes vehicles and 
dedicated retirement savings from the asset limit thus reflecting what 
a household needs to assume personal responsibility today and in the 
future. Making these changes also simplifies application and 
eligibility determination procedures by reducing the documentation 
households must provide and some of the fine distinctions case workers 
have to apply now as to which assets are and are not excluded. The 
result is a set of realistic and uniform asset policies across all 
States.

  Both titles--that is, the farm bill proposal of Senator Harkin and my 
proposal--create new opportunities for State flexibility and 
innovation. My proposal offers substantially more. States have provided 
an additional discretion for using food stamp employment and training 
funds, as well as additional dollars. The Lugar title also opens the 
door for States to test their own ideas on program simplification 
through changes to demonstration waiver rules on cost neutrality and by 
funding a set of systematically evaluated projects. The outcomes of the 
stated initiative should provide the basis for continuing welfare 
reforms.
  Finally, my nutrition title allows States to move beyond their 
successful demonstration experience of integrating a food stamp 
eligibility decision with an application for SSI benefits to more 
routine implementation for the one-stop approach. The two nutrition 
titles are similar to one another and to the House proposal for 
modifying the food stamp quality control system. The proposed changes 
result in targeting penalties to those States with repeated and 
exceptionally high levels of benefit payment error.
  Our proposals differ, however, with respect to rewarding States for 
exceptionally good performance. The Lugar proposal introduces a large 
number and variety of performance standards that allow many states the 
opportunity to be meaningfully rewarded for outstanding operations and 
service.
  Other improvements to the Food Stamp Program are intended to reduce 
dependency on emergency food assistance. Both the Lugar and committee 
proposals selectively remove some of the restrictions on the 
participation of legal aliens and able-bodied adults in the Food Stamp 
Program, as well as provide a modest benefit increase through a more 
generous standard reduction to family income.
  The Lugar bill proposes reasonable periods of U.S. residence, 5 
years, or a history of 4 years at work. The proposal was carefully 
designed to balance our obligation to those who legally emigrate to 
this country and subsequently face economic hardship against the 
concern that assistance program policy should not be so generous as to 
provide benefits immediately upon arrival, nor to create that 
expectation.
  Finally, both titles link the standard income deduction to the 
poverty line which results in indexing by family size and adjusting for 
inflation. Under either proposal, the absolute benefit gain per 
household is modest. For example, after full phase in over 10 years, my 
proposal entitles a family of four to an additional $16 in benefits 
each month.
  This increase is more generous than the committee proposal in terms 
of the amount of the change and the rate at which the increase occurs.
  Many different organizations have sent letters of endorsement to both 
Senator Harkin and to myself. Public support includes the Food Research 
and Action Center, Second Harvest, the Center on Budget and Policy 
Priorities, the Evangelical Lutheran Church, the Bishop's Council, 
Farmers Market Advocates, United Jewish Communities, the Quakers, the 
National Council of La Raza, the National Governors Association, the 
National Conference of State Legislatures, and the American Public 
Human Services Association. These organizations acknowledge the 
important steps Chairman Harkin and the Agriculture Committee have 
taken to build on the provisions of the House title. But these same 
organizations note that nutrition funds provided by the committee's 
package provide the minimum budget necessary to make a difference. Many 
also indicate their preference for both the proposed policies in, and 
the funding for, my nutrition title ideas.

  Individual groups identify specific but different provisions that 
they view as critical to fully implementing welfare reform. With our 
country's wealth and agricultural bounty, there is no justification for 
anyone to experience hunger or even uncertainty about the next meal. 
The Food Stamp Program continues to be fundamental in meeting the 
nutrition needs of low-income persons and families. It is particularly 
important now, as food stamp benefits help support families who leave 
cash assistance for entry-level jobs with uncertain futures and at the 
same time provide a direct stimulus to the Nation's economy. It is also 
important that we listen to the States and to the Governors who have 
asked us to simplify this complex program.
  That brings us to the second part of my amendment which is reforming 
the safety net for U.S. farmers and ranchers. As we debate the farm 
bill, it is important to understand the shortcomings of current farm 
policy. Virtually all agricultural subsidies go to producers of just 
five program crops: corn, wheat, soybeans, cotton, and rice. As a 
result, 60 percent, three-fifths, of all farms are excluded from 
Federal farm benefits. Agricultural subsidies have been distributed 
according to acreage. This has resulted in the bulk of payments being 
distributed, understandably, to large farming enterprises. In fact, 47 
percent of all payments during 1996-2000 went to just 8 percent of 
farmers, a very focused concentration for payments.
  The cost of U.S. agricultural policy to taxpayers has been large and 
unpredictable, even as it has failed to alleviate the difficulties it 
is intended to address. Even with an overall net cash farm income for 
this year of $61 billion, many producers, particularly small family 
farms, struggle to survive. But that is paradise. Despite the rhetoric 
that has been heard on occasion during our farm bill debate this year, 
the facts are that we are enjoying--if that is the proper word--the 
highest net cash farm income ever for any year in American 
agriculture--$61 billion. Even the often cited year of 1996 did not 
exceed that amount, and this year's farm income is substantially 
greater than the years subsequent to 1996.
  Yet, as we have heard from testimony, and from Senators about 
constituent farmers, large numbers of farmers are obviously short in 
terms of income and many are growing short in terms of hope. I think 
the Chair and I understand that. We have heard from a good number of 
farmers in our States.
  The problem of course is that the benefits of the program, by 
tradition and history--and now that history is about to be repeated--go 
predominantly to five crops, so that almost half of the payments go to 
just 8 percent of the farmers. It is very difficult

[[Page S12847]]

to argue logically that the farm program--at least the one that came 
out of the Agriculture Committee this year or, for that matter, the one 
that came out of the Committee in 1996--is going to touch even a 
majority of farmers. It will certainly not reach a majority of those 
who are fairly small.
  There may be an illusion that the program does this by chance, but 
there is certainly no program effort or focus involved. The current 
policy of Federal supports, in fact, defies economic logic. It 
perpetuates--I repeat that word--it perpetuates a cycle of low prices 
and overproduction, which is then reinforced by further emergency 
subsidies that create further low prices and overproduction. The 
history of these efforts to concentrate on five row crops and to 
attempt to guarantee prices that are clearly substantially above market 
prices, either in the United States or the world, creates incentives to 
produce for the Government program, not for the market. As a result, 
more is produced. Predictably, as demand in our country for major crops 
has not increased, the supplies overwhelm demand.

  In the best of all worlds, we would have free flow of our 
agricultural commodities in world trade, but we do not. Someday we may. 
It is a very tough thing, as we have all found, to negotiate. 
Meanwhile, with the flow constricted abroad, supplies mounting at home, 
prices predictably go down. The bill that came out of committee, in my 
judgment, will pound them down further.
  The promise of the committee bill, not economic reality, is, that 
notwithstanding what may be occurring in the market, farmers can count 
on prices that are much higher than the market and financed essentially 
by other taxpayers. So, in a 10-year period of time, it is estimated 
that with the so-called baseline expenditures plus the new 
expenditures, about $172 million will be transferred from all the 
taxpayers in the United States to a very few agricultural producers.
  Why very few? Because 60 percent of farmers don't get anything at 
all. Most of the benefits go to six States. Within the six States, the 
same national averages are replicated; namely, 8 percent of the farms 
get half of the benefits.
  There may be an illusion that somehow in agricultural America farms 
across all 50 States are being supported or rewarded by this bill. That 
simply is not the case. It has not been written that way this time nor 
has it been, really, since the New Deal days of the 1930s.
  Large farm payments also have the faculty to inflate land values and 
cash rents derivative from that, particularly for program crop 
producing regions. Why there? Because, given the desire of the Federal 
Government to support prices that are well above the market, land 
values have an expectation of those sorts of returns. Country bankers 
have an expectation of those sorts of returns. Landowners become 
accustomed to those returns and increase the rents.
  Why is that significant? Because 42 percent of farmers rent land. So 
they are losers in this process. So, on the one hand, we are hoping to 
boost income, while, in fact for the 42 percent of farmers who are 
renting, the land that is useful for farming program commodities 
increases in price and so does the rent for that land. This has 
especially unfortunate results for young farmers who typically must 
rent most of the land they farm unless they have inherited land or are 
part of a situation where they do not need the capital to buy in.
  The commodity bill that came out of the Agriculture Committee 
increases the CCC Farm Program spending by an estimated total of $44 
billion over 10 years. That bill raises nonrecourse marketing 
assistance loan rates significantly and across the board. The only 
exception is the soybean loan rate which would remain largely unchanged 
at its current high level.
  These loan rights will be effective for 2002 through the 2006 crop.
  Compared to current law adopted in 1996, the new Senate bill coming 
out of the committee raises marketing assistance loan rates by 16.2 
percent for wheat, 10.1 percent for corn, 5.9 percent for cotton, and 
5.1 percent for rice.
  Without doubt, this will encourage even more production of these 
loan-eligible commodities given the attractive new loan rates that are 
available to those who produce them.
  In addition, the committee-passed bill will provide direct and 
countercyclical payments for program crops based on updated acreage and 
yield history, in effect rewarding producers for recent decisions to 
increase production of these commodities, and, thus, encourage their 
production in the future regardless of market signals because of the 
guarantees that come quite apart from whatever is occurring in the 
market.
  Altogether, these program crop provisions are expected to cost 
taxpayers about $34 billion in addition to the baseline expenditures 
over the next 10 years. Importantly, increased crop production will 
drive farm prices for these crops lower than they are today, thus 
further reducing crop market revenue received by farmers.
  Dr. David Orden, professor of agriculture economics of Virginia Tech 
University, estimates that after including the production increasing 
effect of such subsidies, about 25 percent, or $8.5 billion--of the 
Senate Agriculture Committee's $34 billion--will be lost by crop 
farmers due to lower market revenues. That is an astonishing phenomenon 
that, on the one hand, we congratulate the committee for increasing 
farmers' income by $34 billion, but we fail to acknowledge that, even 
as we are overstimulating production, another $8.5 billion is being 
lost by crop farmers due to lower market revenue as prices are pounded 
down.
  For the dairy industry, the committee-passed bill originally extended 
the milk price support at $9.90 per hundredweight through 2006. I say 
originally because, as with many, it has been hard to follow the 
changes and the chapters of this stock. I fear almost any figures that 
I quote from previous bills have been overtaken by events, perhaps even 
as we speak.
  But, in any event, suffice it to say that with the programs and 
significant restructures and committee-approved bill, instead of newly 
constituted boards in each Federal marketing order region administering 
the program, it may now be administered by the Secretary through 
existing Federal milk marketing orders. Overall, the dairy provisions 
are expected to cost taxpayers $3 billion over the next 10 years.
  A new target price and marketing loan support program is created in 
addition for peanut producers. The taxpayers' cost, therefore, is 
expected to be about $4.2 billion over 10 years, nearly $700 million 
more than the House-passed peanut provisions.
  The distinguished occupant of the chair will recall discussions in 
the Committee on Agriculture in which some of our members were 
insistent for more attention to peanuts, and they received that. Peanut 
processors and manufacturers are expected to benefit substantially from 
lower farm prices for peanuts that will occur as a result of this 
taxpayer financed buyout but peanut users are not asked to share the 
cost.
  The commodity title of this bill is expected to cost about $44 
billion over baseline, and, if so, this would be only $4.8 billion less 
than the $48.8 billion the House spent on its commodity title over the 
same period.

  Current farm programs, however, have some problems as well. Due to 
the current program's focus on program crops, as I mentioned, 60 
percent of farmers are excluded from the program benefits. Furthermore, 
farm payments are distributed based largely on historical program crop 
acreage and yields in the case of the fixed payments, the so-called 
AMTA payments, and the volume of program crops produced in the case of 
the marketing assistance loan program and the sufficiency payment 
program.
  I mentioned this because we have debated this issue during, as I 
recall, each of the three emergency or supplemental debates we had. 
Many Senators pointed out that technically a farmer might not now be 
farming but would receive an AMTA payment because the farmer was on the 
rolls in 1996 that established a history for program crops and, 
therefore, received the money.
  The rationalization was made--I must confess I accepted this as a 
practical matter--that to reconstruct the rolls would be to eliminate 
any possibility for relief of the emergency that we are attempting to 
meet; namely, the only way that checks could be cut and money get to 
the farmers would be

[[Page S12848]]

to use the AMTA payment rolls from 1996, recognizing that each year 
that history became more dated.
  In fact, we are sort of back to square one in the bill out of the 
Committee on Agriculture. There is a thought about updating--not 
necessarily eliminating--that we still have the 1996 situation for some 
farmers who may or may not update. I gather that would be optional. And 
47 percent of the payments now go to 8 percent of the largest farmers. 
It is not clear, but it would appear at least to some that 
concentration might increase, given the fact that the landowners who 
are involved in the situation have an opportunity to enhance their 
situation by updating the acreage--acreage that has been planted in 
response to the rewards of the program which, in my judgment, has 
contributed to an overproduction and lower prices. But those who have 
been increasing their production have, by and large, been among our 
most efficient farmers.
  They say we ought not to be penalized for using the benefits of 
research of our land grant colleges. The fact that we are good at it 
means we are able to produce for less than the loan deficiency payment, 
and, thus, finding it profitable to the last bushel to do so ought not 
be a consideration.
  I believe the bill which came out of the Committee on Agriculture 
does not deal with the shortcomings in policy that I have been 
discussing. Therefore, we tried to find an alternative that would not 
be production distorting, would not distort land values, and would not 
discourage young farmers and those who rent, but would, in fact, bring 
much greater equity not only to the program crops but to farmers who 
produce livestock, fruits, and vegetables, or various other things on 
their farms. The commodity title of my farm bill offers such an 
alternative.
  As the Chair may recall, I offered in the bill that I submitted an 
entire farm bill. It was the will of the committee, in which I was 
pleased to cooperate, that most of the titles were ones that we were 
able to adopt in a bipartisan colloquy, and all things considered, 
fairly rapidly, given the comprehensive nature of going into farm 
credit and conservation, and some very large issues. For example, 
energy, this time, is a very important issue.

  (Mr. DAYTON assumed the chair.)
  Mr. LUGAR. Therefore, I do not want to dwell on the committee product 
in its entirety because I support, as I recall, eight of the titles, if 
I remember how many we dealt with. But all of us around the table knew 
we would have some differences on policy and results with the commodity 
title, and we did. So this is a part of that extended argument.
  At the time of the adoption of the nutrition title, I offered an 
amendment in the committee which was narrowly defeated that, in fact, 
traces the additions I wish to offer today.
  In essence, for those who are attempting to keep some scoring as to 
how this is paid for without breaking out of the budget balance, the 
savings I obtain in my commodity title are more than are required to do 
the additional things I have chosen to do in the nutrition title. In 
the proposal that I make, beginning in the year 2003--and I stress 
that; not this year or the next year, 2002, but in 2003--a farmer or 
rancher with at least $20,000 in annual gross farm income, and who 
provides 5 consecutive years of Federal tax return information related 
to his or her farm business, regardless of commodities produced--that 
is a very large ``regardless''--for Senators or staff who may be 
listening to this debate, the question would be, for example, Does that 
mean strawberries? Yes, it does. Sheep and wool? Both. In essence, it 
means just what it says, all returns from farm business.
  That total amount of revenue would qualify for a voucher to come from 
the Federal Government, redeemable to, first of all, help purchase a 
revenue insurance policy. This would not be crop insurance. This would 
be whole farm revenue insurance at an 80-percent level of coverage. Or 
it could be used to fund matching deposits for a farmer who chooses to 
participate in an income stabilization savings account. In essence, the 
farmer matches the voucher, and all of this goes into an interest-
earning savings account for that farm family. Or it could be used to 
help purchase, in addition to the whole farm insurance idea, any other 
approved risk management tool, once again, to help insure 80 percent of 
normal market revenue.
  An eligible farmer's annual voucher would be equal to 6 percent of 
the first $250,000 in average gross income from the farm from all 
sources. This would drop to 4 percent on the next $250,000 gross farm 
income up to $500,000, and 1 percent of the next $500,000 gross farm 
income up to $1 million, based on the tax return information as filed. 
Therefore, under this schedule, the maximum voucher would be $30,000.
  I appreciate, for those listening to that figure, that is some 
distance from the estimates of the committee-passed bill that a farmer 
might, in fact, under some circumstances, gain as much as $500,000 from 
program subsidies.
  Cynics, I point out to the Presiding Officer--and the Presiding 
Officer would not be one of these--but around the agriculture table in 
the past we have heard descriptions of what might be called ``the 
Christmas tree theory'' of the subsidies. In short, people who are very 
sophisticated point out that some farm families, who seem to have a lot 
of members, had so distributed their property into a number of farms, 
all of which seemed to qualify for the maximum amount. Ingenious 
Senators and Members of the House have tried to curtail this practice 
on occasion, but I do not see great success in doing that. Those who 
were able to contrive this had very good legal counsel and accounting 
counsel, as would befit the stature of the sums of money that were 
involved.
  In any event, one of the arguments around the table for a long time 
has been a recognition that perhaps the payments were too concentrated, 
first of all, by crop, by certain States, to certain people. So as a 
result, in one fell swoop, my reform cures this.
  First of all, every farmer in every State is on a level playing 
field. There are no historical program crops. A bushel of corn and 
revenue from that counts the same as a bushel of strawberries and the 
revenue that comes from that. I make that point because on the face of 
it the self-interests of Senators from most States would be to favor my 
bill.
  Senators may not have studied my bill. That is why I am tedious in 
trying to make the case that they should. Because they will find that 
in many cases only a single digit of farmers receive any benefits in 
their State. California, for example--a very large agricultural State--
only 9 percent of farmers in California receive anything from all of 
this.
  So farmers in California, listening to this debate today, will know 
that the Lugar proposal means that they participate. Some farmers in 
California may say: We really don't want any of this in our lives. We 
have some testimony to that effect, that farm programs inevitably lead 
to more and more entrants into a market, overproduction, disastrous 
prices, and dependence on the Federal Government. So they would say: 
Thank goodness we were spared all of this.
  So there may be Senators who have a majority of farmers who are 
asking to be spared the farm bill. But my recognition, at least during 
debates we have already had, is that many Senators have a different 
point of view. As a matter of fact, they want to know what is in any of 
this that may be helpful to their farm families.
  So I am saying, first of all, all of your farm families, for the 
first time in American history, qualify for a farm program. And they 
all qualify on the same basis. Furthermore, we try to recognize it is 
important they qualify only to a certain extent; that is, that the 
purpose of these transfer payments, from all taxpayers to some 
taxpayers, is to bring about some income stability for family farmers.
  You may say a 20-percent reduction in 1 year is not a great deal, but 
most of the arguments made to us come from people who have suffered 
weather disasters or trade disasters or extraordinary events in which 
really a much larger percentage of their income has been wiped out, and 
they hope to get some wholeness through emergency appropriations.
  There are very few businesses in America that would be able to 
purchase whole business insurance and guarantee that their revenues 
would be at least 80 percent of their 5-year average, and to do so, in 
essence, with a

[[Page S12849]]

premium paid for by the Federal Government.
  That is the proposition. And it brings stability to every farmer 
regardless of size. It recognizes that the bulk of the money must go to 
those farmers who have revenues of $1 million or less--even more 
pointedly, $500,000 or less. But that covers a prohibitive percentage 
of farmers in America, even though current farm programs are really 
geared to the very small percentage that it does not cover.

  This comprehensive revenue-based program would replace most 
traditional farm program supports, the latter of which my bill would 
phase out over the 3-year, 2002-2005 crop-year period. Essentially, the 
program that remains through this period is the loan deficiency payment 
program which has been the safety net of the 1996 bill. That is 
important so that while this transition is occurring, people are 
establishing the 5-year average. During the transition, they have some 
certainty that a national loan program for corn and other program 
commodities will continue at whatever the support may be at the local 
elevator in each of our States and counties.
  The risk management program supposes that a producer operates a farm 
that has $100,000 in average gross farm income at the start of his 
plan. Let's say $94,000 of that came from crop and livestock market 
receipts and $6,000 in government payments. The latter is likely to 
occur because of the hangover of the last AMTA payment of this bill, 
2002, or loan deficiency payments that may come in the program crops 
that have those payments. But in any event, this farmer would be 
eligible for a $6,000 voucher beginning in the year 2003. The farmer 
could use the voucher to purchase the 80-percent whole farm revenue 
insurance.
  Let me say that the premium is based upon the fact that the current 
farm bill and the committee-passed bill continue the basic crop 
insurance program with changes that we made last year. It is already a 
very generous crop insurance program. I will not go into anecdotal 
material with the Chair, but as one who has argued in favor of the 
program and in full disclosure, I have indicated that I have utilized 
the farm insurance program. It is possible the family of the 
distinguished Senator from Iowa, Mr. Grassley, has used the program; 
that is, we have paid premiums to a commercial insurer. I have no idea 
of Senator Grassley's level of coverage, but in the current crop-year, 
I selected the 85-percent policy, which is a very substantial policy. 
There is no other business in America in which I could have purchased 
that kind of insurance before my crop was even in, which gave me then 
the ability to go into the futures markets and to sell thousands of 
bushels that had not yet been planned, a reckless gesture without, in 
fact, the safety net that this insurance gives and thus some 
possibility of selling to the markets as opposed to the loan deficiency 
payment at the end of the trail.
  Other farmers in America have done that; as a matter of fact, many 
people who are much more involved than I am. But it is there. It 
remains there.
  Given the fact that already that premium has a very high Federal 
subsidy, some would estimate maybe 48 percent already paid for by the 
Federal Government, the voucher that comes, the $6,000 to our 
hypothetical $100,000 revenue farmer, solidly pays for the 80 percent. 
As this all works out in the fullness of time, it may buy more than 
that. But we shall see. I believe it is a conservative estimate. If it 
doesn't or he doesn't need the $6,000 entirely to buy the whole farm 
insurance, then there is money left over for the savings account. It is 
not lost.
  The whole purpose of all of this from the beginning was to bring some 
assurance, some stability, and some financial security to the family 
farmer.
  The aspects of this are reasonably clear. Yet I know, as I explain a 
complex program to many for the first time, that some would say we 
would need to walk around. The problem, as we all recognize, is that we 
are now debating a farm bill. Whether we should be walking around it 
longer is not for me to say. I am attempting to manage, with the 
distinguished chairman, and to expedite the passage of a good bill in a 
constructive way.

  But it is important that we recognize the need for the change in 
course that I have tried to identify because the failure to adopt what 
amounts to a substantially new course is to exacerbate the problems of 
the past, which I still believe are overproduction, low prices, greater 
instability, a built-in bubble in land values for which we shall pay at 
some point. It has been my good fortune as a farmer to have land that 
went way up in value in the 1970s. As I didn't either buy it or sell it 
in that period, I could watch happily, but then would watch with dismay 
a crash and burn scenario in the early 1980s, as that same land lost 
perhaps 60 percent of value, years entirely stripped off, a 
breathtaking, heart-stopping experience that was extended, however, not 
over 6 months but over 6 or 7 years, followed by a tedious movement 
back up the scale.
  If, in fact, you have a family farm that has longevity and you have 
the good fortune to last through all of this, it is interesting to talk 
about anecdotally, but it does not really affect your material 
prospects except on paper.
  Most farmers do not have that opportunity. As a matter of fact, we 
really have to gear programs for persons likewise who want to enter 
agriculture as well as to exit the scene as gracefully as possible.
  In short, my amendment strengthens very substantially the Federal 
safety net for low-income Americans, as I illustrated in the earlier 
part of this presentation. It has been crafted with the very generous 
help of those involved in the hunger movements all over our country and 
those who have had great experience and with whom it has been my 
privilege to work for the past 25 years on this committee.
  They come in year after year to advocate for the poor; to talk about 
the problems that a low-income person has with the administrative 
hassles of pages of estimates that would be very difficult for a 
sophisticated businessperson to give; the growing problems of persons 
who are hungry because they really could not figure out how to contact 
the system despite advocates for the poor who tried to guide them in; 
the inequities of the vehicle laws or the problems of savings or things 
that may seem incidental to people who have middle-income situations 
but are very tragic for others; on top of this, the welfare reform law, 
which had very good effects for many Americans but at the same time, as 
we now know and we heard testimony from Second Harvest about food banks 
and food pantries throughout the country. We have a counterintuitive 
situation of a nation in prosperity and yet a nation whose food banks 
frequently are running dry. These are problems that the Agriculture, 
Forestry, and Nutrition Committee has to think about.
  The political excitement of this debate comes in thinking about 
producers, although in fairness, most of us are also interested in 
nutrition ideas.
  It is important the degree to which we are interested. I pointed out 
earlier in my talk that we had tough times in 1995 and 1996 as a 
committee. Under the so-called reconciliation procedure at that 
time, we were ordered to cut spending by $23 billion. We solved it by 
cutting producer programs by $2 billion and food stamps by 21. Now, we 
have the good fortune of history that prosperity occurred in the 
country, so as a result many people left the Food Stamp Program and the 
savings eventually were $50 billion. Correspondingly, however, the $2 
billion in cuts in the producer programs did not last for long, and we 
spent not plus-30, but negative 50. So the disparities in our 
responsibilities have been substantial.

  Finally, let me once again offer what almost comes as a common scold, 
and that is that none of us could have predicted precisely that our 
country would enter a mild economic recession, and we pray that it is 
mild and short. Certainly, at the time we were discussing the budget at 
the beginning of this year, we heard the President of the United States 
in the State of the Union Address describe $3 trillion of surpluses 
over 10 years of time--the solution, perhaps, of Social Security 
disability, Medicare reform, of important educational advances, and 
much more; and we saw our own Congressional Budget Office, I recall, 
prophesying in the fiscal year we are now in that started October 1 a 
surplus of over $300 billion. By summer, that had been tempered down to 
176 before we left for the August recess. After September 11, it 
tempered

[[Page S12850]]

down to 50, double digits. Subsequently, a sober analysis has said, 
sadly enough, we will have a deficit this year.
  This is reinforced by reports from the Treasury yesterday that in the 
first 2 months of the fiscal year, September and October, the deficit 
was $63 billion. In part, that is because of when receipts come and 
when expenditures come and not a chunk of income is coming in. But last 
year it was $35 billion in the same period. So that is $28 billion 
more.
  There has not been this much of a rise in the first 2 months of the 
fiscal year in a long time. Last year, unfortunately, we suffered a 
budget deficit, year long. Perhaps we will recover, but most who are 
projecting say probably not for a few months.
  This may not make any difference to Senators one way or another. The 
mood has changed because we have been talking about war expenditures, 
about expenditures for New York City and elsewhere, on rebuilding. We 
are talking on and off about a stimulus package that may contain 
everything from tax cuts to substantial safety net enhancements. 
Perhaps we are all now of a mood that, in fact, we are in deficit 
finance. Therefore, the problem of dealing with it is different. And 
farmers, after all, should not be discriminated if we are going to have 
deficit finance for other people. On the farm we ought to be thinking 
about that.
  That would make more sense if this were a 1-year bill, but it is not. 
It is 5 years in the Senate version. The bill that passed the House is 
10 years. I have no idea where the conference will come out on these 
things. We are not writing the final bill. The House bill assumes 
really a perpetual agricultural crisis for the entire decade. It was 
written with the thought that a portion of that $3 trillion surplus 
ought to be spoken for, and quickly, by agriculture. Many members on 
the House committee would still contend that if we do not speak 
quickly, it will be gone. We have had some testimony to that effect 
from Senators, and some tempering by the majority leader who said the 
other day, not right away.
  We would have to act in a timely way, but on the other hand it would 
not disappear at midnight at the end of this year. Well, maybe not 
theoretically, but actually it is gone. We are in a deficit situation, 
and these will be expenditures on top of that.

  Why do I bring all of this up? Because essentially the scoring by the 
budget authorities in the commodity section of the Harkin substitute is 
$27.6 billion for a 5-year bill--from 2002 to 2006. The Harkin 
substitute has about $1.8 billion on the nutrition side in that 5-year 
period.
  Now, my bill has markedly different results, and I will try to 
explain some of them because this is not magic. My bill costs only $5.6 
billion in the commodity title in the first 5 years--not 27.6, but 5.6. 
My nutrition section is $3.7 billion, roughly double the $1.8 billion 
in the Harkin substitute. The figure of 5.6 would seem dramatically low 
for any sort of safety net operation, but it comes through the scoring 
process because we are phasing out a number of agricultural subsidy 
programs. So with the cost of these 6-percent vouchers for every dollar 
of agricultural income, which mounts up to a lot of money, lots more 
people are being included, lots more States and farms. But as you 
subtract the cost of the current agricultural subsidy programs, the net 
of this comes down to 5.6 for the 5-year period of time.
  I think that is an important contribution, in large part because I 
believe that theoretically my bill satisfies the safety net situation 
for more farmers and more States and more situations than does the 
Harkin substitute, however well motivated that might have been and 
generous in its payments. Clearly, demonstrably, tens of million of 
people are affected by this, and all the various States are going to be 
better off in the ripple effect of agricultural spending, farm families 
and farm communities.
  Furthermore, I believe that at a fairly small cost in the aggregate 
of all of this, the humaneness of nutrition changes is very important. 
I believe they will lead to greater social justice as we continue with 
welfare reform and the thought that there ought to be a meal for every 
American, even as we try to work with Americans to find work and 
responsibility.
  I appreciate the attention of the Chair to what has been an extended 
presentation. But this is a serious attempt to markedly change 
agricultural policy in this country. I appreciate that such changes are 
not easy to make, not easy to explain, and are worthy of a great deal 
of study. Nevertheless, I have attempted to do my best as one who has 
witnessed farm bills for 25 years and heard the debates and seen the 
results, and as one of perhaps a few Senators who actually experienced 
the results of these farm bills on my own farm property. It is not a 
large farm--604 acres, located now inside the city limits of 
Indianapolis, given the extension of our city on various occasions. But 
it is a corn farm, soybean farm, and a tree farm. It has made money for 
the last 45 years every year. We were fortunate. But, at the same time, 
I mention that because I will admit that the amount we have made is 
very small as a return on invested capital or what the farm was worth.
  That is the problem for all farms in America. I recognize that 
acutely, as one whose small wealth is tied up in this sort of thing. A 
4-percent return on invested capital is roughly what I see as sort of a 
gold standard that you work by. That is true whether it is the Lugar 
farm or all farm income in America. This past year was a bit over a 
trillion dollars, and with net-net farm income of something over $40 
billion, the 4 percent bobs up even as you look at USDA's figures. That 
makes farming a difficult proposition, and it always will be.
  These debates will continue because we are not talking about persons 
who are likely to be wealthy across the broad spectrum--a few cases, 
maybe deservedly so, from ingenuity, work, and perseverance--but the 
broad spectrum is mostly in difficulty.
  Under those circumstances, I talk about a realistic safety net that I 
think can be perpetuated at fairly low cost and is unlikely to have the 
political reaction or re-reaction from other taxpayers at various 
points when they visit these programs.
  Mr. President, I yield the floor, as others may have comments about 
this amendment. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Mr. President, on behalf of the majority leader, I announce 
for the Senate there will be no more rollcall votes tonight.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. HARKIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HARKIN. Mr. President, I want to speak for a little bit on the 
amendment now before us offered by the ranking member of our committee, 
Senator Lugar.
  The nutrition title is one of the most important titles in our farm 
bill. This is a part of the farm bill that talks about who we are and 
what we are about as a nation. To the extent we help people in lower 
income brackets, people who may be out of work, the elderly, the 
disabled, newly arrived immigrants, those who qualify because of income 
or status to have better nutrition, it helps all of us. It helps our 
health care system because these people are not always going off to an 
emergency room to get help; their health is better. It lessens the load 
on our health care system.
  Second, it helps in education. Kids who are fed, if they have a good 
nutritious breakfast, learn better. We know that. It also helps our 
farmers. This is a market. As one of my friends from my old days in the 
House--God rest him--Jerry Litton used to always say--he was a great 
Irishman. He died tragically in a plane crash. He represented a rural 
part of Missouri across the State line from my district. He used to 
say, if you are going to give a dollar to someone in this country, give 
it to

[[Page S12851]]

someone who is poor. They will spend it on food and that helps my 
farmers and it helps all of the country. And that is still true today.

  So to the extent we help these nutrition programs and bolster the 
nutrition programs, it helps our farmers. It is food. In any way you 
look at it, helping boost nutrition programs in this country is a win 
for everybody.
  In light of some of the cuts we have had in spending, in light of the 
downturn in the economy that we are experiencing now, in many ways if 
you just looked at that, Senator Lugar's proposal might make sense 
insofar as it expands spending on our nutrition programs. Keep in mind 
we have about $6.2 billion over 10 years for nutrition in our bill. The 
amount of money we have put in is about double what the House added in 
their nutrition program. I thought we did a good job in committee. 
Senator Lugar's amendment doubles what we had. I can see a lot of 
people might want to support that. That is pretty enticing.
  Keep in mind this bill is a balanced bill. We had to balance all the 
various interests with all the money we have. Therefore, when you look 
at that and try to balance the interests, you have to recognize you 
can't just boost one without drastically affecting the other. When you 
boost nutrition, it does help the farmers. But the Lugar amendment 
takes away loan rates. It phases them all out. Talk about something 
hurting our farmers, the occupant of the Chair knows how important loan 
rates are to farmers and to their livelihood. You cannot say, just by 
giving poor people more food this will more than make up for it. It 
will not.
  The Lugar amendment also takes out all of the direct payments. We 
have to help farmers bolster their income. All of the price support 
programs for dairy, peanuts, sugar, will be phased out. Again, trying 
to keep a balance, we have to keep these programs for farmers, to help 
them and their families. We also have to meet our nutritional needs for 
low-income people. That is what we did in a responsible fashion in our 
bill.
  Again, we have made changes. We opened it up more for immigrants, 
children, disabled, refugees, people seeking asylum. We have changed 
these things. We have opened it up and made it better. We had an 
increase in food stamp benefits to make up for the cuts that went on 
that we have endured over the last 5 years. Again, keep in mind the 
Food Stamp Program is an entitlement. If you qualify, you get it. 
Therefore, if there is more of a downturn in the economy and we have 
more people seeking assistance, they will not be denied food stamps.
  There is no limit in our bill. We don't say just so much and no more. 
If you are entitled, you get it. I don't want anyone to think somehow 
if the recession deepens, if more people are out of work or they are 
out of work longer, that somehow they will be severely restricted in 
the food stamps they get. That is not so.
  Mr. DORGAN. Will the Senator yield?
  Mr. HARKIN. I am delighted to yield.
  Mr. DORGAN. Mr. President, is it not the case that the piece of 
legislation that the Senator from Iowa brought to the floor of the 
Senate in both conservation and nutrition substantially improves what 
was written in the bill approved by the House of Representatives?
  Mr. HARKIN. Doubles it.
  Mr. DORGAN. If I might inquire further, the farm bill comes from the 
Senate Agriculture Committee, and in both areas of nutrition and 
conservation at a very substantial increase over present funding and 
over the funding of this proposal in the bill offered by the House of 
Representatives.

  Mr. HARKIN. That is true.
  Mr. DORGAN. Is it not the case that in the other area--we have 
nutrition, conservation, and then commodities--area, commodities, which 
is the support basically for that which the family farm is producing, 
that is the area where we need the help? The Senator from Iowa has 
produced a piece of legislation that in nutrition and conservation has 
substantial increases, and we are trying to preserve significant help 
for farmers who are out there trying to make a living during collapsed 
prices.
  I ask, is it the belief of the Senator from Iowa that what we need to 
do is now make sure that we have a decent price support for family 
farmers during tough times, especially a countercyclical price support 
that kicks in when commodity prices collapse? Is that the Senator's 
intent?
  Mr. HARKIN. I thank my friend from North Dakota for asking these 
questions. The Senator is absolutely right. We significantly increase 
both nutrition and conservation. As I mentioned earlier, we doubled it, 
and then we provided for a commodity program that has not only loan 
rates and direct payments but they are countercyclical. That is kind of 
a 50-cent word, but basically the prices really go down. We come in and 
help the farmers stay afloat. And we have a balance.
  I believe we have met our responsibility in meeting the nutritional 
needs of the people of this country.
  Senator Lugar goes even farther, and I will talk a little bit more at 
length about that, but we have met our responsibility in nutrition. We 
have met it on conservation. As the Senator points out, we have to meet 
it on commodities. We have to meet our obligation to keep our family 
farmers afloat and in business all over this country. That is what we 
have done.
  Quite frankly, the amendment of my friend from Indiana will phase out 
loan rates to zero. Not a little bit--to zero. It does away with all 
the direct payments that we had to our farmers, all price supports for 
dairy, peanuts, sugar--all are phased out. Everything is taken away. 
That is not in the best interests of people who are on food stamps or 
our kids who need nutrition. That is not in their best interests. We 
have to have a balance.
  Mr. DORGAN. Mr. President, I know the Senator is in the middle of a 
presentation, but the description of the underlying amendment sounds 
very much like the current law, Freedom to Farm, which had at its roots 
the notion that farmers should essentially accept whatever the 
marketplace offers and we do not need a farm program, so they set up 7 
years of declining payments, after which there is no farm program. The 
presumption was that this would ``transition''--that was the operative 
word in Freedom to Farm--farmers out of a farm program.
  The experience of the past 6 years is it has been a miserable 
failure. It does not work. It sounds like the proposition here is to do 
less of the same. The old ``more of the same''--this is less of the 
same, and the same didn't work.
  I ask the Senator from Iowa if he believes as I do that I do not give 
a hoot in terms of the commodity portion. I don't give a hoot about a 
bushel of grain. I care about a family who is trying to raise that 
grain or produce that grain on a farm. I care about the network of 
producers who represent family farmers living under this, trying to 
raise a family and raise a crop and whose hopes and dreams rest on the 
question of whether, when they get that crop off the field, everything 
is favorable that year when they take it to the elevator. It rests on 
the question, Is there a decent price somewhere above or near the cost 
of production? The answer in the past 5 or 6 years has been no. The 
more you sell, the more you raise; the more you produce, the more you 
are going to lose.

  So isn't it the case that really, while conservation and nutrition 
are very important--and in my judgment no one fights harder for that 
than the Senator from Iowa; he takes a back seat to no one. But isn't 
it also the case that the so-called commodity title with respect to 
what it represents in support for families, support for those economic 
all-stars in America, family farmers, ranks right up there with all the 
other considerations? In my judgment, it is right at the top of the 
considerations of why we should do a farm bill. Would the Senator 
concur with that?
  Mr. HARKIN. I like the way my friend from North Dakota has portrayed 
it because I think that is absolutely right, looking at both of them. I 
was just thinking about that when the Senator was asking the question.
  When we think about the nutrition side of it, we think of the 
families; we think of the kids; we think of the people involved and 
what it does to help them in their lives. When we think of the 
commodity programs, we should not be thinking of a bushel of wheat or a 
bushel of corn or a bale of cotton or hundredweight of rice or 
whatever. We ought to be thinking about the families who are involved 
in production. What are they like? What are they doing?

[[Page S12852]]

What are they doing for our country? How are they living? What are they 
doing for rural America? And what are we going to do if we lose them 
all? What happens when they get wiped out?
  I think the Senator from North Dakota has really, again, pointed out 
that we have to have this balance in this bill. The commodity title is 
one that does not go to support it. The Senator is absolutely right. It 
doesn't go to support a bushel of corn or a bushel of wheat. It goes to 
support a family farmer--their spouse, their kids, their livelihood, 
their communities all over rural America. The Senator is absolutely 
right on that.
  (Mrs. CLINTON assumed the chair.)
  Mr. DORGAN. Madam President, if the Senator will yield for one 
additional question, the commodity title is important here. We have an 
amendment that is now pending and I believe another major amendment 
that will follow it at some point, offered by two of our other 
colleagues. Both of these amendments tend to chip away at the commodity 
title and support for family farmers. The amendment pending does that. 
The amendment pending just eviscerates price supports for family 
farmers. But there is another one coming that is a major initiative 
that also just squeezes down this price support in a way that really 
doesn't provide much help at all to family farmers.
  It is very important, in my judgment, for us to turn back these two 
amendments because if we don't, we will be here scratching and clawing 
and debating a farm bill that doesn't really have much merit with 
respect to the livelihood of families who are trying to make a living 
on American farms.
  So our job, it seems to me, is to try to defeat the amendments that, 
in the commodities title, shrink that support for families who are 
trying to live on this country's farms.
  If I might, I held a hearing in the State of Iowa with my colleague, 
Senator Harkin. We had testimony about the big crop farms and all the 
big agrifactories in this country that are growing up, the behemoth 
enterprises. Everyplace a family farmer looks, they see somebody buying 
their grain, somebody buying their livestock, somebody hauling their 
grain. If they look at the railroads, mostly they are looking at 
monopolies. They say to the farmer: By the way, here is the price. If 
you don't like it, tough luck.

  If I might take one moment to say to the Senator from Iowa, Do you 
know a farmer in North Dakota, my State, pays more to ship grain from 
North Dakota to the west coast than a farmer from Iowa does moving 
grain from Iowa through North Dakota to the west coast? Why? Because 
the railroad says they have to.
  A farmer from Bismarck, ND, puts a carload of grain on the track at 
Bismarck and ships it to Chicago--let me give you the breakdown on the 
transaction here. If he ships a carload of grain 400 miles, Bismarck to 
Minneapolis, they charge him $2,300. But if a farmer in Minneapolis 
puts a carload of wheat on the track in Minneapolis and ships it to 
Chicago, about the same distance--$2,300? No, $1,000. So the North 
Dakota farmer pays $2,300 to send a carload of wheat 400 miles, and the 
farmer on the next segment, Minneapolis to Chicago, pays $1,000--less 
than half.
  Why? Because on the second segment there is competition; on the first 
there is not. The monopoly says: Here is what you are going to pay, and 
you will pay through the nose, and if you don't like it, tough luck.
  For chemicals--spray, fertilizer--it is the same thing: Here is what 
you pay. Farm equipment, same thing. Virtually everywhere the farmer 
looks, grain trade--they ship that kernel of wheat and puff it up or 
crisp it or shred it and put it on the shelf, and they sell the grain 
the farmer got nothing for for $4 for a small cardboard box. It is just 
the farmer who doesn't get a due return, but the people who crisp it 
and puff it are making money hand over fist.
  The only people losing their shirts for 6 years are the family 
farmers because commodity prices have collapsed. The family farmers 
have taken a financial bath. They are hanging on by their financial 
fingertips, and everybody who touches the product that farmers produce 
has been making money with it. The railroads are making big money 
hauling it. The cereal manufacturers are making big money crisping it 
and popping it. It is just the farmer. And people say it doesn't 
matter.
  It matters to this country. This country's character is formed by who 
we are, what we have as elements of producers.
  The fact is, we need family farmers as part of our culture. They 
create the family values that move from family farms to small towns to 
big cities and nourish and refresh this country. They are a very 
important part of our economy.
  The Senator from Iowa has been very generous with his time, but I 
want to say on--I know he is speaking against this amendment--this 
amendment takes the commodity title and says we are going to reduce 
support for families. That is not the right approach; it is exactly the 
wrong direction; and it means we have not learned anything in the last 
6 years. What we should have learned in the last 6 years is that we 
need countercyclical price supports. As the Senator said, that is a 50-
cent word, but what it means is you provide help to the people who need 
help--not Freedom to Farm--which says we provide help no matter what 
the price is. When people need help, we lend a helping hand because 
they are helping this country mightily. They are our all-stars.
  I thank the Senator for his leadership and his help in opposing this 
amendment.
  Mr. HARKIN. I thank the Senator for his eloquence and for his focus 
on what this is all about.
  I know a lot of what the Senator from North Dakota said about 
shipping of the grain is hard to follow. I understand that. But I hope 
the Senator from North Dakota makes the point time and time and time 
again here in this debate on this farm bill. That is that the family 
farmer is at sort of the end of the whip out there. If we don't have a 
good competition title and if we don't have something that helps those 
family farmers to have more bargaining power, they are lost. They are 
lost.
  I thank the Senator from North Dakota for pointing that out. I hope 
he continues to do that. I say to my friend from North Dakota also, 
actually the amendment by the Senator from Indiana would be less than 
Freedom to Farm. There would be less support there for agriculture than 
Freedom to Farm.
  I did want to correct the statement I made. I said the Lugar 
amendment would phase out all of the loan rates. I guess that is not 
quite right. I guess I didn't read it closely enough. Actually, by 2006 
they would phase it down to 1 percent.
  I guess that is about nothing, now that I think about it. But there 
is 1 percent of the previous 5-year average, which really is kind of 
laughable when you think about it. But it was pointed out to me it 
wasn't zero, it was 1 percent of the previous 5-year price. Right now 
we are at about 85 percent, if I am not mistaken. So you go from 85 
percent of the previous 5 years to 1 percent.
  I want the record to be clear, the Lugar amendment does not 
completely phase out loan rates. It brings it down to 1 percent. So 
there, I just wanted to make sure that was correct.
  I also wanted to point out that in talking about the support for 
families, for low-income families, to make sure they get enough 
nutrition, our bill provides $780 million additional money for 
commodity purchases for food assistance. So there is three-quarters of 
a billion dollars more to purchase fruits and vegetables, things such 
as that, meats, meat products, that would go to help low-income 
families meet their nutritional needs.
  The Lugar amendment has much less in it than I have in mine.
  Mr. REID. Madam President, will the Senator yield for a unanimous 
consent request?
  Mr. HARKIN. Yes.
  Mr. REID. This has been cleared with the chairman and ranking member 
of the committee. Following this unanimous consent agreement, anyone 
who wants to talk on this amendment can talk as long as they wish 
tonight.
  Madam President, I ask unanimous consent that when the Senate resumes 
consideration of S. 1731 tomorrow morning, Wednesday, December 12, 
there be 60 minutes of debate

[[Page S12853]]

prior to a vote in relation to the Lugar amendment No. 2473 with the 
time equally divided and controlled in the usual form, that no second-
degree amendments be in order, nor to the language proposed to be 
stricken prior to the vote.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. REID. I appreciate very much the Senator yielding for this 
important matter.
  Mr. HARKIN. Madam President, I understand we will come in tomorrow 
morning and I will make my comments at that time on the Lugar 
amendment.
  Mr. REID. Madam President, if the Senator will yield, the unanimous 
consent agreement didn't call for it, but the Senate will come in at 
9:30 tomorrow morning, and the Senator from Iowa and the Senator from 
Indiana, Mr. Lugar, will control the time.
  Mr. HARKIN. There will be 1 hour for debate from 9:30 a.m. until 
10:30 a.m. equally divided, and the vote will occur on the Lugar 
amendment at 10:30 tomorrow morning?
  Mr. REID. Yes.
  Mr. HARKIN. I thank the leader. I will have more to say about this 
tomorrow morning.
  But the Lugar amendment takes away all of the programs that we have 
for farmers and gives them a voucher by which they can go out and 
purchase a whole farm revenue insurance program which will give them a 
guarantee of up to 80 percent. They can contribute an amount at least 
equal to the amount of the voucher to a risk management stabilization 
account, and they can redeem the voucher for cash payment and use the 
payment to carry out one or more risk management strategies that are 
sufficient to guarantee a net income from all agricultural enterprises 
of at least 80 percent.
  That is pretty convoluted. Quite frankly, at a time when our farmers 
are just about at their wit's end right now to take what we carefully 
fashioned in a bipartisan fashion--and this is a bipartisan bill that 
we have on the floor--and just throw it out for an experiment, I think 
we just can't do that right now. That would disrupt all of agriculture 
and it would disrupt the markets. It would be chaos. The adoption of 
the Lugar amendment would just mean chaos. The markets would not know 
what to do. Farmers would not know what to do. Bankers would not know 
what to do. A farmer going in to get a loan early next year for seed 
and fertilizer or maybe to buy a piece of equipment or get the 
necessary funds to farm--that is the way people farm. They go in and 
get the credit. The banker says: I don't know what to do because I do 
not know what kind of program there is. With the Lugar amendment, they 
would have absolutely no idea what they would be doing.
  I think the Lugar amendment is probably something you put out there 
to debate and people talk about it and they think about it. Maybe you 
massage it around for a while, but it is not something you just do all 
of a sudden and leap off the deep end.
  We cannot take our loan rates down to 1 percent. We cannot do away 
with direct payments. We can't take away all of the price supports over 
the next 5 years for dairy and for peanuts, sugar and everything else. 
That would be catastrophic.
  While I applaud Senator Lugar for his strong support--and I know it 
is genuine and sincere--for nutrition and nutrition programs, the way 
he has gone about getting the money by devastating the commodity title 
is in no one's best interest. It is not in the best interests of low-
income families; it is not in the best interests of our farm families; 
and certainly it is not in the best interests of our country.
  I reserve my remarks for tomorrow morning. I suggest the absence of a 
quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. SESSIONS. Madam President, I ask unanimous consent the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SESSIONS. Madam President, I ask unanimous consent to be allowed 
to proceed as in morning business for 15 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The remarks of Mr. SESSIONS pertaining to the introduction of S. 
1804 are printed in today's Record under ``Statements on Introduced 
Bills and Joint Resolutions.'')
  Mr. SESSIONS. Madam President, I suggest the absence of a quorum.
  Mr. PRESIDING OFFICER. The clerk will call the roll.
  The senior assistant bill clerk proceeded to call the roll.
  Mr. REID. Madam President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Madam President, I ask unanimous consent that the previous 
order with respect to the debate time on the Lugar amendment No. 2473 
be modified to provide for a reduction of 10 minutes--5 minutes from 
each side--with the remaining provision remaining in effect.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Madam President, we will vote at approximately 10:20 
tomorrow morning, maybe 10:25.

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