Congressional Record, Volume 148 Issue 9 (Thursday, February 7, 2002)

[Congressional Record Volume 148, Number 9 (Thursday, February 7, 2002)]
[Senate]
[Pages S441-S467]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

AGRICULTURE, CONSERVATION, AND RURAL ENHANCEMENT ACT OF 2001

The ACTING PRESIDENT pro tempore. Under the previous order, the
Senate will now resume consideration of S. 1731, which the clerk will
report.
The assistant legislative clerk read as follows:

A bill (S. 1731) to strengthen the safety net for
agricultural producers, to enhance resource conservation and
rural development, to provide for farm credit, agricultural
research, nutrition, and related programs, to ensure
consumers abundant food and fiber, and for other purposes.

Pending:

Daschle (for Harkin) amendment No. 2471, in the nature of a
substitute.
Daschle motion to reconsider the vote (Vote No. 377--107th
Congress, 1st session) by which the second motion to invoke
cloture on Daschle (for Harkin) amendment No. 2471 (listed
above) was not agreed to.
Durbin/Lugar amendment No. 2821, to restrict commodity and
crop insurance payments to land that has a cropping history

[[Page S442]]

and to restore food stamp benefits to legal immigrants who
have lived in the United States for 5 years or more.

The PRESIDING OFFICER (Mr. Reid). The Senator from Indiana.

Amendment No. 2821

Mr. LUGAR. Mr. President, I am pleased that in a few moments the
Senate will vote on the Durbin amendment that restores benefits to
legal immigrants in our country. We had a good debate last evening
which illuminated the fact that there are as many as 500,000 Americans
who are able to meet the criteria of having lived in this country 5
years or having had a work experience for 4 years who--and most
importantly their children--due to confusion of the regulations
frequently have not had the Food Stamp Program and the proper nutrition
that might come from that. But we are going to change that. It is a
strong bipartisan force.
The President of the United States has spoken forcefully on these
issues and has commended the activity that is encapsulated so well in
the amendment of the distinguished Senator from Illinois.
I am pleased to join him in hoping that we will have if not, a
unanimous vote, a nearly unanimous vote. It is both a humanitarian
cause and a fairness cause and a considerable extension of the
nutrition safety net for all Americans.
This seems to me to be a very important objective of this farm bill
because we are the Senate Committee of Agriculture, Nutrition, and
Forestry and we have taken the nutrition title very seriously.
The Senator from Illinois has found ways that we can enhance that
title very substantially. I commend that effort and ask all Senators to
vote in favor of this amendment.
I thank the Chair.
The PRESIDING OFFICER. The Senator from Illinois, Mr. Durbin.
Mr. DURBIN. Mr. President, I, first, thank my colleague from the
State of Indiana. This is a great day. We have this great alliance of
two adjoining States--Illinois and Indiana--for the good of people all
across the United States. I thank the Senator for his very kind words.
Before I address the merits of the bill, the substance, there are two
modifications which have been proposed. I would like to offer one from
Senator Dorgan, and I ask the Senator from Indiana if he would do the
same for Senator Gramm of Texas, who has offered a modification.

Modification to Amendment No. 2821

Mr. President, I send this modification to the desk of the amendment
which has been offered. I ask unanimous consent it be reported.
The PRESIDING OFFICER. Without objection, it is so ordered. The
amendment is so modified.
The modification is as follows:

On page 2, strike line 13 and replace with the following:
``(a) Definitions.--
On page 2, after line 21 insert the following:
``(3) In general.--The term `considered planted' shall
include cropland that has been prevented from being planted
at least 8 out of the past 10 years due to disaster related
conditions as determined by the Secretary.''

Mr. DURBIN. Let me make a correction for the Record. Senator Conrad
offered this modification, I believe, not Senator Dorgan. I believe the
Senator from Indiana may offer a modification on behalf of the Senator
from Texas.
Mr. LUGAR. I thank the distinguished Senator for that invitation.

Further Modification To Amendment No. 2821

Mr. President, I do send to the desk the modification from Senator
Gramm.
The PRESIDING OFFICER. Without objection, it is so ordered. The
amendment is so modified.
The modification is as follows:

On page 6 strike lines 4 through 12 and insert the
following:
``(M) Food stamp exception for certain qualified aliens.--
``(i) With respect to eligibility for benefits for the
specified Federal program described in paragraph (3)(B),
paragraph (1) shall not apply, subject to the exclusion in
clause (ii), to any individual who has continuously resided
in the United States as a qualified alien for a period of 5
years or more beginning on the date on which the qualified
alien entered the United States.
``(ii) No alien who enters the country illegally and
remains in the United States illegally for a period of one
year or longer, or has been in the United States as an
illegal alien for a period of one year or longer, regardless
of their status upon entering the country or their current
status as a qualified alien, shall be eligible under clause
(i) for benefits for the specified Federal program described
in paragraph (3)(B).
``(iii) Clause (ii) shall not apply to a qualified alien
who has continuously resided in the United States for a
period of 5 years or more as of the date of enactment of this
Act.''

Mr. DURBIN. Mr. President, let me say at the outset that the
modification requested by Senator Conrad is one that merely defines a
term within the bill and does it in a fashion that I think is entirely
reasonable. It says that if land has not been cropped or planted
because it has been in a disaster status, certainly, that will not be
covered by the amendment which I have limiting the opportunities for
Federal payment. This is entirely reasonable. I am happy to accept it.
On the modification by the Senator from Texas, Mr. Gramm, I have
agreed to this, even though I have serious misgivings about it. But I
have the assurance of the Senator from Texas, and all Senators who are
now engaged in this debate, that we will continue to look at this
extremely closely as we approach the conference committee to make
certain we have done something that is fair and reasonable.
But it is in the spirit of moving this forward for the 260,000 legal
immigrants who will now be eligible for food stamps in our country that
I have agreed to and accept this second-degree amendment.
As the Senator from Indiana has alluded to, what we have done is
twofold. What we have said is, if you have cropland in America that has
not been planted, or you have not produced on that land at least 1 year
out of the last 5, or 3 out of the last 10, in that circumstance, you
cannot qualify for Federal assistance.
That is an effort to make certain we don't encourage overproduction
for Federal subsidy. The farmer still has the opportunity to plant the
land and to harvest the crop and make a profit, if he sees fit. But
under this amendment, he would be limited. He would not be able to
receive Government subsidy or Government support. We make specific
exceptions, which I described yesterday in the debate.
The second part of this amendment takes the savings of $1.4 billion
and uses it to provide eligibility for food stamps for legal
immigrants. This is something that was changed in 1996. It is a change
which has worked a great hardship, particularly on poor children across
America. I remind all listening to the debate, we are only talking
about legal immigrants being eligible for this relief.
President Bush in his budget message has endorsed this concept. Even
former Speaker Gingrich, who was the author of the original legislation
prohibiting food stamps, has come around to the position that we should
change it. We now have the appropriate moment in time to move forward
with what is a very humane and positive thing for children across
America, particularly for families of legal immigrants.
We do two things in this legislation. We provide for a limitation on
Government spending when it comes to farm programs so that new land is
not brought into production to take advantage of Federal programs. We
take the savings from that amendment and use it to provide food stamps
for children across America.
Last night it was my great fortune to be at an event honoring former
Senators George McGovern and Bob Dole for their work in the field of
nutrition and their cooperation over many decades. They pointed with
great pride to the creation of the Food Stamp Program which has, with
the School Lunch Program and a few other commitments by the Federal
Government, helped the poorest of the poor in America to receive basic
nutrition and sustenance. The purpose of this Durbin amendment,
supported by Senators Harkin, Lugar, Wellstone and many others, is to
continue in that tradition.

I yield the floor.
The PRESIDING OFFICER. The Senator from Indiana.
Mr. LUGAR. Mr. President, I stress again that the amendment is
identical to President Bush's budget proposal. I think all Senators
appreciate that. I want to establish that again.
Secondly, I want to establish that the amendment does not affect in
any way a producer's eligibility for conservation programs. It applies
only to

[[Page S443]]

commodity programs and crop insurance. I point out that the land which
exists in the Conservation Reserve Program would be eligible, and the
answer is, yes, CRP land specifically is exempted from the commodity
programs and crop insurance.
These questions have been raised because they are material to the
savings in the bill that are now to be applied for this important food
stamp reform.
Having said that, I commend the amendment again to Senators, and I am
hopeful we will have a strong vote in support.
Mr. HARKIN. Mr. President, this amendment is an important expansion
of the Committee's nutrition title and I am proud to be a co-sponsor of
the Durbin amendment along with Senator Lugar and others. It builds on
our provisions to restore benefits to legal immigrant children without
the 5 year waiting period and apply more reasonable food stamp
eligibility rules to working, tax paying immigrants. The amendment will
correct an aspect of welfare reform that went too far.
Legal immigrants have made countless contributions to our country but
many are now in trouble. They are disproportionately represented in the
service jobs that have been hardest hit in the current recession. So
now is an opportune time to make improvements to immigrant eligibility
in the Food Stamp Program.
I also want to focus on children for a minute. We have also heard
that from 1994 to 1998, 1 million poor citizen children of immigrant
parents, left the program . . . a 74 percent decline for this group.
These are children who are entitled to participate in the program but
whose parents were confused about eligibility.
Do not be mistaken, this issue affects most States in our country.
For example, more than half of all low-income children in California
live with a non-citizen adult. Some of these children are citizens and
others are immigrants. Between 30 percent and 40 percent of low income
children in Arizona, Nevada, Texas, Colorado, Florida, Idaho, and New
York live in families with a non-citizen. In my own State of Iowa,
approximately 14 percent of low income children live in families with a
non-citizen. We have seen time and again that in households where there
are Food Stamp eligible children who live with a non-citizen adult,
often time the adult does not seek out the assistance for the child.
Taken together, the 1998 bill that restored benefits to some children
which I supported, along with this amendment and our immigrant
provisions in the underlying bill, will immediately help to prevent
many children from going to bed hungry at night. Their parents, will
also be able to participate in the program once they have worked in
this country for at least 4 years or have resided in the U.S. for at
least 5 years.
Now, for anyone who argues that people would move to this country to
wait five years to receive a ``generous'' food stamp benefit, I want to
remind all of us that the average household received a benefit of $175
per month in 2000. A family of 3 working 30 hours a week in a minimum
wage job got just over $250 per month. That same family working 40
hours per week at $7.50 an hour received under $70 per week. In fact,
USDA just reported that food stamp recipients spend about 70 percent of
their monthly benefits the first week and 90 percent by the end of the
second week. People who participate in the Food Stamp Program are not
living ``high on the hog'' and they are certainly not coming to this
country for that benefit.
Now, others before me have mentioned that 16 States spend their own
funds to provide food assistance to legal immigrants made ineligible by
welfare reform. Under this proposal, those States would now be able to
devote their State dollars to other worthwhile and much needed
initiatives.
Finally, I, too, want to commend the President for including this
provision in his 2003 budget proposal and Newt Gingrich who indicated
that welfare reform went too far when it removed the ability of legal
immigrants to participate in the Food Stamp Program.
Again, I am pleased to join Senators Durbin, Lugar, and others in co-
sponsoring this amendment that will help provide nutrition for this
valuable group of people in our country.
The PRESIDING OFFICER. The Senator from Illinois.
Mr. DURBIN. Mr. President, I ask unanimous consent that Senators
Levin and Corzine be added as cosponsors of the amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Indiana has 2 minutes.
Mr. LUGAR. Mr. President, I yield back that time and 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. DURBIN. 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. DURBIN. Mr. President, I ask, pursuant to the unanimous consent
agreement, that we proceed. I ask for the yeas and nays on the pending
Durbin amendment.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second. There is a sufficient
second.
The question is on agreeing to amendment No. 2821, as modified. The
clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. NICKLES. I announce that the Senator from Tennessee (Mr.
Thompson), the Senator from Arizona (Mr. McCain), and the Senator from
New Mexico (Mr. Domenici) are necessarily absent.
The ACTING PRESIDENT pro tempore. Are there any other Senators in the
Chamber desiring to vote?
The result was announced--yeas 96, nays 1, as follows:

[Rollcall Vote No. 17 Leg.]

YEAS--96

Akaka
Allard
Allen
Baucus
Bayh
Bennett
Biden
Bingaman
Bond
Boxer
Breaux
Brownback
Bunning
Burns
Byrd
Campbell
Cantwell
Carnahan
Carper
Chafee
Cleland
Clinton
Cochran
Collins
Conrad
Corzine
Craig
Crapo
Daschle
Dayton
DeWine
Dodd
Dorgan
Durbin
Edwards
Ensign
Enzi
Feingold
Feinstein
Fitzgerald
Frist
Graham
Gramm
Grassley
Gregg
Hagel
Harkin
Hatch
Helms
Hollings
Hutchinson
Hutchison
Inhofe
Inouye
Jeffords
Johnson
Kennedy
Kerry
Kohl
Kyl
Landrieu
Leahy
Levin
Lieberman
Lincoln
Lott
Lugar
McConnell
Mikulski
Miller
Murkowski
Murray
Nelson (FL)
Nelson (NE)
Nickles
Reed
Reid
Roberts
Rockefeller
Santorum
Sarbanes
Schumer
Shelby
Smith (NH)
Smith (OR)
Snowe
Specter
Stabenow
Stevens
Thomas
Thurmond
Torricelli
Voinovich
Warner
Wellstone
Wyden

NAYS--1

Sessions

NOT VOTING--3

Domenici
McCain
Thompson
The amendment (No. 2821), as modified, was agreed to.
Mr. LUGAR. 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. HARKIN. Mr. President, for the benefit of the Senators, I have a
parliamentary inquiry. Under the unanimous consent agreement we have
entered into, what is next?
The ACTING PRESIDENT pro tempore. Under the previous order, the
Senator from North Dakota, Mr. Dorgan, is recognized to offer an
amendment for himself and the Senator from Iowa, Mr. Grassley,
regarding payment limitation. There has been an agreement there will be
1 hour 45 minutes of debate prior to the vote in relation thereto.
Mr. HARKIN. The Dorgan-Grassley amendment is next, with 1 hour 45
minutes evenly divided?
The ACTING PRESIDENT pro tempore. That is correct.
Mr. HARKIN. And the vote will occur--at the end of that 1 hour 45
minutes?
The ACTING PRESIDENT pro tempore. It will.
The Senator from North Dakota.

Amendment No. 2826 to Amendment No. 2471

(Purpose: To strengthen payment limitations for commodity
payments and benefits and use the resulting savings to
improve certain programs.)

[[Page S444]]

Mr. DORGAN. Mr. President, I will be sending an amendment to the desk
on behalf of myself, the Senator from Iowa, Mr. Grassley, and joined by
cosponsors Mr. Hagel, Mr. Johnson, Mr. Lugar, Mr. Fitzgerald, Mr.
Nelson, Mr. Ensign, Mr. Wellstone, Mr. Durbin, Mr. Torricelli, Mr.
Kohl, and Mr. Brownback. I send the amendment to the desk and ask for
its immediate consideration.
The ACTING PRESIDENT pro tempore. The clerk will report.
The bill clerk read as follows:

The Senator from North Dakota, [Mr. Dorgan], for himself,
Mr. Grassley, Mr. Hagel, Mr. Johnson, Mr. Lugar, Mr.
Fitzgerald, Mr. Nelson of Nebraska, Mr. Ensign, Mr.
Wellstone, Mr. Durbin, Mr. Torricelli, Mr. Kohl, and Mr.
Brownback, proposes an amendment numbered 2826 to amendment
No. 2471.

Mr. DORGAN. I ask unanimous consent reading of the amendment be
dispensed.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
(The text of the amendment is printed in today's Record under
``Amendments Submitted.'')
Mr. HARKIN. I understand there is 1 hour 45 minutes evenly divided.
The ACTING PRESIDENT pro tempore. The Senator is correct.
Mr. HARKIN. I ask unanimous consent that the Senator from Arkansas,
Mrs. Lincoln, be in control of the time in opposition to the amendment.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.

Mr. DORGAN. Mr. President, I am pleased today to offer the amendment.
I ask I be allowed as much time as I may consume, following which I
expect Senator Grassley, who has worked with me in constructing this
amendment, will be recognized.
This amendment is about limitation on payments in the farm program.
We always have people coming to the floor of the Senate talking about
the requirement to help family farmers in our country. The reason I
support a farm bill, the reason I fight so hard to try to get good farm
policy, is to help family farmers.
What do I mean by family farmers? I am talking about people out there
living under a yard light trying to raise a family and trying to
operate a family farm and raise food. They go to town and buy their
supplies. I am talking about a network of food producers scattered
across this country that represents, in my judgment, food security for
our country.
This issue of helping family farmers with a safety net in the form of
farm program payments during tough times is something that has become
much different over a long period of time. It is not the case that we
are fighting over farm program payments for family farmers. There is
some of that in the farm bill, but all of us recognize there is in this
farm bill substantial payments to some of the biggest operators in the
country that have nothing to do with families, nothing to do with
family farming.
Let me cite some examples of who gets farm program payments. Fortune
500 companies get payments under the farm program; not much about
families there. City dwellers who have millions of dollars, who need
the farm program the least and do not have anything to do with the
family farm, get farm program payments. Chase Manhattan Bank, farm
program payments; colleges and universities--the list goes on forever.
This is about family farming, in my judgment. I am sure those who
support this amendment, and there are many in the Chamber, are always
asked the question: If you talk about family farmers, what do you mean
by family? Define a family farm, they say. I defy you to tell me what
it is.
If we took 10 minutes, we could agree on what it is not. Michelangelo
once sculpted David. They asked: How did you sculpt David?
He said: Easy; I took a block of marble and chipped away everything
that was not David.
We can chip away everything that is not a family farm and have a
decent idea of what a family farm is not. Is it a New York bank
operating land in one of our States? I don't think so. Is a family
farmer a piece of ground owned by somebody who has lived in Los Angeles
for 40 years and the only time that person has come back to the family
farm area is for Thanksgiving, twice in 40 years; is that a family
farmer? I don't think so.
Is that where you want farm program payments to go? Or do you want,
in small towns on Saturday night, to have a vibrant Main Street where
people come to town to buy supplies and park their vehicles? They are
families living on the farm and farming our land and raising our food,
producing our food and doing it by creating a network of broad-based
economic ownership on America's farms. Is that what we are talking
about? I think so.
What is this amendment? This amendment provides a $275,000 payment
limit. Some will roll their eyes and say: Are you kidding me? Two
hundred seventy-five thousand dollars and you think that is a limit?
They will say it ought to be much lower than that. We will have trouble
getting this passed today because there are people who want it much
higher and some want no limits at all.
We propose $275,000. On direct and countercyclical payments there is
a $75,000 limit; marketing loan gains and loan deficiency payments, a
$150,000 limit; a husband and wife allowance, $50,000--for a total
limitation of $275,000.
Now, this Senate bill has a $500,000 limit, but it does not get rid
of triple entities so you can collect more than that. Current law is
$460,000, which means you can collect more than that because of triple
entity rules and other things. The House bill is $550,000, and again we
allow triple entities and so on. So these are not real limits. Ours is
a real limit.

We just talk about payments going to a tax ID, and we determine who
the taxpayer is here--this is not about taxes but it is determining who
the individual is--and we have a limitation.
We have seen a lot of these stories--incidentally, these are the
kinds of stories which I think will ruin the climate in which we do
farm bills in the future. If we do not do something about this, the
American people and taxpayers generally are going to say that is not
why we are paying taxes. We really support family farms. We believe
family farms are important for America. But we believe we are not
paying taxes so you can transfer money to the tune of millions,
hundreds of millions, perhaps billions of dollars, to those who need it
least and ought not be getting farm payments.
This talks about a farm operation, a 61,000-acre spread, $30.8
million in sales last year, receiving $38 million in Federal crop
subsidies in 5 years. Is that what we are here for? Is that what this
fight is about, to try to help family farmers? I do not think so. That
is not why I am interested in this business.
Here is a letter from a North Dakota farmer, a person I have known
for some while. He is a good farmer. His son also started farming.

Dear Senator Dorgan: I know you are aware of the really
large operations in rural areas that are getting the big farm
payments. I feel strongly against these large payments which
are set forth in the current law. I hope you can fix this in
the farm bill.
The biggest operations keep getting the bulk of the farm
benefits while the small farmers are getting squeezed out of
the rural areas. When this happens, the family farm operation
can't compete with the larger enterprises because of the
financial disadvantages. Cash rents go up because of the huge
payments to these big operations, causing smaller farms to
quit.

In my judgment, if our goal is not to preserve a network of family
producers on America's farms, then we don't need a farm program, we
don't need a Department of Agriculture; get rid of it all. The
Department of Agriculture started under Abraham Lincoln and had nine
employees. Now it has become this behemoth organization. But if our
goal is not to try to protect, nurture, and assist family farmers over
price valleys because they are too small to be able to survive these
precipitous international price drops for their crops, if our goal
isn't to do that, get rid of the whole thing.
If that is our goal--and I believe it ought to be; I believe that is
why the American people support a farm program--then let's shape this
farm program in a way that really does target the help to family
producers.
I have told so many stories about family farmers and why I believe
passionately about what this issue should mean to our country. In
Europe they

[[Page S445]]

have a vibrant rural economy. Go to a small town in Europe on Saturday
night and see the main street full of pickup trucks and small cars. Do
you know why? Because Europe has said we have been hungry before and we
don't want to be hungry again and part of our national security is our
food security and part of that is rooted in the notion of trying to
preserve a network of family producers on the land in Europe. They have
a farm program that does it. We ought not to disparage their farm
program, we ought to applaud it, to say the goal of keeping small
family producers, family operations, on the farm to produce a food
supply is a laudable goal.

Some in this Chamber will say this notion of a family farm is like
the little old diner that got left behind when the interstate came
through. It is really fun to talk about it, but it is not real and it
is not today's economy.
We can have the kind of economy we want. We can have the kind of
economy we choose. With farm policy, we can decide that our future is
in 61,000-acre operations where we give $38 million in farm price
supports from the taxpayer to the biggest agrifactories in the country,
or we can decide that those people out there--mothers, fathers, sons,
daughters--with 500 acres, 2,000 acres, yes, 8,000 acres, 10,000 acres,
trying to make a living, families trying to make a living out there on
America's farms are what are really important to this Senate and this
Congress. We can do that in public policy, but we can only do that if
we pass this payment limitation amendment.
There is a lot to talk about. We will have people stand up and say:
This is outrageous; you are trying to penalize people who got big. That
is not the case at all. We only have a certain amount of money. My
point is, let's layer it in from the bottom up to help those who need
help the most. It doesn't penalize anybody. It just says: Here is the
kind of economy we want. Here is what we want to invest in for
America's future. Here is what we want to do to help family farmers in
our country.
Let me conclude by saying I represent a farm State. There are some in
my State who will be aggravated by this amendment. They are the ones
who would be affected by the limit. This is important and good public
policy so we can provide the best possible price supports during tough
times to families who are farming America's land. That is the purpose.
It is not to penalize anybody. It is just to invest as best we can in
those family farmers struggling during price depressions, which have
existed now for some years, and to say to them: We care about you; we
care about the future; we want you to hang on because we want family
farming as a part of America's future.
Mr. President, I yield the floor. I reserve the remainder of our
time.
I assume the opponents have an equal amount of time. I believe
Senator Grassley will be recognized next, on our side, as soon as an
opponent is recognized.
The PRESIDING OFFICER (Ms. Stabenow). Under the order, time is
equally divided. The Senator from Arkansas controls the time in
opposition to the amendment.
The Senator from Arkansas.
Mrs. LINCOLN. Madam President, I rise today in opposition to the
underlying amendment on payment limitations. It seems that lately there
has been a lot of talk about this issue in newspapers, in the Halls of
Congress, and in rural coffee shops around the country. We have all
heard the horror stories about plutocrats getting rich off the Federal
dole, some of which my colleague has mentioned.

Most of these stories are generated by groups that claim to represent
the interests of the family farmer but, in truth, could not care less
about the family farmer. Instead, they wouldn't shed a tear to see
American agriculture dead and buried and the land that our fathers have
farmed left to lie fallow forever.
It is shameful enough that those who spread these stories claim to do
so in the name of the farmer while in fact working to remove him from
the very land he farms. But it is downright vile that they do so by
hawking misleading information and creating a false impression of the
persons on the land. This misleading tone has unfortunately served as
an undercurrent for these hallway and rural coffee shop debates.
The people hurt by these misleading deceptions are the same farmers
and their families that we in Congress say we are trying to protect.
These are the families who produce our food and fiber.
I am proud that Arkansas is home to thousands of these families, and
I am committed to serving their needs. While America is not the
agrarian society it once was, there are still areas of our country,
like much of my State, where agriculture is the economy, where whole
communities celebrate harvests with festivals--rice festivals and
cotton festivals--where farmers take great pride in producing our
country's food supply. That is why these false impressions bother me so
much. It is not the plutocrat who is getting hurt by these false
impressions. He doesn't exist anymore; he is a myth. But even though he
is a myth, everyone has been led to believe in him, so much so that now
we are literally debating how big a farm is allowed to be in order to
receive our dint of approval.
But how can we in Congress decide what size a farm should be? The
problem with setting some arbitrary level for farm size, which this
amendment would do, is that ``big'' means different things to different
farmers in different parts of our country.
One farming couple, Gary and Pam Bradlow of England, AR, are listed
by one Web site as the top recipient of farm payments in their area.
Surely, then, the Bradlows must operate a huge farm. Surely they are
wealthy plutocrats, jet-setting about the Caribbean on their yacht. In
fact, the Bradlows are struggling to keep their heads above water. They
farm 2,000 acres--probably a large farm in the minds of many people,
but in truth, on this farm they barely achieve the economy of scale
they need to survive. This is because they happen to grow rice, which
is the most expensive, capital-intensive program crop a farmer can
grow.
The other most expensive, capital-intensive crop, of course, is
cotton, which happens to be the other main crop of my State of
Arkansas. In fact, rice and cotton are significantly more costly to
grow than any program crops.
As this chart shows, the average input cost of production per acre
for rise is $697.
For cotton it is $538 per acre.
What are these input costs? Things such as seed and fertilizer, or a
200 horsepower tractor that costs almost $100,000, or a $125,000
combine; many of these are things that every farmer has to buy. But
some of these input costs are specific to rice and cotton cultivation:
Things such as a 9976 six-row cotton picker, which costs $285,000 at a
dealership in Blytheville, AR; or the tremendous costs required to
manage all the water needed to successfully raise a rice crop, a cost
which could run into the hundreds of thousands of dollars for even a
relatively small farm.
These unique costs are significant and they push the cost of
production for rice and cotton to levels far above that for other
program crops.
Let's look at another crop, say, sorghum. The average input cost of
production per acre for sorghum is only $161 per acre.
Even for corn, the average input cost per acre is only $356, almost
half the average input cost to produce rice.
Let me point out that it is not my purpose in showing these
disparities to argue that farmers of these other crops do not also
deserve support--far to the contrary. Farmers of these other crops need
farm support because they also have to deal with rising costs, sinking
prices, and unfair trade for overseas. My purpose in pointing out these
disparities in the average input costs of production is to illustrate
why payment limitations generally affect the farmers of rice and cotton
in my state, and across the South, before they affect farmers of other
crops. But make no mistake about it, this amendment would devastate
farmers of every program crop, and then some. That is why the major
commodity associations representing every program crop strongly oppose
this amendment.
I have a copy of a letter here signed by these organizations: The
American Cotton Shippers Association, the American Society of Farm
Managers and Rural Appraisers, the Alabama Farmers Federation, the
American

[[Page S446]]

Farm Bureau, the American Soybean Association, the Agricultural Retail
Association, the Wheat Growers, Barley Growers, Corn Growers, the
Cotton Council, Grain, Sorghum, Sunflower, Rice Millers, Peanut
Farmers, Canola, and U.S. Rice Producers Group.

I ask unanimous consent that this letter be printed in the Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:

February 6, 2002.
Hon. Tim Hutchinson,
U.S. Senate, Dirksen Senate Office Building, Washington, DC.
Dear Senator Hutchinson: The organizations listed below
represent a significant majority of the production of food
and fiber in the United States. We are writing to urge you
and your colleagues to oppose amendments to new farm
legislation, which would further reduce limitations on farm
program benefits below levels included in the Committee's
bill (S. 1731). In testimony presented to Congress concerning
new farm legislation virtually every commodity and farm
organization opposed payment limitations.
One of the primary objectives of new farm legislation is to
improve the financial safety net available to farmers and to
eliminate the need for annual emergency assistance packages.
If limitations on benefits are made more restrictive than
those in S. 1731, a significant number of farmers will not
benefit from the improved safety net. Simply stated, payment
limits bite hardest when commodity prices are lowest. The
addition of new crops (i.e. peanuts and soybeans) to the list
of those eligible for fixed and counter-cyclical payments
will mean even more producers are adversely affected by new
limitations.
Proponents of tighter, more restrictive limitations will
argue that farm programs cause farmers to enlarge their
operations and that a few are receiving most of the benefits.
Farmers expand in order to achieve economy of scale and to be
competitive in domestic and international markets. Randomly
established limitations and increased regulatory burdens do
not promote efficiency or competitiveness, but they do
increase costs and increase the workload for USDA employees.
One of the most popular results of the last farm bill was
that producers could spend less time at their county FSA
office and more time managing their farming operations.
Farmers felt the government had stopped micro-managing their
business plans. With passage of the Grassley or Dorgan
amendments, farmers can look forward to many more trips to
their county FSA office. In all likelihood they will be
required to provide their private tax records to USDA to
prove they do not meet an arbitrary means-test income limit
that disqualifies them from participating in all federal farm
programs.
Please consider the following:
If row-crop producers are forced to reduce plantings due to
tighter payment limitations, acreage will likely switch to
specialty crops. Increased production could drastically
impact specialty crop markets.
A means test, at any level, disadvantages high value crop
producers and livestock operators.
Congress enacted legislation requiring program participants
to meet actively-engaged-in-farming rules and established the
3-entity rule to further limit benefits.
Marketing loans are designed to encourage producers to
aggressively market crops; limitations on the operation of
the marketing loan would contradict its primary objective;
there was no limit on the marketing loan program in 1985;
since then Congress has reduced the limit to $200,000 (for
all crops) and then to $75,000 before temporarily increasing
the limit to $150,000 in recent years to ensure that the
program could achieve its objectives in times of
extraordinarily low prices.
A stringent payment limit amendment will overwhelm FSA
employees who will be asked to implement new farm law in
record time and administer these draconian new limitations.
The actively engaged provisions contained in the Grassley
and Dorgan amendments would prevent many widowed farm wives
from participating in government price support programs.
Recent statistics released by environmental groups
overstate payments by aggregating 5 years of data and failing
to account for the sharing of those payments to individuals
in families; cooperatives, partnerships and corporations
listed as recipients.
The existing limitations in S. 1731 on direct payments, new
counter-cyclical payments and marketing loan gains are not
insignificant. Further, the regulations requiring recipients
to meet actively engaged criteria remain in place and are
enforced by the Department of Agriculture.
We strongly urge the Senate to defeat the Grassley and
Dorgan amendments as well as any other proposals to limit
eligibility for economic assistance during times of low
prices when farmers need it most.
Thank you for your consideration of our views.

Mrs. LINCOLN. Madam President, this letter points out one of the
worst things about payment limits, that they bite hardest when
commodity prices are lowest.
How would farmers be hurt? One way they would be hurt is because this
amendment would discontinue availability of generic commodity
certificates which offer farmers better access to the marketing loan
program.
Marketing loan support is most important when prices are low. Let's
say there is a year in which the global market is swamped, in large
part because of foreign farmers who are much more heavily subsidized.
American farmers have fewer global markets, so now the domestic market
becomes oversupplied. The price plummets, just as it has for every
program crop over the past several years. Because the price is lower,
the value of loan deficiency payments would be higher, and farmers
would hit their new payment limitation sooner. This means that a larger
portion of their crop is now unavailable for marketing loan support.
Because prices are so low, they cannot possibly recoup their cost of
production through the market. If they are lucky, they only fall into
deeper debt. If they are unlucky, then they are forced to default on
their loans and the bank seizes whatever assets they have: their
equipment, their land, their house.
Generic certificates would offer these farmers more access to the
marketing loan program, but this amendment would eliminate that
benefit.
In what other ways would they be hurt? Well, this amendment would
take away the 3-entity rule. Why is that important?
To understand this, let's look back to why the 3-entity rule was
created in the first place.
The 1985 farm bill created the marketing loan program with no payment
limitations. Later, Congress decided in its infinite wisdom that, even
though farmers were going out of business and people were leaving farms
and rural towns in dramatic numbers, it had made it too easy for
farmers to make a handsome living. So it decided to begin placing
dollar limits on payments, even though it unfairly disadvantaged
farmers who, with higher value crops, reached these limits much faster
than farmers of other crops. But it was apparent that to do that would
quickly put even more people out of business, so Congress tried to
cushion the blow by allowing farmers to apply for payments through up
to three entities. This allowed people who farmed with their wives and
children to get enough support to keep the family farm viable.
So, from the beginning, the 3-entity rule was put in place to avoid
the massive bankruptcies that would otherwise occur if payment
limitations were imposed without it. But even though farmers continued
to go out of business, and rural communities continued to decline,
Congress decided to lower payment limits again. Then, Congress passed
Freedom to Farm and all heck broke loose. Prices plummeted, farmers
began dropping like flies, and Congress was forced to begin passing
emergency relief bills--4 years in a row--to keep rural America from
falling stone dead.
Now, in the wake of all this, comes this amendment that wants to lay
that one last straw on the camel's back by taking away the 3-entity
rule--the one thing that has kept thousands of farmers hanging on. And
it comes at a time when farmers are suffering about as bad as they ever
have. It comes at a time when virtually every farmer and every farm
organization is coming to Congress in droves begging, pleading with us
to increase farm support. And, remember, it isn't just farmers of the
high-value crops like cotton and rice who are in need.
It's also the corn farmers, soybean farmers, wheat farmers, and
farmers of just about every other crop. They are all suffering. And
this is very important to remember, because this amendment will hurt
these farmers, too--even the farmers of specialty crops; they don't
participate in these programs.
Specialty crop farmers will be significantly hurt because tightened
payment limitations force farmers to reduce plantings of the program
crops. In many parts of the country where they grow specialty crops,
places such as California and the Far West, Florida, and many of the
Atlantic States, and many of the Mountain states, much of the land that
is currently planted in program crops will soon be switched to
specialty crops. When that happens you will see the prices of these
specialty crops dive even lower than they are now, and then these
farmers will be forced out of business.

[[Page S447]]

So it isn't just farmers of rice and cotton. Nevertheless, it is this
disparity in cost of production between the high-value crops such as
rice and cotton and the lower value crops that provides the clue to
understanding why this amendment is so dangerous, and would be so
devastating, to the farmers in my State and to farmers across the
country. Yet, this point is only one of the many mysteries and myths
that cloud this issue.
I would like to try to paint a clearer picture, to bring some clarity
to this confusion, and perhaps it would be easiest to do this by
pointing out what freedom to farm sought to accomplish.
The main premise behind freedom to farm was that farmers had become
addicted to subsidies, and that they needed to be liberated into the
glorious free market that we would soon create within the ambit of the
World Trade Organization. Farmers were told they needed to make their
operations more market-oriented, that they needed to learn to respond
to free market signals.
We set in motion a plan to wean farmers from government support.
We gave them planting flexibility. We told them we would negotiate
away the trade barriers overseas competitors erected to block them. We
told them the world would follow our example if only we would lead by
example and unilaterally disarm.
Well, we disarmed. We began to lower our farm support, but the world
did not follow. The result has been 6 years of disaster. Prices have
plummeted in virtually every commodity, even while input costs continue
to rise. Farmers are going out of business and rural towns are heading
for the abyss.
So we, in Congress, have tried to respond with a new farm bill.
Chairman Harkin has introduced a very good bill that seeks to answer
the needs of our farmers. I compliment him on his hard work, his
diligence, and his patience in bringing us a bill from the Senate
Agriculture Committee that does just that in its diversity and its
attention to assisting farmers. It is a bill that renews the
Government's commitment to farmers in the rural economy, one that
offers a bedrock, strong safety net.
But let us not lie to ourselves. This is not a complete fix, by any
stretch. Prices are still in the tank. It will take some time for those
prices to rebound, even if the rural economy responds immediately and
positively to our new farm policy. Until then, our farmers will
continue to struggle under the burden of low prices.
How low have the prices sunk? As this next chart shows, the price of
cotton last year sank to its lowest level in more than two decades.
For rice--shown on our next chart--the story is even worse. Last year
rice prices sank to a level lower than they were in 1947. Yet cotton
and rice farmers still have to wrestle with an ever-rising cost of
production.
As this next chart shows--and it is actually my favorite chart--input
costs have risen steadily while prices have remained flat or even
dropped. This point is never mentioned in those horror stories that we
see in newspapers and on the Web sites. Talking about the unbelievable
amounts of money these farmers are getting, we never hear one single
mention of what these producers are spending.
Farmers need more support and higher prices because their costs are
forever rising. Let's think about what this means. What products do we
buy in our everyday lives for which the prices are just as low today as
they were in 1947?
Imagine trying to support your family in the 21st century--with the
cost of housing as it is today, with energy prices shooting through the
roof, as they did last year, with cars, clothes, everything you can
think of that you have to buy costing as much as they do today--imagine
doing all of that on the amount of money your father or grandfather
earned in 1947. You could not do it.
That is what rice farmers face. And that is what cotton farmers face.
And that is what soybean farmers and corn farmers and wheat farmers and
all of the others face, too.
That is why every organization, representing every program crop, and
several others on top of all of that, strongly oppose this amendment.
They know they will have to continue to face the squeeze between
plummeting farm prices and the ever-rising farm costs of production.
Yet even as they are squeezed, we tell our farmers they must still go
out and wrestle with the heavily distorted global marketplace--a
marketplace distorted beyond recognition by foreign subsidies so high
they would be unrecognizable to us.
We tell our farmers they must still find ways to be market oriented,
to be more responsive to the market signals--in a word: to be more
competitive.
What does any business have to do to become more competitive? It must
find ways to lower its per unit cost of production. To do this, most
businesses find it necessary to increase their economies of scale. That
is how the marketplace works. That is what our farmers in Arkansas have
had to do.
Mr. Greg Day, a constituent of mine who farms in Grady, AR, used to
farm cotton on only 1,700 acres. But because of the declining health of
the farm economy, because of the changing world in which he lives, he
has had to double his acreage to 3,400 acres in order to spread out his
costs, just to maintain the level of revenue he needs to keep his head
above water.
And now along comes an amendment that tells him that we want to
discourage the very course of action he has had to follow to survive.
It says to farmers: Do not do what you have to do to become more
competitive.
It is as if Congress is, on the one hand, telling farmers to
participate in the real business world where the most competitive
survive, but, on the other hand, telling them not to do what will make
them more competitive.
Congress has sent contradicting signals to farmers because it is
still clouded by these false pictures, these myths of what is the
average farmer.
We still impose upon farmers this mythic, old-fashioned notion that,
while the rest of us live in the 21st century, farmers ought to make a
living as our grandfathers did 75 or 100 years ago. But our
grandfathers were never asked to meet the regulations of today's EPA or
the Corps of Engineers and wetland regulations. Our grandfathers were
never asked to meet the regulations for chemical application,
fertilizer application--all of the other really positive ideas that
have come out of agriculture in ways that we can be more efficient and
more sensitive to the environment. Our grandfathers never operated
under those restrictions.
And that myth imagines that we ought to stamp out anybody and
anything that looks too big, anything that looks too global, anything
that looks too corporate. But, colleagues, there are no big, faceless
corporations arriving in our small towns from the big cities and
pushing our families off the farms, eating up all the land, and ruining
the rural landscape. That is just another myth as well.
Many of those mentioned by my colleague--large banks, millionaires--
some of them are landowners through a default on loans. Some of them
are large landowners because they are age-old families. Some of them
have acquired land because they purchased it.
The farm families who are farming these lands are the same families
who were farming it back when our grandfathers were farming. They are
just families like yours and mine. There are fewer of them,
unfortunately, but not because big corporations from big office towers,
with wealthy shareholders, took their place. There are fewer farmers
because, for too long, we have let inadequate policy and crushing low
prices push them out. And you do not remedy this situation by outlawing
the farmers who grow higher value crops and who need bigger farms. If
you do that, then all we will have accomplished in this body is to
create a policy that puts both the smaller farmer and the bigger farmer
out of business.
Smaller farmers are not going out of business because bigger farmers
are hogging a disproportionate share of Government support. Smaller
farmers are going out of business because the world is changing,
because we have a global marketplace, because there is global
competition from more heavily subsidized farmers overseas.
You are not going to fix that by simply saying: We don't want bigger
farms. You are not going to fix the North Dakota wheat farmer's
problems by putting the Arkansas rice farmer out of business. The Iowa
grain farmer isn't going to do better because the Louisiana cotton
farmer went out of business.

[[Page S448]]

But this amendment will make it so much harder on the Arkansas rice
farmer and the Louisiana cotton farmer to make ends meet, just as it
will eventually hurt soybean farmers in Missouri and Maryland, and corn
farmers in Indiana and Kansas, and wheat farmers in Wyoming, and so on.
All of these farmers are in this boat together. That is why all of
these commodity organizations are banding together to oppose this
amendment.
Simply put, approving this amendment will accomplish nothing more
than targeting these cotton and rice farmers and making it harder for
them to get the farm support they need to simply survive. Who would
farm in my State then? It will not be any of the farmers whose stories
I have told you today. And it will not be their children.
I come from a seventh generation farm family. I am a sister,
daughter, and granddaughter of a rice farmer.
My grandfather passed on to his grandchildren land that had been in
our family for generations. Of the nine grandchildren he had, only two
of us still want to try and make a go at farming. Once they drop out,
the Lambert family will be out of farming perhaps totally. These
newspaper articles that have spread misinformation about me and many
others never tell that side of the story. These interest groups, Web
sites that claim to speak on behalf of the family farmer, all of these
editorial writers who publish arguments as if they know anything about
farming, they never tell you about the farmer who cannot afford to get
out because all of his debt and his only assets are both tied up in
land, but who cannot afford to keep farming either because every year a
little bit more of his grandfather's legacy slips away into red ink.
They never tell you about the town that will dry up because Congress,
in its infinite wisdom, decided to play God and arbitrarily decide that
all the farmers in that town should go out of business because somebody
up in Washington did not like how they got bigger, even though they got
bigger because that same Congress also told them to act like an
ordinary business and get more efficient.
Who is going to keep revenue coming into that rural town that is
drying up? Who is going to provide jobs and keep the property tax bases
low so there is money to fund the schools? I don't think we can afford
to take the risk necessary to find out.
I urge my colleagues to oppose this amendment and reserve the
remainder of our time.
The PRESIDING OFFICER. Who yields time? The Senator from North
Dakota.
Mr. DORGAN. Madam President, when I read the list of the cosponsors,
I was mistaken to read Senator Cochran's name. He is not a cosponsor of
this amendment. The amendment was originally drafted to be submitted as
a second-degree amendment to the Cochran amendment to the commodity
title in December. I read from a list that included his name on the
bottom. He certainly is not a cosponsor. It was my mistake. My
apologies to Senator Cochran.
I ask unanimous consent that Senator Cochran's name be stricken from
the Record in that section where I identified cosponsors. He is not and
has not been a cosponsor.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DORGAN. I yield as much time as he may consume to the Senator
from Iowa.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. Madam President, how much time do we have?
The PRESIDING OFFICER. Forty minutes.
Mr. GRASSLEY. I take the opportunity at this point to yield to the
Senator from Nebraska 5 minutes or as much as he might use of that
amount.
The PRESIDING OFFICER. Without objection, the Senator from Nebraska
is recognized.
Mr. HAGEL. Madam President, I thank my distinguished colleague, the
senior Senator from Iowa.
I rise this morning as a cosponsor of the Dorgan-Grassley amendment.
We have heard and will hear this morning about large farms, small
farms, medium-sized farms, baby farms, grandpa farms, a lot of farms.
The fact is, large farms gain additional subsidies for every new acre
they buy and every new bushel of grain they produce. In fact, the
taxpayer, the Federal Government, subsidizes this transaction.
Recently, the North Platte, Nebraska Telegraph wrote an excellent
editorial pointing out the problems with the current farm payment
system. I ask unanimous consent to print the full text of this
editorial in the Record following my remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See Exhibit 1.)
Mr. HAGEL. The North Platte Nebraska editorial stated in part:

Fortified with subsidy money, the largest farms continue to
plant millions of acres of crops, bidding up the price of
land to do so. That creates more surpluses, low grain prices,
continued low grain prices and a false land market.
Present farm policy discourages small- and medium-sized
farm operations, and it discourages young people from
entering the business.

Those of us in farm country recall the difficulties of the 1980s and
what the agricultural community in this country went through. Partly
that was a result of a false floor as a result of inflation in bidding
up land prices. When it crashed, everything crashed. I suspect we are
heading for such a time, unless we correct and address exactly what the
North Platte Telegraph talked about in their editorial.
Consider that since passage of the 1996 farm bill, we have spent a
total of $62.3 billion in direct payments to producers, and that in
fiscal year 2000, 63 percent of that $62.3 billion in direct payments
to producers went to the largest 10 percent of farmers. I don't know,
because I wasn't around 70 years ago when we established a farm policy
in this country, but I think I do understand that there was a general
intent not for this kind of misplacement of taxpayers' dollars to
continue. The point is, this was never the intent of farm policy 70
years ago.
A recent poll conducted by land grant universities showed that 81
percent of farmers want stricter payment limits. In my State of
Nebraska, 85 percent agreed with tougher limits. This year, the
Nebraska Farm Bureau for the first time voted to support payment
limits.
The amendment we are proposing would still allow for very generous
farm payments, but it would remove the loopholes that allow a handful
of large farmers to receive unlimited payments. This amendment will
make certain that Federal commodity payments are structured to help
those who need it, those whom these programs were in fact intended to
help--the real farmers. It will also help ensure that those who receive
Federal agricultural payments are actually involved in agricultural
production. That would be novel.
That, again, was the original purpose, the intent of farm support
programs. This is the kind of reform I believe strengthens a new farm
bill.
My colleague from North Dakota, Senator Dorgan, made an interesting
point in referencing the Washington Post editorial.
The PRESIDING OFFICER. The Senator has used his 5 minutes.
Mr. HAGEL. I ask unanimous consent for an additional 3 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. HAGEL. The question might be asked: What does the Washington Post
know about farm policy? That is a legitimate question. Probably very
little. The point made in that editorial is a very real point in that
the continued support of the Congress, representatives of the people of
this country, to pay for another $63 billion in additional farm subsidy
programs isn't going to continue to be there. Until we bring some
reality and common sense to our system, to our program, then
politically it becomes more and more difficult each year to sustain
that subsidy program.
It is worth noting also that this payment limitation reform would
save $1.3 billion, according to CBO. And some of those savings would be
reinvested in agriculture--increasing funding for the Beginning Farmers
and Ranchers Loan Program--that is very important for new farmers and
ranchers--expanding the Crop Insurance Program, which is, in fact, the
way to eventually go in securing and sustaining the ability of farmers
to produce and survive and prosper. It would boost nutrition programs.

[[Page S449]]

Farm support programs are vital, of course, to our farm families and
our agricultural communities. We are not arguing that point. But
without real payment limitation reform, we will continue to weaken the
same farmers we claim we want to help.
I appreciate the work done by my colleagues from North Dakota and
Iowa and others on this issue and support their efforts to bring some
accountability and common sense to agricultural policy.
I urge my colleagues to support the Dorgan-Grassley amendment. I am
proud to stand with their efforts today.
I yield the floor.

Exhibit 1

[From the North Platte Telegraph, Dec. 16, 2001]

To Too Few, Too Much--Government Needs To Limit Farm Subsidies

As the U.S. Senate debated the farm bill this week, there
was at least one thing on which senators seemed to agree:
federal farm payments to the largest farmers are too large.
Even farm-state senators decry the problem.
Nebraska Sens. Ben Nelson and Chuck Hagel, along with
colleagues from Iowa and the Dakotas, have worked on
amendments to curb the excess.
The problem, simply stated, is that more than two-thirds of
federal farm payments go to fewer than 10 percent of farms.
Fortified with subsidy money, the largest farms nationwide
continue to plant millions of acres of crops, bidding up the
price of land to do so. That creates more surpluses, low
grain prices and a false land market.
On hearing the news, the first thought is to urge that
subsidies be eliminated. That would take care of the abuse
and save tax-payers money.
But farm subsidies are necessary. With abundant farmland
and hardworking and talented farmers, the United States
constantly produces more food than its people can consume.
The excess goes to buyers in other nations. But when
foreign markets for farm products fall to materialize, such
as in 1999 when Asian economies collapsed, U.S. farmers need
federal assistance. That help is vital here in Nebraska,
where the economy is dependent on agriculture.
The challenge of federal subsidies is in their design. The
law is complex. Flaws are magnified.
Here's a flaw everyone agrees on: virtually unlimited farm
payments make for too few farmers.
Once, farming was a lifestyle choice. Now, it has become a
big business. Unlimited federal farm payments make the
problem worse.
Present farm policy discourages small and medium-sized farm
operations, and it discourages young people from entering the
business.
For years, farmers and city folks alike have grumbled about
the farm program. That grumbling has been amplified by an
environmental group willing to get the facts.
At www.ewg.org, the Environmental Working Group lists
virtually every farmer in the nation that received federal
dollars during the past five years. It lists every dollar the
farmer received--and from what federal program.
The list is a stunning achievement, assembled from public
records by diligent people. And the content is stunning.
Click on the information for Nebraska and you can see the
money received by more than 35,000 farmers.
From 1996 to 2000, the largest farmer received $2.65
million. The 10th largest got about half that amount, $1.32
million. Many received sizable sums. The 100th largest got
$625,000.
Hagel, along with senators from North Dakota, South Dakota
and Iowa, has proposed an absolute maximum cap of $275,000 in
any one year. If farms are big enough to net $2.5 million in
profits during three years, they would get nothing.
Those limits aren't enough.
Only a fraction of the nation's farmers could net $2.5
million in three years. Limiting the maximum payment in any
one year to about $275,000 would cut funds for only the
largest 100 or so farms last year.
Farmers, speaking through a poll taken a few months ago,
said a limit of about $60,000 would be fine.
While that limit would drastically cut into large-scale
agribusinesses that have grown up around the farm program
during times of record-low grain prices, it is a worthy
target.

big winners in farm subsidy policies

(These figures, taken from the Environmental Working Group
Web site, show the top-50 recipients of federal farm
subsidies in Nebraska for the last four years.)
Here are the top Nebraska recipients of federal farm aid
between the years 1996 and 2000.
Rank, name, location, and total.
1. C J Farms Gen Ptnr, Oxford, $2.6 million.
2. Kaliff Farms, York, $2.5 million.
3. Bartlett Partnership, Bartlett, $1.8 million.
4. Danielski Hvsting, Valentine, $1.7 million.
5. Niobrara Farms, Atkinson, $1.7 million.
6. H r-w Farming, Friend, $1.6 million.
7. Merrill Land Co., Gen Ptnr, Ogallala, $1.4 million.
8. Glenn Elting & Sons, Edgar, $1.3 million.
9. Osantowski Bros., Bellwood, $1.3 million.
10. Reynolds Farms, Broken Bow, $1.3 million.
11. Western Neb Farm Comp, Venango, $1.3 million.
12. Woitaszewski Brothers, Wood River, $1.2 million.
13. J D Hirschfeld & Sons, Benedict, $1.2 million.
14. Kason Farms, North Platte, $1.2 million.
15. Marsh Farms, Hartington, $1.1 million.
16. Safranek, Irrigation, Merna, $1.1 million.
17. Schulz-Finch, Paxton, $1.1 million.
18. Shanle Bros, Albion, $1 million.
19. Kck Farms, Scribner, $1 million.
20. Heine Farms, Fordyce, $1 million.
21. Craig & Terry Ebberson, Coleridge, $1 million.
22. Owl Canyon Farms, Madrid, $1 million.
23. Wohlgemuth Farms, Holdrege, $994,420.
24. Wallinger Farm, Stuart, $989,312.
25. J D M Farms, Shickley, $984,687.
26. Ebberson Farms, Coleridge, $975,465.
27. Pospisll Farms, Friend, $974,449.
28. Kracl Family Ptnr, Oneill, $967,331.
29. Orville Hoffschneider & Sons, Waco, $954,950.
30. Bender Bros, Lindsay, $941,679.
31. Rowen J Kempf & Sons, Shickley $941,600.
32. Board Of Regents U of N Lincoln, $920,646.
33. Kirkholm Farms, South Sioux City, $914,320.
34. Cruise Farms Ptnr, Pleasanton, $911,159.
35. Wallin Brothers Gen Ptnr., Imperial, $898,041.
36. Adams Farm Partnership, Broken Bow, $859,111.
37. Bettger Bros, Fairmont, $879,963.
38. Stanek Brothers, Walthill, $870,553.
39. Taake Bros, Tilden, $869,093.
40. B T R Partnership, Nebraska City, $868,185.
41. Alfs Farms Prtnr, Shickley, $865,645.
42. Moore Farms, Cambridge, $852,346.
43. Terryberry Farms G.p., Imperial, $847,856.
44. Andersen Farms, Inc, Dakota City, $847,280.
45. D & B Farms Partnership, Holdrege, $830,156.
46. Hobbs Farms, Ewing, $815,213.
47. Robin & Barb Irvine, Ravenna, $805,978.
48. Sears Brothers, Ainsworth, $805,202.
49. H E Strand & Sons, Imperial, $804,585.

The PRESIDING OFFICER. Who yields time? The Senator from Arkansas.
Mrs. LINCOLN. I yield 10 minutes to the Senator from Arkansas, Mr.
Hutchinson.
The PRESIDING OFFICER. The Senator from Arkansas is recognized.
Mr. HUTCHINSON. I thank the Chair. Madam President, I thank the
Senator from Arkansas for her excellent statement in opposition to this
amendment. I rise in strong opposition.
This past weekend I was in Lawrence County, AR, at a farm auction in
Portia where three farmers were selling out. They were selling their
equipment. They put it up for auction. As I stood there and heard their
stories, these were not--and I emphasize to my colleagues these were
not--small farmers, depending on how you define ``small.'' They had a
lot of acreage but did not have a lot of income. In fact, the story was
they could not make the cash flow, and they were calling it quits.
They told me that within a 6-mile radius of where that farm auction
was going on there had been 10 other farmers who had auctioned their
farms off, they had gone out of business in the previous month. So when
we hear what my colleague calls plutocrats, a few getting these vast
amounts of money, it simply does not reflect the reality of rural
Arkansas. It does not reflect the reality of what my constituents are
facing when we see these Web pages and see how much was received in
payments. It does not reflect their net income. It does not tell us
what their input cost was. It does not tell us the reality farmers in
the delta, the poorest part of this country, are facing today.
Farm programs are not and they have never been considered means
testing programs. They were never supposed to be for the benefit of a
certain economic class or based upon the size of the farm or upon the
size of a person's house or what their bank account balance might be or
how much they paid in income taxes or some other measure of financial
condition.
That is not the way our farm program was intended to operate. It was
to ensure that Americans have a safe, reliable, and affordable food
supply and that our farmers, who are some of the most technologically
advanced and environmentally sound producers in the world, are able to
compete.

[[Page S450]]

It has worked. Is it perfect? No. Are there inequities? Yes. Are
there competitions between regions of the country? Yes. But it has
provided this country a cheap, affordable, reliable, safe, and
environmentally protected food supply. And what the proponents of this
amendment are seeking to do is to absolutely pull the rug out from
under the producers who have provided this great condition in this
country.
In Arkansas, agriculture is 25 percent of the State's economy, but
that does not even tell the story because it does not account for the
thousands of jobs that are related to agricultural production, such as
bankers, car dealers, implement dealers, schools, restaurants, and may
I say even churches that are dependent upon the survival of the farm
economy. Farming is the lifeblood of my State, as it is with many rural
States.
The farm program and the subsidies have been made necessary by a
market that is not functioning properly for several reasons: due to
high foreign subsidies, high foreign tariffs, and very strict domestic
environmental regulations.
Senator Conrad has reminded us many times that in the European Union
producers receive an average of about $360 per acre while U.S.
producers receive an average of about $60 per acre, one-sixth what they
get in Europe.

U.S. agricultural products are subjected to an average tariff of
about 60 percent, whereas agricultural products coming into the U.S.
are only subjected to an average tariff of 14 percent. Whether it is
subsidies, whether it is the tariffs, or whether it is the
environmental regulations--the very stringent environmental
regulations, the most stringent in the world with which our producers
must comply--they are at this great disadvantage in competition. That
is why we have to sustain and preserve these programs.
The United States has two choices: We can support our farmers and
retain our position as the world's most productive and environmentally
sound producer of agricultural products or we can cede this important
market to our European competitors or Third World developing nations
and become as reliant on foreign food as we are right now on foreign
oil.
In my mind, as a member of the Armed Services Committee, this is not
just saving rural Arkansas, this is not just preserving a farm economy;
it is a national security issue because if we rip the heart out of our
agricultural programs, our farm programs in this country with the kind
of payment limitation amendment before us today, we will eventually
subject ourselves and make ourselves reliant upon and dependent upon
foreign agricultural products, suppliers, and producers.
It appears many of the environmental groups have chosen to support
this effort in the hope that if you get the commodity title of the farm
bill through this amendment, more money will be available for
conservation programs. We need to think about that a little bit.
If we take our productive lands out of production or force our
producers into bankruptcy, other countries that are more highly
subsidized or Third World developing nations that do not have any type
of environmental regulations in place will simply put more land in
production, and the end result for our world will be a less
environmentally safe place.
It is very shortsighted to adopt this amendment. Basically, taking
our producers off the land will cede an important market to our
competitors, will lead to more land going into production, will not
result in better prices, and, in fact, will lead to greater threats to
our environment.
Conservation programs are very good and very practical, but taking
our most productive lands out of production and putting our best
producers out of business is a misguided and improper policy.
In Arkansas, my farmers, both large and small, my constituents have
been very clear that this amendment will spell disaster for farmers in
Arkansas. What I saw on Saturday in Portia, AK, will be replicated over
and over. The Dorgan-Grassley amendment diverts attention from
constructive debate about how to improve farm policy and restore the
opportunities for farmers to regain profitability.
This amendment will not help farmers, but it will delay or reduce
assistance to them as we will have to at that point oppose a bill that
will be counterproductive to agriculture in this country.
This amendment will only result in a divisive debate over which
farmers should be eligible for benefits, what constitutes ``need,'' and
how large should farms be. They may be issues we need to consider, but
this is not going to improve rural communities or address the issues
facing our Nation's producers.
I found it interesting that the sponsor of this amendment spoke of
the size and the growth of the Department of Agriculture. I say to my
colleagues, this amendment will increase USDA's administrative costs,
require more Government employees, cause our farmers to spend scarce
financial resources on compliance with redtape rather than making them
more competitive. This is going to result in the growth of the
Agriculture Department and more bureaucracy and redtape for cotton
farmers, rice farmers, and peanut farmers.
The adoption of the Grassley amendment will mean the Senate's farm
bill will offer far less assistance than current law, which, in itself,
has proven to be woefully ineffective in times of low prices.
This is not a free vote for Senators who expect the House is going to
fix it. House and Senate conferees will be under extreme pressure to
finish the conference quickly, compromise in such a way that we will
not see the elimination of this amendment in conference, and it will be
disastrous for Southern agriculture.
The means test this amendment includes would require every farmer to
take his or her tax return to an FSA office to prove eligibility.
Adding another level of redtape and bureaucracy will only compound the
problem, limit the support, and make the implementation of a new farm
bill almost impossible. Who is that going to benefit? Certainly not the
farmers.
This amendment will overwhelm FSA employees who will be asked to
implement new farm laws in record time and administer these new
limitations.
There are different regions of the country with different needs, but
this arbitrary limitation is nothing less than war on Southern farmers.
It is aimed at Southern farmers.
I end my remarks by saying we must not turn our backs on rural
America. This amendment will gut our Nation's most productive farmers
and force rural America into a financial crisis that our Nation has not
experienced in decades.
I am glad I was in Lawrence County this weekend. I was glad I was
there to see firsthand the suffering, to see farmers who are calling it
quits, to see the ads in the newspapers saying four more farmers
quitting today; to see hundreds of farmers lined up to see if they
could buy a bargain, because they cannot afford new implements, to see
if they could buy from those who are going out of business.
I do not know what they may face in Iowa, Nebraska, North Dakota, or
South Dakota, but I know what they are facing in Arkansas. I know what
they are facing in the South, and it is not as it has been portrayed by
the Washington Post.
I ask my colleagues to take a second look before they support a
misguided, though well-meaning, amendment. I ask my colleagues to vote
against the Dorgan-Grassley payment limitation amendment.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. I yield 6 minutes to the Senator from South Dakota.
Senator Lugar would be the next person I would go to, and then Senator
Nickles wanted some time. I want to make sure he knows I reserved him
some time, too. We are going back and forth, I know, but that is the
order I want my side to know that I am yielding time.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from South Dakota.
Mr. JOHNSON. Madam President, I thank my friend from Iowa for
yielding me this time. I rise to offer support for this bipartisan
amendment Senator Dorgan and Senator Grassley have sponsored.
This is truly an astonishing debate. People all around America must
be

[[Page S451]]

shaking their heads as they listen to this debate about whether a
business that is being subsidized to the tune of $275,000 by the
taxpayers should regard that as inadequate, and that we should be told
we are pulling the rug out from under a business because they are only
getting a $275,000 taxpayer-paid subsidy, that they need a $550,000
subsidy in order to cashflow.
Has it really come to this? Is this what American agricultural policy
is all about, half-million-dollar subsidies and anything less is
regarded as somehow inadequate? This is amazing. I think it is time for
us to recognize the current structure of the farm program payments has
in fact failed rural communities and family-sized farmers and ranchers.
The advocates of the amendment, including myself, would suggest that
anyone who wishes to farm the entire county is free to do so. This is a
free country. Farm however much they wish, but there should be some
reasonable limitation as to how much the taxpayers ought to be expected
to assist with their cashflow, and $275,000 strikes me as a generous
level of support. That is what this amendment is all about.
We are talking about modifications to the 1996 farm bill, which I
believe especially hurts beginning farmers because it increases the
cost of getting started in farming. As long as huge farms can count on
larger and larger Government checks every time they add another farm,
they will bid those Government payments into higher cash rents and
higher land purchase prices. By reducing the number of middle-sized and
beginning farmers, the current payment structure has deprived rural
communities and institutions of the population base they need in order
to thrive.
I believe the single most effective thing Congress can do to
strengthen the fabric of rural communities and family farms across the
Nation is to stop subsidizing megafarms that drive their neighbors out
of business by bidding land away from everybody else.
This amendment aims to place some commonsense payment limitations on
the various price supports contained in the farm bill proposal.
The question of implementation was raised. There are farm program
payment limits now that need to be implemented. We do not change that.
We simply put the limitation levels at a far more reasonable level.
The distribution of benefits from farm programs has been a hot topic
in recent months, as we find that almost half the farm program payments
are going to families who make over $135,000 per year. We need to
modify that. We need to recognize what we are doing is not working.
I, too, am concerned that the millions and millions of dollars going
to individual megafarm operators and absentee landowners will
eventually ruin public support for the farm program.
Today, with our amendment, we have an opportunity to close certain
loopholes that exist in the farm bill that allow enormously large
operators to receive millions of dollars in taxpayer subsidies.
It is our duty, I believe, to tighten the rules on who qualifies for
farm programs and to make sure those people who do receive benefits
are, in fact, actively farming.

First, it would limit an individual's or entity's total amount of
direct payments and countercyclical payments to $75,000 in any fiscal
year.
The current farm bill permits individuals to receive $80,000. The
House farm bill allows individuals to reap $125,000; and the Senate
bill, as it is before us, allows a $100,000 payment.
Second, our amendment limits an individual's or entity's total amount
of payments under a marketing assistance loan, or LDPs, to $150,000 per
crop per year.
Third, our amendment puts some real teeth into the application of the
triple entity rule, which virtually doubles the statutory payment
limitation for certain entities.
Our amendment tracks the new limitations on farm program payments
through sole proprietorships or individuals, entities, partnerships, or
other arrangements directly to the individuals.
With the implementation of a direct attribution of benefits, we
eliminate the application of the triple entity rule to participate in
multiple entities for the purpose of gaining more and still more
subsidies from the farm program.
To address situations where a husband and wife are indeed both active
on the farm, we allow for a $50,000 add-on over the combined total of
limits for individuals, resulting in this $275,000 limit. Simply put,
our amendment cuts by 50 percent the huge subsidies permitted under the
House farm bill proposal, and under the 1996 farm bill the total
payment limit is $460,000. Under the Senate proposal, it is $500,000;
and under the House bill, it is $550,000. We come up with $275,000.
Savings from the payment limits go to an array of needed areas: to
help beginning farmers, to help with rural development, to help with
nutrition and commodities programs, and to assist with crop insurance--
almost $1.3 billion over the lifetime of this effort.
If we want to have a farm program that has credibility with the
Nation at large, and if we want to direct farm benefit programs to the
people who most need them, we need to pass this amendment. I believe
that is one of the key reforms that is required for a farm program to
have the kind of public support it deserves to have in this Nation.
I yield the floor.
The PRESIDING OFFICER. Who yields time?
Mrs. LINCOLN. Madam President, I yield 5 minutes to the distinguished
Senator from Alabama.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Alabama.
Mr. SESSIONS. Madam President, I appreciate the opportunity to talk
on this issue. Our phones have been ringing off the hook from farmers
in Alabama. I think in the last day or so, we have had 60 calls. People
are very concerned about this amendment, and it has become clear it has
a real potential to damage agriculture, particularly in the southern
region.
The fact is that cotton, one of Alabama's top cash crops--the top
cash crop--is expensive to grow, $350 an acre. The cost of a new cotton
picker is $300,000-plus. That is a significant investment. As the years
have gone by, cotton farmers have realized they cannot make a living on
200 acres, and they cannot pay the cost of their equipment and all the
investment in producing cotton on smaller acreage farms.
What has happened is they have leased farms from elderly people who
do not have the ability any longer to farm, but renting their land
produces some income for them in their retirement age. Widows who do
not choose to farm the land make a little income from renting. Then
there is the whole infrastructure around it.
My personal history has been in the farm community. That is where I
grew up. The first 12 years of my life, my father had a county store.
He had a grist mill in that store and actually ground corn for farmers
in the neighborhood. He sold them horse collars and nails and
everything else, including all their groceries, as they did their
farming in the community.
Later, he bought a farm equipment company, sold International
Harvester equipment--hay balers, bush cutters, cotton pickers, and all
the tractors and line of equipment that go with that, pickup trucks and
so forth.
There are a lot of people involved in agriculture. For us to say we
are going to limit the size of farms in an odd way by not allowing them
to receive the same benefit that a smaller farm does is a mistake if we
think that is going to somehow create more small farms.
What will happen? We are going to lose a lot of the infrastructure
that goes with agriculture in our rural areas. It will impact the farm
equipment dealer. It will impact the grocery store. It will impact the
hardware store, the feed seller, the seed seller, the fertilizer
seller, the pesticide dealer, the herbicide dealer--all of that
infrastructure will be reduced.
I am concerned that through a back-door effort that some have various
reasons to support--some because they think it does not impact their
region and some because they believe it will reduce production in
America and therefore somehow help in other ways--all of these are
back-door efforts that ought not to be accomplished in this method.
If we want to debate, let's debate. I don't believe this is the way
to accomplish it. I think this amendment will

[[Page S452]]

have a tremendous adverse impact, particularly on the farmers who are
calling me. I have talked to them personally. I have been traveling the
State and talking with farmers personally. They are very concerned
about this amendment. It could hurt substantially.
I join with the remarks of Senator Hutchinson and Senator Lincoln and
appreciate their eloquent thoughts. I wanted to share that additional
insight. I also appreciate the insight of Senator Cochran, who will be
speaking on this amendment as well.
We are at a point where we can do some real damage to agriculture in
Alabama and the South. I urge the Senate not to do that. I urge
Senators to vote no on this amendment.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. I yield 7 minutes to the distinguished Republican
leader of this legislation, Senator Lugar.
The PRESIDING OFFICER. The Senator from Indiana.
Mr. LUGAR. Madam President, this is a modest amendment. I stress
``modest.'' In the event that Senators still wish to discuss the issue,
I will have another amendment following this which has a much more
striking possibility for reform.
Nevertheless, this is important. I am surprised at the vehemence and
difficulty in the debate I have heard thus far. I say this after trying
to determine, at least in my State, what the implication will be from
the amendment. I went, as many have, to the Environmental Working Group
Web site and reviewed a printout of the last 5 years, 1996 to 2000, and
who in Indiana might even be slightly affected by this. The Web site
points out there were 98,835 recipients of farm subsidies in Indiana
during that period of time. There are 6, out of 98,000, who would be
affected by this amendment.
Our State is not inconsequential in agriculture. As a matter of fact,
with the number of farmers we have, it does not rank, as it turns out,
in the top six States that receive farm subsidies, but we receive quite
a bit. To find there are only 6 entities that could slightly be
affected by this seems to me to make my point because 98,000-plus
others would not be affected.
This is not unique to the State of Indiana. Simply using my own home
base to make the point again and again that two-thirds of the subsidies
still go to 10 percent of farmers, there is still a high concentration
in my State of where the subsidies go, and that is generally
reflective, plus or minus in some places 55 percent, up to 75 percent
in States across the Union, going to the top 10 percent.

I examined the Web site for the State of Arkansas, having heard the
eloquence of my distinguished colleague from Arkansas. There the
skewing of the payments is slightly greater: 73 percent of the money
goes to just 10 percent of the farms. The database indicates 4,822
recipients average $430,000 each in a 5-year period of time. That took
up 73 percent of the money. Arkansas, as a matter of fact, received
slightly more money than Indiana during the 5-year period of time--
something close to $2.8 billion as opposed to $2.7 billion, with only
half as many farmers.
Leaving aside that anomaly of the farm bill, I then went to the same
database to try to find out how many farmers would be affected. In
Indiana, as I pointed out, only 6 would be above the $275,000 times 5,
which would be the relevant standard for the 5 years that are given
here, 1996 to 2002. The printout in Arkansas indicates there are 583
farms that would have been affected in the 1996-2000 period. That is
quite a few more than six. Therefore, I understand the eloquence of the
distinguished Senators from Arkansas who have received calls from each
of the 583 recipients who have jammed the switchboard.
Let me point out that even if one accepts the fact that this is quite
a quantum leap, there are 48,000 farmers in Arkansas. These farmers
represent slightly more than 1 percent of the farmers of that State.
Again and again we will have to face the fact we have a system which
is so skewed toward the extraordinarily wealthy, toward the huge farms.
I am not one to go into demagoguing because a farm is big, but I think
taxpayers have an interest in whether that bigness is rewarded by
extraordinary millions of dollars of farm subsidies while, at the same
time, all of us plead for the family farmer for retention of that
tradition, this honest person trying to till the soil, when in fact we
are talking about entities that are sophisticated. Thank goodness that
is so. I pray each one of our farms will become more so in world
competition. However, it is another thing to move from hopes that we
become more sophisticated and competitive to the thought that we ought
to subsidize, in a very skewed way, the wealthiest of all farm
entities. I think that is fundamentally wrong. I hope it is stopped.
This amendment is only going to clip it at the top. Six farms in
Indiana, for example. We are not unique. Taking a look at data in South
Dakota, fewer than two dozen farms would find problems. That State
receives about the same amount of money in subsidies as does Indiana,
and a great many fewer farmers likewise. Even then, in the skewing of
South Dakota, the top 10 percent get 55 percent of the payments,
somewhat more leveled off, but well over half at just 10 percent. Again
and again this is replicated.
There are some distinct benefits of this amendment that have not been
illuminated as we have been discussing the wealthy and how they make it
in this case. As a matter of fact, the money that would be saved, even
from this small clipping, would increase the initiatives for future
agriculture and food systems in our agriculture bill from $120 million
of research a year to $225 million beginning in fiscal year 2003 and
continuing through 2006. In terms of overall agriculture--all the
farmers of this country, the competitiveness of our system--clearly
that is a better expenditure than putting money on farmers who already
have extraordinary success and who are accumulating more as we proceed.
I thank the Chair.
Mr. FITZGERALD. Madam President, I rise today in support of the
Dorgan-Grassley amendment regarding payment limitations.
Last year, as many as twenty Fortune 500 companies received farm
subsidies, while hard-working family farmers struggled to survive near
record low commodity prices. The U.S. Department of Agriculture reports
the largest 18 percent of farms receive 74 percent of federal farm
program payments, and the Associated Press recently reported that over
150 people were paid more than one million dollars in farm subsidies in
2000. In 1999, 47 percent of farm payments went to large commercial
farms, which had an average household income of $135,000.
I believe that these payments disparities need to be addressed. In
August of last year, President Bush even recognized this problem.
``There's a lot of medium-sized farmers that need help, and one of the
things that we are going to make sure of as we restructure the farm
program next year is that the money goes to the people it is meant to
help,'' he concluded.
Recently, I joined my colleagues Senators Grassley and Dorgan as an
original co-sponsor of the pending amendment to cap annual federal farm
payments at $225,000 per individual and $275,000 per married couple.
This amendment would help ensure that only active farmers receive
farm payments. Common sense should dictate that you should be required
to be an active participant in ``farming'' to receive ``farm''
payments. This requirement should help ensure that corporations and
multimillionaire tycoons no longer feed at the federal trough. If you
don't till the soil or drive a combine at harvest, you shouldn't be
taking advantage of a program intended for farmers who need the
assistance.
While the current farm bill establishes caps on government payments
to producers, unfortunately, these payment ``limits'' have been
circumvented via a loophole known as general commodity certificates. In
fact, according to the Congressional Research Service, ``while
purported to discourage commodity forfeitures, certificates effectively
serve to circumvent the payment limitation.''
Unlimited farm payments jeopardize the long-term viability of the
U.S. farm economy by diminishing our competitiveness and artificially
inflating land prices and rental rates. Thus, farm payments often go to
landowners and not the farm operators who need them most. In fact,
these higher land

[[Page S453]]

costs add to producers' cost of production and decrease their
competitiveness in world markets. If large commercial farmers know that
they can only receive a fixed amount of federal farm payments, they
will be less likely to bid up farmland rental rates and be less likely
to outbid their neighbors or young beginning farmers at farmland
auctions.
Large farm subsidy payments to super-wealthy individuals and
companies has led to close public scrutiny of our farm programs and
threatens to undermine public support for these programs. I believe
this amendment to the farm bill is a positive step not only toward
ensuring those families who most need federal assistance receive it,
but also to reaffirming public confidence that farm programs are vital
to our nation's agricultural community.
We owe it to our nation's farmers to ensure that farm payments are
going to those most in need. We owe it to taxpayers to protect their
investment in our agricultural economy. The amendment proposed today is
a positive step towards ensuring more fairness in our valuable farm
subsidy program.
Mr. DURBIN. Madam President, I rise today as a supporter and a
cosponsor of the amendment introduced by Senators Dorgan and Grassley.
The Dorgan/Grassley amendment would limit the amount of direct and
counter cyclical payments to $75,000 annually, limit marketing loans
and loan deficiency payments to $150,000 annually; and provide a
husband and wife allowance of $50,000 annually. Also, I might add,
individuals who earn more than $2.5 million in adjusted gross income
(net) would not be eligible for payments.
In short, the proposal would reduce the ceiling on annual crop
payments to individual farmers from $460,000, under current law to
$275,000. Furthermore, the amendment is expected to save approximately
$1.2 billion over 10 years.
The savings of this amendment would go to important things like:
funding for nutrition by raising the standard deduction for food stamp
eligibility; farm profitability with emphasis on small and moderate
sized farms; risk management for producers of specialty crops that
currently have no coverage; and research for programs that provide
competitive grants for biotech, genomics, food safety, new uses,
natural resources.
In short, the Dorgan/Grassley amendment would level the playing field
with regard to the distribution of farm subsidies, and prevent many of
the nation's largest farms from getting a lion-share of the federal
subsidies.
Thank you, I urge all of my colleagues to support the Dorgan/Grassley
amendment.
Mr. KOHL. Madam President, I am pleased to rise this afternoon with
Senator Dorgan and Senator Grassley in support of this important
amendment to the farm bill regarding payment limitations.
Agriculture is the backbone of America's rural economy, and for
Wisconsin it is the backbone of the State's economy. Nearly 18,000
small- and medium-sized dairy farms make up Wisconsin's rural
landscape. Their survival in a volatile market is one of my top
priorities. I am pleased that the Senate version of the farm bill
recognizes the importance of dairy and creates a safety net for
producers during periods of depressed prices. One important component
of this new dairy program is that payments are capped to a producer's
first 8 million pounds of production--that is the average production
from a herd of about 400 cows. While I would have liked to see a lower
cap--Wisconsin's average herd size is closer to 70 cows--this provision
will help to target payments to those who really need the assistance.
The same cannot be said of payments made to producers of traditional
row crops under the 1996 Freedom to Farm bill. It was supposed to limit
producers of row crops to a maximum of $460,000 in government payments
per year. However, loopholes in the law have allowed large producers to
receive much more than that. A comprehensive review of past farm
payments show that 10 percent of the producers--those with the largest
farms--received almost 70 percent of the total assistance. How can we
support millions in government assistance to a very few rich farmers in
a very few States?
The House-passed version of the farm bill exacerbates this situation.
It raises the payment limitation to $550,000 per year without closing
the loopholes--loopholes that allow rural reverse Robin Hoods to
continue sucking government payments away from family farms and onto
million-dollar plantations. The bill that we are debating today in the
Senate provides for a limit of $500,000 per year, again preserving the
loopholes that allow a few producers to receive much more. The Dorgan-
Grassley amendment not only closes the loopholes but also limits total
benefits to $275,000 per year per producer.
Current law and both the House and Senate version of the farm bill
also allow for payments to go to absentee landlords not living on their
farms or involved in their day-to-day operation. The Dorgan-Grassley
amendment fixes that injustice by requiring recipients of federal
payments to provide 1,000 hours per year in work related to the
operation of that farm. Further, individuals with more than $2.5
million in adjusted gross income will not be eligible for assistance. I
cannot believe that anyone would oppose this provision. Who advocates
making farm payments to farmers who don't farm, or even live on a farm?
Who is in favor of providing income security for individuals' with some
of the highest incomes in the Nation?
With an uncertain economic future, a possible return to deficit
spending, a war on terrorism and an immediate need to strengthen our
homeland defense, we have even more of an obligation to spend our farm
dollars wisely. Now is the time to make sure farm payments go only to
farmers who need the money to farm--not to millionaires who need to
make mortgage payments on their city penthouses. The Dorgan-Grassley
amendment restores integrity to our farm programs, reduces pressure on
land rents and prices, dampens overproduction and raises farm income
for our small- and medium-sized family farmers.
I am proud to support this amendment in the name of taxpayers and
struggling family farmers in Wisconsin and across our nation, and I
urge my colleagues to do the same.
Mr. FEINSTEIN. Madam President, I rise in support of the amendment
offered by Senator Dorgan and Senator Grassley that would limit farm
support payments.
The best way to think about this amendment is to understand its three
components. The amendment would:
(1) Establish a payment limitation ensuring that government support
will provide only a true safety net for the needy farmer;
(2) Require individuals receiving farm support payments to be
farmers; and
(3) Exclude millionaires from receiving any farm payment.
First, this amendment will reduce already existing payment
limitations. A limit on the total annual payments a person can receive
was first enacted in the 1970 farm bill and has remained in place
since. Under current law, payments are limited to $460,000 per farm.
The Senate Farm Bill would slightly increase this payment limitation to
$500,000.
Farm groups object to any further reduction in the payment
limitation--as the Dorgan-Grassley amendment proposes--because of the
high input costs that large farms with high value crops have. For
individual farmers, the Dorgan-Grassley amendment would limit payments
to $225,000. For married couples, the limit would be $275,000. I
believe this is a reasonable amount.
Right now, about 10 percent of the farms get 60 percent of the
government payments. Last year, the Federal government paid California
farmers $780 million in subsidies, with primarily large cotton and
rice-producing farms receiving 51 percent of the money. But only 9
percent of California's farmers get crop payments.
Second, the Dorgan-Grassley amendment requires the person receiving
the payment to be a farmer. A tenant must supply at least 50 percent of
the labor or 1,000 hours, whichever is less, for a farm in order to
collect a payment.
This means family members receiving payments have to be actively
farming, not living in New York City and listed as a ``farmer'' for the
sole purpose of doubling the current payment limitation.
These farm payments are real dollars paid for by taxpayers. And there
have

[[Page S454]]

been a flood of newspaper articles recently to shed light on exactly
who is receiving them.
Third, under this amendment, an owner or producer will not be
eligible for a payment or loan if the owner's income for the previous 3
taxable years exceeds $2.5 million. Nothing in current law prevents
millionaires from receiving federal payments. Farm groups object to
this because they object to any ``net income'' test.
This amendment would save $1,295 billion over 10 years, which will
alternatively fund the following:
$810 million for various nutrition programs, including: $250 million
to raise the standard deduction for food stamp eligibility to
households with children. $515 million to increase the shelter expense
deduction. And $34 million to help with participant expenses in
education and training programs.
$330 million for the Initiative for Future Food and Agriculture
Systems, which the University of California benefits from. This
initiative provides competitive grants for biotechnology, genomics,
food safety, natural resources, and farm profitability.
$101 million for research and development for a specialty crop
insurance initiative. $5 million for Beginning Farmer & Rancher
Ownership Loan Account Funds. And $46 million for Non-program farm Loan
Deficiency Payment eligibility and to Restore Beneficial Interest with
regards to LDPs for the 2001 crop.
I will vote for payment limits to restrict millionaires from
receiving federal farm payments when they obviously do not need them. I
believe we should ensure farm payments provide a safety net for the
truly needy.
Mr. KERRY. Madam President, I rise today in support of Senator
Dorgan's amendment to the farm bill, S. 1731. This amendment closes a
loophole that in the past allowed people who were not farmers to
collect subsidy payments. I support farm policy that requires a farmer
to supply at least 50 percent of the labor or 1000 hours of work,
whichever is less, in order to collect a farm subsidy. In addition this
amendment includes a net income test so that farmers who have adjusted
gross income of over $2.5 million three years in a row are not eligible
for federal payments.
Senator Dorgan's amendment ensures that farm aid will target the
people who need it the most, the small family farmers that actually
work the land and are the lifeblood or our rural communities. It is a
pleasure to support this amendment.
The PRESIDING OFFICER. Who yields time? The Senator from Arkansas.
Mrs. LINCOLN. How much time remains on our side?
The PRESIDING OFFICER (Mrs. Clinton). The Senator has 13 minutes.
Mrs. LINCOLN. I yield 5 minutes to the distinguished Senator from
Georgia.
The PRESIDING OFFICER. The Senator from Georgia.
Mr. MILLER. Madam Chairman, I have tremendous respect for my
colleagues from Iowa, North Dakota, and Indiana. But I must rise in
strong opposition to this amendment because it would not only cripple
the agricultural community across this Nation, it would wipe out
agriculture as we know it in the South. Passage of this amendment would
result in many traditional family farms going out of business in many
States.
Do you know what this amendment says to the South? It says: Hold
still, little catfish, all I'm going to do is just gut you. Hold still.
It says to the South: Step right up. Here's a new and improved farm
bill. But because you had to expand and because you had to diversify to
stay in business, you are not going to be eligible.
This is trying to change the rules in the eighth inning. A change in
the rules this late in the game would create tremendous strains on
producers to meet the new compliance standards. The Farm Service Agency
is already going to be overwhelmed by many of the new programs included
in this bill. This amendment would result in increased costs, both to
the Government and to farmers.
Supporters of this amendment say that these payments go to the few
and the big. I could not disagree more. This amendment punishes the
farmer and his family who depend solely on the farm for their
livelihood. In my part of the country, a farmer must have a substantial
operation just to make ends meet. Don't let these big numbers fool you;
these farmers each year take risks equal to or greater than those of
their brethren with smaller operations. In fact, I would argue that
they are in greater need of support because they are forced to be big
in order to be competitive.

Some argue that these payments go to a small number of big farms.
Those who say that need to look at the USDA statistics manual. It shows
that by far the same big farms produce 80 percent of our agricultural
products. We should be supporting those who are fueling this economic
engine, not hobby farmers who paint a Norman Rockwell picture of rural
America that has passed us by.
We pay a lot of lip service to wanting this country to compete
internationally. It is wrong to punish those who pursue economies of
scale in order to do what we preach in our speeches.
I hate to say it, but this amendment is not just about changing farm
policy; it is about changing social policy. Unfortunately, there are
some organizations that want to intimidate or embarrass family farmers
by disclosing personal financial information. Then there are some
environmental groups that, I am also sorry to say, release statements
that are both overstated and misleading.
In the name of common sense, why should anyone want to punish family
farmers who have made investments, large investments, in order to
become competitive in an international marketplace? Why are we trying
to hurt farmers who only wish to provide a decent living for their
families, even though they are facing soaring costs of production? They
do not deserve that kind of treatment. They are already facing the
lowest commodity prices in decades. Why, why, would anyone want to
limit assistance during this time, a time when our farmers really need
it the most?
This is a diverse and distinguished Senate with Members who have all
kinds of experience. But I doubt there is a single Member of this
Senate who has ever bought a cotton picker. Do you know what a cotton
picker costs today? The average price for a new cotton picker off the
John Deere lot in Albany, GA, is about a quarter of a million dollars,
and if you are an average farmer in south Georgia, you are going to
need two of them--and that is just the beginning of the equipment
needs. There are tractors and grain carts and trucks--all are needed to
get a crop out.
By the way, do you know where those cotton pickers are made? In a
great State--Iowa. I wonder if those employees of that manufacturing
plant support this amendment.
The cost of producing crops today is several hundred dollars per
acre. Reduced payment limits and increased benefit targeting fly in the
face of skyrocketing production costs and record low commodity prices.
The PRESIDING OFFICER. The Senator has consumed 5 minutes.
Mr. MILLER. I ask unanimous consent to have 2 more minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. MILLER. I will close by saying this. We have a pretty simple
question here, and it really goes to the heart of this amendment, and
it goes to the heart of each individual Senator. Are we going to reduce
Government support when farmers need it the most? Today, in this land
of plenty, our farmers who produce that plenty are looking into a
double-barreled shotgun. I plead with this Senate not to pull the
trigger. If you vote for this amendment, you will.
In fact, this amendment would give less support to southern farmers
than the current farm bill does. It would limit individual rights to
pursue an adequate way of life in many regions of the country, and it
would result in widespread failure for thousands of American family
farmers. Let's face it, this amendment is a poison pill.
I urge my colleagues to oppose this amendment.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. Madam President, I yield myself 8 minutes.
Madam President, today in New Hartford, IA, at a local cooperative,
the price of our corn would be $1.79.

[[Page S455]]

The price of our soybeans would be $3.96. So, obviously, with these
historically low prices, we have to have a farm bill, a farm safety
net. I want my colleagues to know I take into consideration the plight
of the family farmer when I support legislation such as this.
Since there was the accusation that this might be social engineering,
I think I ought to start with my explanation of a family farm. It could
be a 30-acre truck farm in New Jersey. It could be several thousands of
acres of ranchland in Wyoming, where it takes 20 acres to feed a cow-
calf unit. A family farm, to me, is a farm, not judged by size, not
judged by income--a family farm is determined by, first, whether or not
the family controls the capital; second, the family does most or all
the labor--and I would include in that those people getting dirt under
their fingernails most of the time--and, third, that they are going to
make all the management decisions.
That is as opposed to the nonfamily farm. It could be a corporate
farm, but I don't want to denigrate the word ``corporate.'' Anyway, a
corporate farm, a nonfamily farm, is where somebody provides the
capital, they hire the management, and somebody else does the labor.
So we are talking about, in our family, where I don't get to help
much but I try to help, my son does most of the work. He has an 18-
year-old son in high school who helps. And once in awhile in the spring
and in the fall, there is a neighbor, a young neighbor man who works in
town, who will come out and maybe work into the night 1 or 2 hours a
night, for that person to earn a little more money but also to help
bring the crop in quickly, because you have to.
That is the kind of family farm I talk about when I talk about the
family farm. I don't denigrate anybody else's definition of a family
farm. I just want you to know what I am talking about.
When I talk about targeting farm programs to medium and small family
farmers, I am not talking about something that is new. I am doing it in
what is my understanding of the historical approach of farm programs
for 70 years. The first 40 years of that 70 years we didn't have dollar
limitations, but we really had lost--when 30 percent of the people were
farming, we had a lot of small family farms. There was not any need to
put a dollar limit on it. But in 1976 we put a $50,000 limit on it. In
1996, there was a $40,000 limit. Then there were people who figured
out, How can I get around the $50,000? How can I get around the
$40,000?
You can't write a bill, with the English language the way it is, that
is perfect, that covers every instance. So we come back now and come
back in a way that I think is historically targeting the farm program
towards the medium and smaller farmers.
I don't disagree with everything Senator Lincoln said, because she
said there are some groups out there trying to hit family farmers
pretty hard while they claim to defend the family farm. But I want
Senator Lincoln to understand where I am coming from and what I define
as the family farm. I don't want to be doing something by subterfuge as
do people who really want to hurt the family farm. I simply believe
that $225,000 is enough.
But, more importantly, I have to ask the question: If we don't do
this, where will it stop? The 1996 farm bill, even with the $450,000
limit, had other ways in which you could get up to $460,000. The
managers' amendment in the bill that is before us sets this at
$500,000. The House version is even worse. A Republican version, let me
say, is even worse--$550,000. That doesn't even include the back-door
things that can be used, such as through generic certificates that can
go way above these already high limits to bring in the millions and
millions that have been talked about here for some units.
I think we have to be very concerned in agriculture when we say we
want a safety net for farmers. A sound safety net for farmers is good
for everything that Senator Hutchinson said about social and economic
stability. It is all about national security as well. But we are
spending lots of taxpayer money.
We have to maintain urban support for our farm safety net. Maybe you
can say if we pass this bill that we might not have to worry about it
again for 10 years. But if you go on for 10 years with the bad
publicity about what farm programs have been receiving because 10
percent of the farmers are getting 60 percent of all the benefit, where
are Senator Lincoln and I going to be, if we are fortunate to be in the
Senate, when the next farm bill comes up if we lose public support
because of the outrageous payments that are being received?
We have to start asking ourselves: When is enough enough? How long
will the American public put up with programs that send out billions of
dollars to the biggest farm entities? All this does is damage our
ability to help people we originally intended to help--the small- and
medium-sized producers.
Look back at the intent of our first farm bills. We have never
intended to subsidize every single acre and every single bushel. Our
intent was to bolster the agricultural economy and keep people on the
farm. Lowering limits to these reasonable levels that Senator Dorgan
and I have done will not chase one small- or medium-sized producer off
the farm. But the large entities will have to look to the market for
their additional income above the $275,000, if you include a spouse.
If you do not believe me, let us turn this question over to farmers
and ask them their judgment. You have heard my colleague, Senator
Lincoln, talk about letters of opposition from certain farm commodity
groups. But what do farmers actually think?
I had an opportunity during the break in January to hold 10 or 11
town meetings in my State just on the agriculture bill. I went through
this amendment as intellectually honestly as I could, explaining to my
constituents really what I wanted to do. I had 1 farmer out of those 10
meetings who said he disagreed with what I was trying to do. Do you
know what happened after that meeting? People evidently didn't want to
say it publicly. They came up to me afterwards and said they heard this
other farmer say that he disagreed and that you shouldn't have these
limits. He is an example of the very reason you have to have the limits
that are in the Dorgan-Grassley amendment.
Probably more to your liking, if I don't talk about just Iowa, or my
10 town meetings, last year 27 of the Nation's land grant colleges from
all the Nation's regions came together to poll farmers and ranchers on
their opinions on the farm bill on the issue before us today. On this
amendment, there was enormous consensus.
Nationwide, 81 percent of the farmers and ranchers agreed that farm
income support payments should be limited to smaller farmers. Even when
the results from farmers with less than $100,000 income were excluded,
61 percent of the Nation's farmers agreed that farm income support
payments should be targeted to small farmers; that is, support across
regional lines.
I will maintain the rest of my minute and yield the floor.
The PRESIDING OFFICER. Who yields time?
Mrs. LINCOLN. Madam President, how much time remains?
The PRESIDING OFFICER. Six minutes 21 seconds.
Mrs. LINCOLN. Madam President, I yield 1 minute to the Senator from
Louisiana.
The PRESIDING OFFICER. The Senator from Louisiana.
Ms. LANDRIEU. Madam President, I speak in opposition to the Dorgan-
Grassley amendment. I have the greatest respect for my colleagues from
Iowa and North Dakota. I know they have put forward this amendment in
good faith. I oppose this amendment because there is a great balance in
this bill which was very difficult to put together. It represents all
of our farming interests from different geographic areas of this
Nation.
With this amendment, our farmers in the South--particularly Louisiana
farmers who have cotton, and soybeans, but particularly our cotton
farmers--would be hard hit by this amendment because cotton is an
expensive crop to grow. These price caps will be very detrimental to
family farmers in Louisiana.
In addition, this amendment, while it attempts to put on price caps,
would not necessarily help farmers in other parts of the country. It
would simply hurt the farmers in the South and in Louisiana.
Cotton and rice are very expensive crops to grow. We need to have
these crops covered when the price turns down.

[[Page S456]]

Finally, while price supports drift over to the larger farmers, it is
also the larger farmers who produce most of the crops under the
program. I realize some of these numbers are very large, but so is the
underlying acreage under production, and so are the ownership interests
of these farms.
I support Senator Lincoln and oppose the amendment on the floor.
I thank the Chair.
The PRESIDING OFFICER. Who yields time?
The Senator from North Dakota.
Mr. DORGAN. Madam President, how much time is remaining on our side?
The PRESIDING OFFICER. A minute 35 seconds.
Mr. DORGAN. Madam President, I respect those who disagree with this
amendment. They make compelling arguments from their standpoint.
But I would just ask this: If payment limits are not appropriate at
any point, then will we end up at some point with no family farmers
farming in America but only the largest agrifactories from California
to Maine and still be making payments? For what purpose?
My interest in trying to help family farmers survive during tough
times is to say to them: You matter because you live out in the
country. You are living under a yard light, trying to raise a family
and raise crops, taking all the risks, and we want you to be part of
our economic future. We want to have broad-based economic ownership on
American family farms. That promotes food security in our country. It
promotes the kind of cultural and economic society we want. It is not a
case of just picking and choosing because we don't have enough money.
Let us have the best price support possible, and when we run out of
money, we run out of money. That is the purpose of having a payment
limit amendment.

The PRESIDING OFFICER. The Senator has run out of time.
Mr. DORGAN. Madam President, is the Senator from Oklahoma ready to be
recognized?
Mr. GRASSLEY. The Senator from Arkansas is going to yield time.
The PRESIDING OFFICER. The Senator from Arkansas.
Mrs. LINCOLN. Madam President, I would like to add to what the
Senator said.
Obviously, the problem with the bill is that it completely devalues
the land for the farmers we represent. The banks are not allowing them
to borrow money on the land any longer.
Out of the 130 loans that were presented to one of our local bankers,
only 3 of them have been approved. They are waiting to see what happens
with this farm bill, particularly this amendment.
Madam President, at this time I yield time to my distinguished
colleague and neighbor, the Senator from Mississippi.
The PRESIDING OFFICER. The Senator from Mississippi.
Mr. COCHRAN. Madam President, I am pleased the Senate is working to
pass a farm bill. We need to complete action on this bill as soon as
possible to send a signal that we could have a new farm bill
implemented for the 2002 crop-year.
One of the primary objectives of new farm legislation should be to
improve the predictability and effectiveness of the financial safety
net available to farmers and to eliminate the need for annual emergency
assistance. Unfortunately, the payment limitation amendment that we are
debating now will have the opposite effect.
If this amendment is adopted, it will be a very serious and unfair--
even punitive--act that will be catastrophic for southern agricultural
interests. The costs of production of cotton and rice are much higher
than corn or soybeans. According to agricultural economics analysts at
Mississippi State University, the cost of producing 1 acre of cotton is
approximately $550, while the cost of producing 1 acre of corn is about
$350, and for soybeans it is only about $100 per acre.
On a 1,000-acre cotton farm, the production costs would be $200,000 a
year higher than for corn, and $450,000 higher than for soybeans. This
amendment clearly would be unfair to farmers who produce high-cost
crops such as cotton and rice.
Since 1985, the marketing loan program has been the centerpiece of
our Nation's farm policy. It provides reliable and predictable income
support for farmers while allowing U.S. commodities to be competitive
in the global market. If this amendment is adopted, the marketing loan
program will be undermined and essentially will become useless.
It is expected by the prognosticators that farm commodity prices will
remain low and net farm income will be $8 billion less this year than
last year. Considering this bleak forecast for our farm economy, it
does not stand to reason that Congress should impose new rules and
regulations that unduly restrict Government assistance at this time of
serious economic distress.
Many southern farmers work larger tracts of land because the tight
profit margins lead to efforts to enhance efficiency through economies
of scale. And cooperative farming also helps improve efficiency for
some.
I heard the complaint that as much as 80 percent of the payments go
to only 20 percent of the farmers. But these farmers are producing 80
percent of our Nation's farm output. If limitations on support are made
more restrictive, a significant number of farmers will not be able to
participate in the farm program. If this amendment is adopted, I
predict the pressures for emergency assistance will build and will end
up being more costly in the future.
Madam President, I strongly urge the Senate to reject this amendment.
The PRESIDING OFFICER. Who yields time?
Mr. GRASSLEY. Madam President, I yield 5 minutes to the Senator from
Oklahoma.
The PRESIDING OFFICER. The Senator from Oklahoma.
Mr. NICKLES. Madam President, I thank my colleague from Iowa for his
amendment, and also Senator Dorgan as well.
I have great respect for Senator Cochran. When it comes to
agricultural policy, I look to Senator Cochran for advice. I just
happen to disagree with him on this amendment. I am going to vote for
his substitute. But I do think a limitation is in order.
I was kind of shocked to find out that, in some cases, some farms
have been farming the Government quite well, and they make more money
from the Government than they do from the marketplace. There has to be
some limit. If not, are we going to allow people to just make millions
off these programs?
To a lot of us, this agricultural policy is kind of arcane, and maybe
it is hard to understand. If you are not from an agricultural State and
you do not wrestle with it a lot, it is kind of difficult to
understand. I have tried to understand a little bit of it, and I do
understand a few things: A few people are doing a lot and getting a lot
of money from the Federal Government. That does not mean that their net
is good. They may lose a lot of money. They may get a lot of money from
the Federal Government and lose a lot of money. I do not doubt that
that happens. It happens a lot.
But how much should Uncle Sam be writing in checks to individual
farmers and/or their families? Shouldn't there be a limit? I happen to
think there should be a limit.
I know I have some constituents who are listening right now who are
very disappointed in what I am saying because it is going to cost them
a lot of money if this amendment is adopted. They have told me that. I
respect them. And some of them are family farmers. But there has to be
some limit.
I made my career in business. I did not get Government help and did
not want Government help. But if we are getting Government help, there
still should be some limit on what Uncle Sam is going to do.
Looking at some of the charts--just looking at the top 10 farm
subsidy recipients--my colleague says, a couple of those are co-ops,
but they were averaging almost $10 million a year. And it goes on down
to different farms. Maybe some of those are individual farms, but they
are in the millions of dollars a year.
Should Uncle Sam be writing checks to different groups,
organizations, family farms, and so on, in the millions? I have a
couple of Oklahomans getting in the millions. I do not think we should
do that.
Let's look at the present farm bill. The present farm bill has
basically a

[[Page S457]]

cap of about $460,000. You have the flexibility contracts of $80,000,
loan deficiency payments of $150,000. That is $230,000. You can have
two other farm entities and get half of those again, and so that is
another $115,000. Adding $115,000 twice to that totals $460,000.
But also under the present farm bill some people may say, wait a
minute, I thought some people were getting millions. You have no limits
on what are called certificate gains, so you can get well above
$460,000. That is present law. That is the reason we find some
recipients doing quite well. I say ``doing quite well,'' meaning
getting a lot of money. They may not be doing very well, but they get a
lot of money from Uncle Sam.
Looking at the proposal by Senator Harkin, the underlying bill, they
can do better. Present law is $460,000. Now that level goes up from
$75,000 to $100,000. So now it is $250,000. You still have the two
other farms that can get 50 percent of that. So the combination of
three farming entities can get $500,000.

Also, under Senator Harkin's bill, there are no limits on the
certificate gains, no caps, so they can get more than $500,000.
So if you look at the charts from the Environmental Working Group
that say some people are making this much, they can get a lot more
under the Harkin bill than they could last year, and there is still no
limit, no cap. So you have almost unlimited payments. If somebody
happens to be farming--and you have market prices below loan prices--
they can get hundreds of thousands of dollars.
Let's look at the Grassley amendment. The Grassley amendment says we
ought to have a limitation. So he has flexibility contracts at $75,000,
loan deficiency payments of $150,000, for a total of $225,000, and if
you made another $50,000, that would be a total of $275,000. But guess
what. The certificate gains are included in that $275,000, whereas
under the Harkin bill, and under present law, the certificate gains are
not counted.
So there is a cap under present law. Under the Harkin bill, there is
no cap. This is saying $275,000. Well, $275,000 is a lot of money.
Granted, if somebody is losing $400,000, they may say: I am still
losing money.
I am sympathetic to that. I just don't think there should be an
unlimited amount we are going to be writing in checks. Somebody can
say: Write us a check for $5 million; I just lost $6 million. Where are
we going to stop? I am not a big fan, as some people know, of loan
guarantees, whether we are talking about steel or airplanes. I have
some reservations about the Federal Government making loan guarantees,
subsidizing business, and so on.
The amendment of the Senator from Iowa makes good sense. I urge my
colleagues to adopt it.
I ask unanimous consent to print in the Record a chart that shows the
percentage of payments made by income. It shows the upper 1 percent
getting 19 percent of the payments, and the upper 10 percent getting 67
percent of payments in agriculture.
There being no objection, the chart was ordered to be printed in the
Record, as follows:

Concentration of payments for farms in the United States--
from 1996 through 2000, the top 10 percent of recipients in
the United States were paid 67 percent of all USDA subsidies:

----------------------------------------------------------------------------------------------------------------
Percent Payment
Percent of recipients of Number of Total payments, per
payments recipients 1996-2000 recipient
----------------------------------------------------------------------------------------------------------------
Top 1....................................................... 19 24,111 $13,470,787,292 $558,698
Top 2....................................................... 29 48,221 20,841,600,894 432,210
Top 3....................................................... 37 72,331 26,561,357,813 367,219
Top 4....................................................... 44 96,441 31,231,049,012 323,835
Top 5....................................................... 49 120,552 35,155,503,844 291,621
Top 6....................................................... 54 144,662 38,515,289,723 266,243
Top 7....................................................... 58 168,772 41,427,212,217 245,462
Top 8....................................................... 61 192,883 43,974,881,921 227,987
Top 9....................................................... 65 216,993 46,228,199,437 213,040
Top 10...................................................... 67 241,103 48,231,602,648 200,045
Top 11...................................................... 70 265,213 50,023,935,434 188,617
Top 12...................................................... 72 289,324 51,637,374,388 178,475
Top 13...................................................... 74 313,434 53,094,589,890 169,396
Top 14...................................................... 76 337,544 54,416,196,177 161,212
Top 15...................................................... 78 361,654 55,619,113,574 153,790
Top 16...................................................... 79 385,765 56,717,246,985 147,025
Top 17...................................................... 81 409,875 57,722,841,911 140,830
Top 18...................................................... 82 433,985 58,646,414,190 135,134
Top 19...................................................... 83 458,096 59,497,316,971 129,879
Top 20...................................................... 84 482,206 60,284,320,451 125,017
Remaining 80 percent of recipients.......................... 16 1,928,821 11,245,676,109 5,830
All recipients.............................................. 100 2,411,027 71,529,996,560 29,667
----------------------------------------------------------------------------------------------------------------

Mr. NICKLES. I yield the floor and thank my colleagues.
The PRESIDING OFFICER. Who yields time?
Mrs. LINCOLN. Madam President, how much time remains?
The PRESIDING OFFICER. There is no time remaining in opposition.
There is 1 minute 36 seconds remaining on the proponents' side.
The Senator from Iowa.
Mr. GRASSLEY. Madam President, I yield myself the remaining time on
our side.
We have an opportunity to do what has been a part of farm programs
for 70 years: try to target the safety net for farmers to medium and
smaller family farmers. We have an opportunity to save the taxpayers
some money that would go to big corporate farms. We have an opportunity
to bring money into the Food Stamp Program, and we are adjusting the
formulas to reflect higher payments for shelter and for utilities and
for heating homes so that the Northeast of the United States will be
able to help some of their low-income people to a greater extent than
they have been through the present formula, the Food Stamp Program.
That is the use of the money.
The most important thing is targeting assistance to the family
farmers. The legislation before us disproportionately benefits the
Nation's largest farmers and in most cases nonfamily farmers. In fact,
this farm bill unnecessarily increases payment limitations established
in the present farm program which already allows up to $460,000.
We have a chance to do a very good thing from the standpoint of
bipartisanship that has traditionally been such a part of the farm
program. We have had several bipartisan amendments--for concentration
and arbitration, and now for the payment limitation. Let's see what we
can do to develop a bipartisan farm bill. Voting for this amendment
will be one more bipartisan amendment to be adopted.
The PRESIDING OFFICER. All time has expired.
Mrs. LINCOLN. Madam President, I move to table the amendment and 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 to table amendment No.
2826. The clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. NICKLES. I announce that the Senator from Tennessee (Mr.
Thompson), the Senator from Arizona (Mr. McCain), the Senator from New
Mexico (Mr. Domenici) are necessarily absent.
The result was announced--yeas 31, nays 66, as follows:

[Rollcall Vote No. 18 Leg.]

YEAS--31

Akaka
Allen
Baucus
Bingaman
Bond
Breaux
Burns
Carnahan
Cleland
Cochran
Edwards
Frist
Graham
Helms
Hollings
Hutchinson
Hutchison
Inhofe
Jeffords
Kyl
Landrieu
Leahy
Lieberman
Lincoln
Lott
Miller
Nelson (FL)
Reed
Sessions
Shelby
Thurmond

NAYS--66

Allard
Bayh
Bennett
Biden
Boxer
Brownback
Bunning
Byrd
Campbell
Cantwell
Carper
Chafee
Clinton
Collins
Conrad
Corzine
Craig
Crapo
Daschle
Dayton
DeWine
Dodd
Dorgan
Durbin
Ensign
Enzi
Feingold
Feinstein
Fitzgerald
Gramm
Grassley
Gregg
Hagel
Harkin
Hatch
Inouye
Johnson
Kennedy
Kerry
Kohl
Levin
Lugar
McConnell
Mikulski
Murkowski
Murray
Nelson (NE)
Nickles
Reid
Roberts
Rockefeller
Santorum
Sarbanes
Schumer
Smith (NH)
Smith (OR)
Snowe
Specter
Stabenow
Stevens
Thomas
Torricelli
Voinovich
Warner
Wellstone
Wyden

NOT VOTING--3

Domenici
McCain
Thompson
The motion was rejected.
Mr. REID. I move to reconsider the vote.
Mr. LUGAR. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER (Mr. Miller). The question is on agreeing to
the amendment of the Senator from North Dakota, amendment No. 2826.
The amendment (No. 2826) was agreed to.
Mr. REID. I move to reconsider the vote.
Mr. LUGAR. I move to lay that motion on the table.

[[Page S458]]

The motion to lay on the table was agreed to.

Amendment No. 2827 to Amendment No. 2471

The PRESIDING OFFICER. Under the previous order, the Senator from
Indiana is recognized to offer an amendment regarding payment
mechanism. There will be 2 hours of debate prior to a vote in relation
thereto.
The Senator from Indiana.
Mr. LUGAR. Mr. President, I alert all Members and staff as they
prepare to go to lunch, we will have a debate for the next 2 hours and
vote at approximately 3:05.
This amendment is a radical adjustment. I am hopeful Senators will be
alert to the particulars as well as to the general philosophy of the
amendment. It deals with the commodity title. As I have stated on other
occasions, the other titles of the bill have had strong bipartisan
support. As a matter of fact, we have improved them in the amendment
process, especially a nutrition amendment that Senator Durbin addressed
this morning in his amendment.
My criticism of the commodity area of the farm bill is substantial.
It comes down to the first point that we are debating this bill at a
time in which our Nation is apparently in deficit finance, which means
essentially we are spending more money as a government than we are
taking in. That means each dollar of additional deficit comes from the
Social Security trust fund. Most lament that; both parties, through a
lockbox strategy or through pledges, want that sacrosanct and recognize
the public as a whole does not like the idea of the Social Security
trust fund being invaded. That dislike is compounded by predictions
that it will occur perhaps for many years, not simply for the year we
are in or, as a matter of fact, the year we just concluded.
I make that point not to say we should not proceed with the farm
bill. We are going to do that. I support that. We are working with the
distinguished chairman to try to finalize amendments and get a roadmap
of how to do that. We are prepared to spend some money. However, we had
better be thoughtful and prudent. I am suggesting that the current
commodity title that lies before the Senate, plus or minus whatever
adjustment amendments are brought to it, is about a $44 billion
expenditure over 5 years of time. It is frontloaded into those 5 years
of time. The Secretary of Agriculture already has expressed objection
on the part of the administration to that.
The amendment I will offer today is a $25 billion payment for a 5-
year period, as opposed to $44 billion. This is for 5 years. It is a
very substantial change. It is a prudent change, in my judgment.
Now the second point I want to make is, if the first was not
imperative enough in terms of deficit finance and money we do not have,
the money that would be spent in the Daschle-Harkin bill would go--as
we have heard again and again in the debate, approximately two-thirds
of the money would go to approximately 10 percent of the farmers.
It is even more concentrated than that. In fact, the bills we have
had in the past, and this bill, essentially deal with the basic row
crops of cotton, rice, soybeans, corn, and wheat. That has been the
case since the New Deal days in the 1930s and still remains the case in
this bill. There are smaller amounts of money, from time to time, to
vegetable crops--to dairy, to tobacco, to peanuts--but essentially the
money is on the row crops.
That means that essentially six States receive half of the money
because these are large States and they have row crops as opposed to
agriculture of different sorts. So the bill is highly skewed. It is not
original in that respect. That has been true of this legislation for
many years. Nevertheless, we compound that problem in this bill.
To lay it out so all of us can understand it, 60 percent of farmers,
more or less, do not receive any subsidies; 40 percent receive all the
subsidies. Of the 40 percent, 10 percent of those receive two-thirds of
the subsidies.
As I illustrated in debating the last amendment with regard to the
limitation of $275,000 for a husband and wife or $225,000 for a single
farmer, in my State of Indiana we have a very different result than was
the case in the State of Arkansas, the proponents of the legislation.
But in either case there are very few people who benefit--who receive,
actually, more than $275,000 now. Only six farmers in Indiana,
apparently 583 in the last iteration in Arkansas. We have 98,000
recipients of subsidies in Indiana; Arkansas has 48,000. So any way you
look at it, 6 or 583, those particular farmers receive extraordinary
sums of money, which skews the payment situation in a way that strikes
most persons who are talking about retaining the family farm and
supporting the modest farmer as very strange.
If in fact our intent was to save the family farmer, to cashflow
those farms that are in trouble, it would appear that we could probably
do better than have one-third of the money going to 90 percent of the
farmers. As a matter of fact, it becomes even more progressive in the
other way as you proceed down through the ranks.
So I add that thought. Not only are we in deficit finance, but we
have a formula that, by its very nature, is going to reward those who
are very large. Some would say, Why is that a bad idea? Is it not the
American ideal, as a matter of fact, to succeed, to accumulate more
land, to have more crops? Indeed, it is. The basic question is not one
of merit. No one is being prohibited from becoming big and succeeding.
The question is whether subsidies that were meant to save family farms
contribute to that process.
The third point I want to make is there is strong evidence that our
past farm bills--the immediate one we are working on now, the bill of
1996, the one of 1991 before that--have offered incentives to produce
more. Why is that bad? Because we almost guarantee that, absent a huge
weather problem or a total breakdown in the world trading system
because of war or pestilence or disaster, we will have more of each of
the basic row crops almost every year.
There are good incentives, in fact, to produce more, because each
bushel of production brings its reward in higher subsidies. Therefore,
Senators come to the floor and lament the fact that prices have never
been so low. Well, of course. The very bills that we are passing almost
guarantee they will be stomped down every year. It is impossible to
think of a scenario in which we are more likely to have this problem.
Mr. President, I got so carried away in my arguments, I failed to
call up the amendment. So, as a result, I will do that at this point,
hopefully having whetted the appetite of the Chair.
I call up the Lugar amendment and ask the clock start running on
debate time.
The PRESIDING OFFICER. The clerk will report the amendment.
The legislative clerk read as follows:

The Senator from Indiana [Mr. Lugar] proposes an amendment
numbered 2827 to amendment No. 2471.

Mr. LUGAR. I ask unanimous consent 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, the dilemma for the small farmer is
compounded because, in essence, as overproduction occurs, prices remain
very low. That hurts large farmers, too. But, as a matter of fact, many
large farmers are large because they are efficient farmers. They do the
research. They learn about the marketing tools available in futures
contracts, forward contracts. They employ the proper conservation
procedures and have the capital to do so.
As a result, it is not surprising that despite each of our farm
bills--and the argument has been made every 5 years or 6 years, or
however often we do this, that we are going to save the family farm--
that in fact there are fewer family farms each time around. That, some
would point out, has been true from 1900 onward--perhaps before that
time.
One of the strange things about farm statistics presently--and I will
not analyze this in depth--is there has been an increase in farms that
are fairly small. These apparently are farms that are purchased by
professional persons who want some room around their residences. If
they produce on those premises at least $1,000 worth of agricultural
produce or animals, then they qualify as a farm in the sense of this

[[Page S459]]

definition. So this has led to a certain expansion, in some States, in
which this would be counterintuitive.
But the heart of the matter is that about 350,000 farmers out of the
1.9 million who do at least $1,000 or more, those 350,000 do roughly
five-sixths of the bill, all of it, in terms of crops or livestock. So
essentially some have said farm policy is aimed toward them.
But at that point, very clearly, Senators rise and say: Hold on. That
leaves 1.6 million entities out there, and some of these are family
farmers. I know them. They are my constituents.
I would simply say the degree of concentration, often lamented,
continues fairly rapidly. It does so, in part, because our farm bills,
with very generous subsidies, support loans from banks and they have
apparently led to an increase in land values in most States. That I
witnessed with regard to estimates and appraisals on my own property in
Indiana from 1956 onward. I have had responsibility for that farm. It
is exciting to watch. Thank goodness we did not have to buy and sell
during that time; we could simply watch the changes in the balance
sheet.
But clearly it was an exciting experience throughout the 1970s,
watching land values, as Purdue estimated them, go up and go up,
sometimes by double digits in a single year. So as I took a look at my
604 acres and began to multiply by 2 or 3 those values, that was pretty
exciting.
It was pretty depressing; after Paul Volcker and others put the skids
on interest rates to try to take the Federal Government off in a
different way, the value of farmland in Indiana plunged by as much as
50 percent to 70 percent.
That kind of jarring situation, many farmers who have lived a long
time have become used to. But we are now, much more mildly than in the
1970s, but progressively, seeing those land values increase. For the
general public, this seems strange.
The general public looks in on farming, and they ask: Why are farmers
coming into the Senate pointing out that the prices have never been so
low? The prospects have rarely been so dim with people lined up at the
country banker failing to get loans, and all the signs are that even
farmers who appear to be fairly prosperous are near bankruptcy.
The USDA illustrates this fine point. They point out that as you look
at the balance sheet for all of American agriculture, the assets have
been rising throughout the last 5 years. As a matter of fact, the net
worth of farmers has been increasing. How can this be if operating
results are so dismal?
In fact, operating results have not been that dismal. In the year we
just finished, 2001, it appears that cash income is $59 billion for all
of American agriculture. That is plus-$59 billion--not negative. But
the real change comes in the asset value of farmland. With the pricing
of land moving up, it is apparent that on paper the net worth of
farmers is increasing substantially.
I make that point because many bankers, as you visit with them--as
the distinguished Presiding Officer certainly has--would say we are
counting on these farm bills to keep those values up. Why do you think
we are prepared to loan more money or even any money without some
assurance that farmland not only retains its value but nevertheless has
a robust quality to it?
We then get into a problem in which farmers say: Hang on. Whatever
may be the justice or injustice of the farm bill, if you tinker around
with that bill very much, you are going to create anxiety with country
bankers. They may not make loans. At that point, then we have a real
problem.
It is not my purpose today to try to precipitate a decline in land
values. That would be destructive not only of my own farm but to all my
neighbors. I just observe, however, that without describing a bubble
phenomenon--because it is not that; farms are not dot.coms and not
electronic situations--there is value there. But we need to be
thoughtful in terms of our policies as to how much steam we want to
generate into what some would call false values--increases clearly not
justified by implied income flow coming from those properties.
The dilemma, of course, for the young farmer we have talked about--we
have a section in our farm bill that tries to address credit for young
farmers--is that it is extremely important if we are to have entry of
our young people. As most have pointed out, the average age of farmers
seems to increase every year. Demographers indicate it has been true
for quite some time. It has been proceeding towards the high 50s. That
is not a healthy situation. That is not a healthy situation for a
growing, prosperous industry, but it reflects the realities of young
people coming through our agricultural schools.
The vast majority go into what might be loosely called agribusiness--
not production farming. They are dealing with products that come from
that, or marketing, or the espousal of farm interests in foreign trade,
what have you. These are valuable skills. But the number of persons
heading back to head up these family farms to keep the continuity going
appears to be fairly limited. Some years are better than others.
The distinguished Presiding Officer has visited the excellent
agricultural facilities with educational opportunities in Georgia, as I
have at Purdue in our State. We encourage young people to farm. Some
do. Some years are better than others. But for some years, there
appears to be very few candidates for that.

One reason is it is very hard for a young farmer to get credit and to
establish a landhold. If you are in a family farm now, that is your
best bet. As inheritance tax reforms have occurred, many of us have
pointed out they needed to occur because the family farmer is 15 times
more likely to be visited by the inheritance tax than other ordinary
citizens. The assets are tied up in the land, in the buildings, the
visible assets. But if a family can work that out, there is some
possibility for the young person. These are fairly small percentages of
situations. I think that is a disturbing trend but one that current
farm bills, I believe, have accelerated.
There is also the fact that as we discussed the last amendment on
limits, some pointed out that farmers, in fact, are renting land from
those who have estates, or elderly persons, retired farmers, and
others. Indeed, a lot of renting does go on.
The 120-page USDA booklet indicates that 42 percent of farmers who
are now involved in production are renting land. Only 58 percent own
the land they are farming. That is a fairly large number.
Our farm bills have the tendency to raise the rents in the same way
that they have raised the land values; in the same way they raise the
possibility for larger loans for expansion or for accumulation of other
farmland. None of these trends are new and none should be shocking.
Many farmers, as well as Senators, say that is just the way the world
works. These are trends that are in place, and we are only going to
tweak the system a little bit and hopefully not disturb it a lot,
although some Senators have greater ambitions for the farm bill.
They believe, in fact, that a very sizable change is going to occur
if over a 10-year period of time, as the House of Representatives looks
at it, you put $73.5 billion of additional money into American
agriculture on top of the baseline of the regular programs we now have.
So a lot of our debate in November and December revolved around the
$73.5 billion, as Budget Chairman Conrad said it is. Ultimately, the
Bush administration said: Well, we are going to acknowledge that it is
there now, and in this year, and so forth. But there now appears to
have been an argument over the situation. But some of us looking into
this--I am one of them--said it wasn't in November, and it isn't there
now. We do not have the money, and, therefore, we have to be thoughtful
about it.
I simply add that everybody--the President and Senators in both
parties--wants a farm bill. The question we are discussing today is not
whether we should have a bill or not.
The amendment that I have offered substituting for the total
commodity package still, by my own admission, is that it is going to
cost $25 billion over 5 years--not $44 billion over 5 years but $25
billion. But it is still a sizable sum.
The basic difference in my approach is that I take seriously the
thought that we ought to have equity in the payments. By that, I mean
they ought to be available to any farm family wherever that family may
be in America and whatever that family produces.

[[Page S460]]

That would be a revolutionary step. That is what I am proposing.
I started by saying 60 percent of farmers are outside the game
altogether. I want to bring them in.
They will occasionally come in when we have disaster relief debates--
perhaps a strawberry crop in a State or a peach crop or a problem of
cranberries in New England comes to the fore. Senators in that State
say we have had a disaster brought about by weather, usually, or some
other problem. Therefore, we need relief.
On an ad hoc basis, the Senate from time to time in the
appropriations process plugs in some money for what is known as
specialty crops or crops other than these five major row crops. From
time to time, we have done something for livestock but not very much.
We had a debate yesterday about the EQIP program. This has been a way
of trying to bring some money so that manure could be controlled and
other environmental circumstances surrounding a livestock operation.
The bill that the distinguished occupant of the Chair and I have been
involved in on the Agriculture Committee does a lot more for the EQIP
program. There has been a long line of people waiting to make those
changes, so that will be helpful both to production in livestock as
well as the environment and the counties that surround it. But at the
same time, livestock people, aside from the pork dilemmas of 2 or 3
years ago when prices reached rock bottom, have not gotten the subsidy.
Sometimes people have wondered historically, why not? They were back
in the 1930s when all this began to be passed out. Why haven't we been
in that tradition? But, nevertheless, some, by diversifying, have corn
farms, say, and get the money in that route, by spreading at least the
risk, and they have imbibed in the farm subsidies in some fashion. All
I am saying is, there is no equity, farm by farm, in the farm bill as
we have known it. So I want to provide that.
I want to say, in essence, three things. One is that my bill would
send money to any farm entity that has at least $20,000 of gross
agricultural income coming from it, not the $1,000 which has been the
definition of the family farmer. That is too low. It picks up what I
think are clearly the so-called hobby farms or the almost incidental
farming that occurs.
Some might say: But $20,000 is not much of an activity. Nevertheless,
in some parts of the country--and given the history of some farms--that
appears, to me, and to many economists who have looked at the subject,
a reasonable threshold point.
So let's say I am a farmer--male or female--on a farm anywhere in
America, producing anything I want to produce, and I can sell it for
$20,000. I would qualify, under my amendment, for a $7,000 payment from
the Federal Government each year for 4 years, starting with fiscal year
2003, and going through 2006, so long as I continue in the business. I
would have to do the $20,000 each of the 4 years. This would not be a
historical record but an actual record that I am a farmer and I am
doing that kind of business.
And the question is raised, what if you have a situation in which
there are two factors here--one a landlord and one a tenant or two farm
families, one owns the land and the other provides the machinery and
some of the labor, or what have you. Both of these entities could
qualify for the $7,000 payment if both are at risk. If the landlord is
simply getting the rent, without risk, then the landlord does not get
the $7,000. The tenant gets the $7,000. He has the risk. So it is a
question of being at risk and with at least $20,000 of income. Then you
receive $7,000.
I make the point that this finally, then, gets us to the threshold
question of why we have farm bills and why we have income security. My
idea is that we provide income security for the vast majority of
farmers in this way. It means the very large farmer still gets the
$7,000. We will not be having a debate about $275,000, however. That
really moves off into past history. I am talking about $7,000 for each
farm family at this point.
That raises the question for skeptics of all programs: Why do you
send $7,000 to a person in America because he or she is a farmer? We
have settled that, I suppose, by all of us saying, several times, that
we understand there are abnormal risks from weather, from foreign
trade, from all the vagaries of history. It may or may not be totally
just to those people who make their money at the retail store on Main
Square or to those who venture capital into new businesses and lose it
or to a whole lot of people who make livings in various ways, but what
we are saying is we believe it is important to have a safety net.
What I am saying is, it should be just that, a safety net, not an
incentive to produce more and, thus, depress prices, or an incentive to
accumulate land using abnormal land values to borrow money, knowing
that at some point this cascade is almost bound to lead to difficulty.

It ought not to be a program that excludes young farmers and one that
is purely prejudiced against those who rent. And it ought not to be a
program in which six States receive 50 percent of the money. This
really does indicate in every State there are agricultural interests,
but they are diverse and they are different. Where there are more
farmers, the State will get more money. That is true of distributions
of all sorts.
Having sort of recited the outline of where I am headed with this,
let me say I believe the amendment I have offered will achieve each of
the goals I have in mind: less money paid by the taxpayer, greater
equity to all farmers, a genuine safety net, a policy that does not
distort land values, does not depress prices, and, finally, does not
lead to real problems with our trading partners, whether it be in the
WTO or any other trading arrangement.
We debated that issue yesterday as to whether the current text of the
farm bill, before amendment, leads to bumping up against the $19
billion cap. In my judgment, and that of many others, we risk that. The
FAPRI group--the research people at Iowa State and Missouri--said there
is a 30.3-percent chance that will occur in 2002, as a matter of fact.
That really does jeopardize American agriculture.
We can say we do not care what the rest of the world thinks about all
this and, after all, that the Europeans are subsidizing in a big way--
maybe some others--but we need every dollar of export income. We cannot
have countervailing suits or retaliatory mechanisms that abnormally
affect certain crops as countries try to find where we are vulnerable
and arbitrarily knock out one group of farmers while they are trying to
hit the whole system.
Furthermore, we are the leaders in world trade. We are the people who
really want to expand this. We have to do that if we are genuinely
thoughtful about the future of American agriculture. To take some type
of a myopic view that we simply deal with ourselves leads, finally, to
the fact that is all we will be doing, and it is a limited market.
So given the extra incentives, prices will inevitably go down and
stay down because there is no outlet in terms of American agricultural
genius.
Let me point out that agricultural subsidies have been distributed
according to acreage. Some have said that is the way it ought to be:
You do more, you get more. I understand that. To some extent, I
recognize, as the Presiding Officer does, that this has led to a
situation of roughly two-thirds of the payments going to 10 percent of
the farms. USDA--more graphically getting down to this 350,000 I talked
about--says 47 percent of all the money went to them, almost half to a
very isolated group of people. They are very good farmers, but if that
is the purpose of the farm bill, that is not what the rhetoric we have
been hearing would bring about.
The Daschle-Harkin bill spends the bulk of $120 billion on new fixed
farm payments, on new countercyclical payments, on higher marketing
assistance loan rates for program crops. It, likewise, extends, for
dairy, the milk price support of $9.90 per hundredweight through 2006.
It also creates a new national income support program. Overall, the
dairy provisions are expected to cost $2.3 billion over and above the
baseline.
A new target price is created for peanut producers, and that is
expected to cost $4.2 billion over 10 years, and nearly $700 million
more than the House-passed peanut provisions.
The CBO projects the Daschle-Harkin bill may cost $120 billion over
10 years,

[[Page S461]]

but its actual cost could be 25 percent or even 50 percent larger if
commodity prices fail to rise. That is a pretty good bet. I don't see
how they rise under these conditions.
I am going to have another amendment in due course in the debate that
will suggest we take the average payments of the last 3 years of the
farm bill. Those have included not only the regular payments, baseline,
AMTA, and so forth, but the supplemental legislation we passed each
summer. These have been pretty heady sums of money all told. I am going
to offer an amendment that will suggest that the payments, if we adopt
the Harkin-Daschle approach, shall not exceed that average of the last
3 years, just so there are some stoppers with regard to some fiscal
sanity in this bill.
This becomes an entitlement. If you are out there and you produce the
bushel, you expect to get the loan or the payment and not a lecture
that, after all, we only budgeted $120 billion.
That is not a part of this amendment, part of the next one, in the
event I am not successful with this amendment. But if I am successful
with this amendment, we have solved the problem. There is no doubt as
to what the cost is going to be at that point, nor any incentive to
overproduce. In fact, it is very likely that prices will rise as people
make rational decisions on what to plant.
Let me conclude this initial presentation by pointing out, for those
who have not followed it from the beginning, that this is a complete
substitute for the commodities title of the bill. That means all the
programs involved in the commodities title would no longer be there
and, in fact, in place is a payment of $7,000 to each farmer in America
or each entity at risk of $7,000 for a 4-year period of time, providing
the safety net I believe we want, with strong bipartisan support for
that in a very predictable and equitable manner.
I yield the floor and suggest the absence of a quorum. I ask
unanimous consent that the time be equally charged to both sides.
The PRESIDING OFFICER. Without objection, it is so ordered. The clerk
will call the roll.
The legislative clerk proceeded to call the roll.
Mr. LUGAR. 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. LUGAR. Mr. President, I am pleased to announce I have received a
letter from the Council for Citizens Against Government Waste, dated
February 7, 2002. The letter states:

Dear Senator Lugar: On behalf of the more than one million
members and supporters of the Council for Citizens Against
Government Waste, I am writing to inform you of our support
for your amendment to S. 1731, the Farm Bill, which would
replace current farm program payments with fixed annual
equity payments to eligible farmers beginning in 2003.
Your amendment provides equitable Federal assistance to all
U.S. farmers and ranchers, and it saves taxpayers
approximately $20 billion over the next five years. Current
farm policy allocates two out of every three farm subsidy
dollars to the top 10 percent of subsidy recipients, while
completely shutting 60 percent of farmers out of subsidy
programs.
Your amendment will provide a more equitable farm program,
a significant improvement over the present system, which
provides the overwhelming percentage of government payments
to large farms rather than smaller farms that are most in
need of assistance.
[The Council for Citizens Against Government Waste] will
consider a vote on your amendment in the 2002 Congressional
Ratings.

It is signed by Mr. Thomas Schatz, president.
I yield the floor and suggest the absence of a quorum, with the time
equally charged against both sides.
The PRESIDING OFFICER. Without objection, it is so ordered. The clerk
will call the roll.
The legislative clerk proceeded to call the roll.
Mr. LUGAR. 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. LUGAR. Mr. President, USDA's Economic Research Service estimates
that in calendar year 2000, the latest year for which this data is
available, there were, in fact, 764,000 farms in America with an annual
gross farm income of $20,000 or more. I cite that figure to give some
idea of the number of farms that, given this threshold, we are
discussing in this amendment.
As I mentioned, on some of these farms there are at least two
entities--maybe more--sharing production risk and having $20,000 at
stake in terms of gross income. Each of these entities would qualify
for a $7,000 payment.
This means that those who have been scoring the amendment estimate
there could be, under the widest interpretation, as many as 1.3 million
payments of $7,000 a year.
That is the basis upon which we arrive at the $25 million sum for all
of the commodity section over a 5-year period of time. I make that
point simply to undergird, for Senators who are listening to the
argument, the financial aspects.
I think it is of interest as to how this works out in real life. I
cite once again the Environmental Working Group Web site with regard to
my home State of Indiana. For the years 1996 to the year 2000, it
breaks down the annual payments, not the 5-year total but the annual
payments of farmers in my State. I cited earlier that in this
particular situation, almost 100,000 farms receiving some payment have
been identified. It is interesting that in Indiana about 75,800 of
these farms received no more than $5,000 on an annual basis during this
period of time. So this means, even if one extrapolates up into the
next group, $5,000 to $10,000 where there were 9,500 more farmers,
splitting that in half, roughly 80 percent of the farmers of Indiana,
80 percent who were receiving farm payments, received less than $7,000
in this period of time. That is why $7,000 per farm entity makes a
significant difference to a large majority of farmers in my State.
I think most Senators will find, if they do the arithmetic, $7,000
for a farm entity of $20,000 at risk, $20,000 gross but the farmer at
risk, means anywhere from three-quarters upwards of actual farmers in
the Senator's State will do better under my amendment than under the
Daschle/Grassley bill.
I hope Senators understand that. I am certain at some point farmers
will understand that, and farmers presumably will hold Senators
responsible for looking after their interests.
So to underline the obvious, again, my statement is that roughly 75
to 80 percent of farmers who now would receive $7,000 in each of 4
years if they continue in farming will do better than the payments they
would receive under the farm bill that is now before us. Clearly, if we
are deeply interested in the majority of American farmers, especially
those farmers who are most in jeopardy of losing their enterprises, we
will be interested in this group. This is the safety net that is
provided by my amendment.
I yield the floor, and I ask unanimous consent that the time be
equally divided against both sides.
The PRESIDING OFFICER (Mr. Edwards). Without objection, it is so
ordered.
The Senator from Iowa.
Mr. HARKIN. Mr. President, might I inquire of the situation. I
understand the pending Lugar amendment is 60 minutes evenly divided.
Could the Chair inform us about how much time is remaining on both
sides?
The PRESIDING OFFICER. The Senator from Iowa has 52 minutes, and the
Senator from Indiana has 70 minutes.
Mr. HARKIN. Mr. President, I yield myself such time as I may consume.
Mr. President, I have, as the Senator from Indiana knows, great
respect for him. We have had a great working relationship on the
Agriculture Committee. I daresay, without any fear of contradiction,
that perhaps in most, if not almost all, of the present focus that we
have on agricultural research and the changes that were made in
research were because of the leadership of Senator Lugar.
My friend from Indiana has been unafraid in what I call pushing the
envelope in trying to think outside the box on agriculture, and maybe
in some ways we find ourselves in a box on agriculture. I might be one
of the first to admit that. We have over 60 years of Federal farm
programs that have been designed, in essence, to try and support our
farmers, our farm families, during periods of low prices, during
periods when their income would fall basically due to no fault of their
own.
A lot of times my urban friends will ask me why do I have all of
these farm

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programs. There is not the same thing for a hardware store, or the dry
cleaning shop, or a number of other main street businesses. I always
have to bring them through the process of why we are where we are, and
that agriculture is really unlike a Main Street business in that there
are so many variable factors beyond the farmer's control.
We know the classic ones, of course: weather, the droughts, the hail,
the rain, the cold, the heat, whatever it might be, those vagaries of
weather. Now, to a certain extent we have over the years attempted to
protect the farmer from those vagaries with different forms of
insurance programs, but then sometimes those insurance programs do not
meet all the needs.
First, it was hail and fire. Now, we have gotten into all-crop, all-
peril, all-risk insurance. We are doing that now so that has been
helpful.
So there is weather. Then there are the other vagaries of
agriculture, and that is basically on the world market in which we now
find ourselves. What one country might do, as in Brazil, in Argentina,
or the countries of Europe, might drastically affect what happens to
the farmers in this country. We do not have much control over that.
Then there are the other vagaries of disease and pestilence, and so
forth, that affect our livestock industries in this country. Of course,
we continue to do research and to support APHIS, the Animal and Plant
Health Inspection Service, and others, to help us in our continual
battle against the infestation of either disease or pests in our crops
and livestock. Put all of these things together and that individual
farmer has literally no control over the marketplace, none whatsoever.
It has often been said the farmer is the only person who buys retail
and sells wholesale and pays the freight both ways. That basically is
true. So we build up this elaborate network of farm support
programs, to me, different vagaries of farming as we go through the
years; different now than it was 30, 40, or 50 years ago.

Our programs change, but they have the essential underpinning of
ensuring that, No. 1, we will have an adequate supply of food and fiber
for the citizens of this country, that we will have that food and fiber
in a way that will ensure no one really goes hungry in this country. On
that side of the ledger we have built up quite a system, also, of
nutrition programs. The most famous is school lunch. But there are a
lot of others. So we made it possible for this country to be the best
fed and to have the largest variety and the most quantity at the
cheapest prices of all sorts of food, especially wholesome food. There
is some food that is not too wholesome, but at least in the wholesome
foods that is true.
That is a reason we have dairy programs. We found through the history
of the dairy programs, when we had the spring flush, prices would go to
nothing. A lot of farmers found that they could not make it. But in the
middle of the winter, the price of milk would skyrocket and kids would
be left without milk. We wanted to even this out. We came up with dairy
programs to even that out. They have worked quite well overall.
It is true we have an elaborate system of support programs. If we
were starting over and we had a clean slate, we might start a system of
equity such as the Senator is talking about. We are not starting with
that clean slate. We have to take into account what has happened with
land prices, what has happened in the local communities, what this
would mean if we were to yank the rug out all of a sudden from under
these programs.
If our experience under the last farm bill, under the Freedom to Farm
bill, had been different and we had some reason to believe that farm
programs would be phased down and eliminated, maybe this would have
been the right approach. We saw that was not going to happen under
Freedom to Farm. So all of these programs have been woven into the
fabric not only of our farms but of our rural communities, our schools,
our businesses, our colleges, our transportation.
Earlier we mentioned the value of land. Some may argue, rightfully
so, we have a land bubble out there; we have prices of land, and the
value of the commodity for that land cannot support that price. This is
not speculative land, land near a city waiting to be developed. To a
certain extent, some of the payments we have put out there in the past,
in the last farm bill and the one before that and the one before that,
going back for quite a ways, have had a more perverse effect than what
we intended. It has, in fact, increased the price of land beyond what
the productive capacity of that land could support. This has not
created a good situation.
We just had a vote on payment limitations, which I support. What has
happened--I see it in my own State the way the farm program is
structured--the bigger you are, the more you get; the smaller you are,
the less you get. The payments go to the larger farmers. They then go
out and bid up the value of the land above what the smaller farmers can
get, or a beginning farm can do, and you get bigger and bigger farms.
Since I was a kid, I have been watching farms get larger in my
backyard. I come from a town of 150 people. I still live there. All the
farms around my hometown are getting bigger all the time. Some of that
was inevitable, due to mechanization, better equipment, better seed,
better fertilizer, better control over pests. So the production kept
going. That kept the price of our food very cheap in this country. It
was inevitable that farmers would not stay with 40 acres and a mule;
farms would get bigger.

Over the last few years--I don't know if I could use a cutoff date,
maybe 15 or 20 years--our farm programs have accelerated the process
and have added to it and have made it worse, exacerbated it. We do have
a land bubble. One might say we should not have a land bubble; land
ought to be worth what it can produce or whatever it can bring on the
market for speculative purposes but not based upon Government payments.
I can accept that argument.
What I cannot accept is pulling the rug out right now. We cannot do
that. This has been built up over 60 years of time, and accelerated
over the last perhaps dozen years, 15 or so years, maybe more. We have
to be very careful how we approach modifying and changing what we do in
agriculture and how we support our farmers. To make this drastic change
right now would cause a collapse of land prices which would devastate a
lot of farmers.
In rural America, it is often said most farmers live poor and die
rich. That has basically been true throughout my life. That is their
retirement. The farm they have is their retirement. If we pull that out
from underneath them, it will be like all the people with their
pensions in Enron. Pull the rug out from underneath our farmers, let
those land prices collapse, and we have treated them like Ken Lay
treated the people at Enron. We do not want to do that. That would
devastate our public schools that rely on the property tax in rural
areas and our small towns.
What to do, then, if that is the situation? Do we take a drastic
turn, as my friend from Indiana wants to do? I hope not. That would be
devastating. In other words, what we ought to do is try to work within
the structure that we have and start to move this engine a little bit,
just to move it a little bit, and start to change the way we do support
agriculture. The bill before the Senate is a balanced bill in that
regard. Yes, we do spend more money on commodity programs. We do
because farmers need it.
The Department of Agriculture estimated a couple weeks ago there will
be a 20-percent drop in net farm income this year unless we come in
with some kind of a payment. I ask anyone listening or watching to
think of your own situation. What would you do for your family if this
year you had a 20-percent drop in your net income? What would you do
with your lives? What would happen to your kids? What would happen to
your car? What would happen? Think of the farmers with a net income
drop of 20 percent this year. I wish it were not so, but that is the
fact.
So we have more money on the commodity programs this year. However--
and this is a big but--this bill, developed with a lot of bipartisan
input, through the committee process, amended on the floor as it has
been amended and probably will be in the next couple of days, this bill
puts more money in commodity programs, but we spend more on a broader
agricultural constituency. We provide new--and more--conservation
spending. That is

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income to farmers in a way that has never been done before.

Before, we would say to the farmer: If you take your land out of
production, we will pay you for it. That has sort of reached its
limits. So now we say to the farmer: You be a good steward of the soil,
you keep your soil from running off; you, livestock producer, make sure
you don't have the manure runoff that is killing fish in the streams
and fouling underground water; you, row cropper, cropping the hills,
put in some buffer strips along the streams, put in some grass
waterways; you on the plains, cut down on the wind, put in some
windbreaks, do things like that, rather than plowing up the land; do
ridge tilling, hold the soil down--we will pay you for it.
That is a conservation security program to begin paying farmers to be
good stewards.
Many farmers are already doing that and this bill would not cut them
out. This would not say they would have to do anything different. They
would just have to continue what they are doing and they will get paid
for it.
That is a change. There are some in this Chamber--there were some in
our committee--there are some who do not want to do that. The Cochran-
Roberts bill that was offered as a substitute took that conservation
out and threw it out the window. Fortunately, it only received 40
votes. But I think there is great support for that movement of
beginning to pay all kinds of farmers, whether they grow row crops or
livestock, orchards, vegetables, fruits--whatever it might be--to
support their income in a way that provides a payoff and a better
environment. So that is in this bill.
We also have, for the first time, an energy title in this farm bill.
If September 11 taught us anything, it ought to have taught us that we
have to cut the oil pipeline to the Mideast. Again, do we want to cut
it this year? No, we can't do that this year or next year because our
energy system in this country is too dependent on it. But we ought to
begin planning and doing things now that will get us off that oil
pipeline.
I daresay drilling for oil in the Arctic National Wildlife Refuge is
not one way to do that. That will still keep us hooked up to the oil
pipeline. What we have to do is begin to look at our farms and our
fields as the substitutes.
Anything that can be produced from a barrel of oil can be produced
from a bushel of soybeans or cottonseed or corn and other products.
I visited a relatively small farm in northeast Iowa last weekend. The
farm family there had agreed with the University of Northern Iowa that
they would participate in a project to make axle grease out of soybean
oil. If you look at it, it looks just like grease. Already they are
working with large trucking companies to buy this grease for their
fifth wheel, and working with I think the Norfolk Southern and other
railroads to grease the railroad tracks with it. Why? Because it is
totally biodegradable. Hydraulic fluids can all be made from soybean
oil. In Cedar Rapids right now we have over 30 buses running on soy
diesel.
I think we have broken through a little bit on soy diesel, I say to
my friend from North Carolina, because last week--I didn't see this,
but I heard about it--on ``West Wing'' the television show ``West
Wing'' that has to do with the President, I guess the President in
``West Wing'' was taking a trip to Cedar Rapids, IA. He said to his
staff: Are we going to get picked up by one of those diesels running on
soybeans?

So we are making a breakthrough. People are now beginning to pay
attention that buses can run on soybeans. It is all biodegradable.
We have an energy title in this bill to try to start moving in that
direction, $550 million, half a billion dollars in 5 years--I hope we
can keep it--again, to begin to develop that, whether it is diesel or
hydraulic fluids, grease, or ethanol. We haven't even scratched the
surface on ethanol use in this country. We can do a lot more with
ethanol, and the feed co-products can be used in feedlots.
Biomass energy--we have a project in Iowa right now that we started a
few years ago. I was able to get a modest change in the law to allow
biomass production on conservation reserve program land, we set aside
4,000 acres in southern Iowa to grow switch grass. That switch grass is
cut and then it is taken over to the Ottumwa, IA, coal-fired powerplant
and put right in there with the coal to burn at the powerplant.
See, a pound of switch grass has more Btus than a pound of coal. The
problem is, a pound of switch grass is this big, and a pound of coal is
that big. But they burned it last year in the boiler. It worked just
fine. So now John Deere is working on developing new kinds of equipment
that will cut the switch grass and put it in little bundles so it will
make it easier to transport and put in the furnaces. Biomass energy,
renewable every year. It will cleanup the environment and give farmers
some additional source of income.
Wind energy--the largest wind farm in the world is located in Iowa.
Interestingly enough, it was built by Enron. But it is there. So there
are provisions in our bill--we have an energy title in our bill to
begin to promote that and give a new market for farm products.
That is what we have to do. We have to find new markets for what
these farmers grow. One of the biggest markets out there--a huge market
that can absorb a lot of our commodities--is the energy market. So why
should we be paying all this money to Saudi Arabia and the Mideast or
go up and drill in the Arctic National Wildlife Refuge, when we have it
right here on our lands. So that is another part of the bill that
begins to move us in some different directions.
We have a strong rural development program in this bill to provide
for broadband access to our small towns and communities. Those are
things that will help bring jobs to smaller towns in rural America.
All in all, what I am trying to say is in this bill we tried to
balance a lot of things. I say to my friend from Indiana, if I were a
dictator, would I have written a different bill? I probably would. He
would have, too. But we have a lot of interests here that we have to
try to balance.
All in all, I believe the bill is a balanced bill and it will support
farm income with countercyclical payments. That is another new
provision in this bill, a countercyclical program. When prices go down,
we support farm income. We don't let farm income go below a certain
level. Then we have direct payments also, which we hope will phase out,
phase down, and bring in the countercyclical. That was the problem with
Freedom to Farm. They were phasing down the direct payments, but they
never replaced them with anything, so every year we would come in and
appropriate new money. In our bill, if prices fall, the countercyclical
payments would kick in.
So I will oppose the amendment of my friend only because of that
reason. I think to make that big of a change right now could really
disrupt a lot of rural America. I say to my friend, I think sometimes--
what is that old saying?--when you are up to your eyeballs in
alligators, it is hard to remember who forgot to drain the swamp. You
just want to get out of there.
Maybe it is a little hard to think about how did we get in this mess.
We are faced with a situation where we have to save our farms and rural
America, and that is what we are attempting to do in this bill. I hope,
working together this year, next year, and in the ensuing years, we can
begin to examine some other changes that we might make in the structure
of agricultural programs, with the goal being, I hope, continuing to
provide abundant food and fiber to our people at a reasonable price but
also with the goal of enlivening and rebuilding rural America. In every
poll I have ever seen, when people are asked if they would rather live
in a large city or a smaller community, all other things being equal,
overwhelmingly people would rather live in the smaller community. But
if you do not have good schools, decent jobs, decent recreation, and
decent transportation, then things aren't equal. So people tend to
gravitate towards larger communities.

I hope our view for the future is of enlivening and rebuilding rural
America, and enabling younger people to go into farming. We have some
of the finest agricultural schools in America--including those in
Indiana and Iowa. When you go to those agricultural schools, you see
young people who are smart. They know how to do things. A lot of them
have experience working on

[[Page S464]]

the farms--maybe their family farms, or lives in a rural area. They are
taking animal or plant science courses, or farm management courses. Ask
any one of them if they are going to go into farming, and if they are
going to be a farmer--only a very few, if they have parents with a farm
free and clear that they hope to inherit--will they say yes. But if
their parents have a little bit of land and they are renting more land,
they are not going to be farmers. They are going to go into some kind
of management, or some kind of agribusiness management. But they are
not going to be a farmer.
Ask them if they want to be a farmer. Would you like to be a farmer?
Would you like to have land out there and do the things your parents
and grandparents did? Almost 100 percent say yes. But the decks are
stacked against them.
I hope that is what we can look at as to how to revise and rebuild
some of these farm programs in the future.
I listened to the distinguished Senator from Indiana, my good friend.
He went through his long dissertation on his amendment. I thought it
was very thoughtful. As I say, there are a lot of things on which I
agree with him. But I just do not think this is the time to do that. I
think we ought to be thinking about how to change some of these things.
But, as usual, my friend from Indiana is very thoughtful and provokes
our thinking. In that way, I think this adds to this debate. But I hope
that all in all we will not approve of the amendment.
I yield the floor.
The PRESIDING OFFICER. The Senator from Indiana.
Mr. LUGAR. Mr. President, I thank the distinguished chairman for his
generous comments about my work and about my amendment, even though he
has risen in opposition.
Let me try to offer a word of assurance to the Senator as to the
implications because it is certainly not my purpose to try to bring
land values down or banking crises.
I make this point once again citing from the Environmental Working
Group Web site because it has very detailed figures on how much money
people get now.
For example, in my home State of Indiana, during the 1996-2000
period, 76,000 farmers out of the 100,000 who received money received
less than $5,000. By definition, under this program, if they have
$20,000 of income--that is the threshold--they are going to get $7,000.
As you reach into the next bracket of $1,000 to $10,000, if you take
half of those, we are up to 82 percent who are going to do better and
18 percent will not do so well.
The fact is, if there are to be changes profoundly useful to four-
fifths of my farmers, the other one-fifth might say they can't count on
this subsidy. Indiana is not as skewed as many States are with abnormal
payments, as I cited in the last debate. Only six farmers in Indiana
would be affected by the $275,000 limit--not more than that. But out of
100,000, we affected six farmers.
We are talking, it seems to me, in ranges that are not as cataclysmic
as they may seem, but they do benefit three-quarters to four-fifths of
the farmers of my State. The farmers I hear the most from are the other
fifth. That may be true of the distinguished Senator from Iowa.
Understandably, they are more aggressive, more articulate, and they
have greater resources. If fact, their influence with the major farm
groups seems to be substantially greater than the other three-quarters
or four-fifths of my farmers.
But, nonetheless, for Senators who are trying to decide what kind of
jarring change this makes, I think it makes a sizable change for a
large majority of farmers. Others would have to accommodate to the fact
that they are already more successful, and the safety net was not meant
for them specifically.
Let me also mention that although I admit to the fact that all the
money we are talking about is in deficit finance, I still indicated
that I am prepared to advocate spending money. I would say that the
farm bill--I may have left some confusion, and I want to clarify this--
I am in favor of. That would include all the titles the chairman talked
about, plus the commodity title comes out to $25 billion in my
amendment for 5 years at a time. The commodity portion of that turns
out to be a net increase of only $7 billion. That is true because we
are phasing out a whole raft of programs but not adopting many programs
that are in the Daschle-Harkin bill escalating the current baseline.
It is a fair question to always ask. Even if on paper the economics
and the equities are right, what sort of jarring effect does this have
on society? Probably there are people who want to walk around this a
bit. Of course, that is the purpose of their debate: to define what we
have to try to find. At least something is likely to be better not only
for farmers--I think this amendment is better for three-quarters of the
farmers--but also for taxpayers and for the general fiscal condition of
the country. We are in a war and recession.
I would simply ameliorate the associations made that this is likely
to cause very jarring changes. I think there will be changes, but I
think they are constructive. Essentially, we move the money in a safety
net to a large majority of farmers, those whom I think are probably
most in need and are most likely to go out of farming, as a matter of
fact, without some type of subsidy.

The distinguished chairman and I have generally agreed--and we had
witnesses before the committee--that there is some equity at least in
paying these moneys only if somebody is actually farming. That is one
provision. In order to receive the $7,000, you have to produce $20,000
of gross income from the farming operation. You can't drop out for 2 or
3 years and on the basis of past history continue to collect the money.
I am not going to argue about the philosophy of the AMTA payments and
the idea that those would be phased out from one type of farm
philosophy to another. It may not have worked out that way. But that
was the general idea. I am not talking about a phaseout, but the idea
that you really need to farm and be a productive farmer at risk in a
farm entity to collect the money.
I think that makes more sense to the American people as opposed to
the many stories of moneys going to persons who have been out of the
farming business for some time but had a history that fits these last
farmers.
Mr. President, I yield the floor.
Mr. HARKIN. Mr. President, if I may respond to my friend, I
understand what he is saying. Only a fifth of the farms in Indiana
would be affected by this. It is probably about the same, I suppose, in
Iowa. I do not know. But I still see that, again, these tend to be the
bigger farms that have a lot of land. I still submit this could cause
some derogation in the land values, and even though those at the bottom
are getting a little bit more, their land prices might be affected by
the bigger ones. So if those land prices go down, I think it might have
a cascading effect on this.

I say to my friend--I think we discussed this in the past--some land
prices may be inflated by farm programs, but if the support has to be
brought down, I think it has to be brought down over maybe a several
year period of time, or something such as that. That is why I was
hoping to get away from some kind of direct payment system to a
countercyclical payment that is only based on prices at the time and to
put more into conservation, put more into energy, and put more into
programs that require producers to act.
If there is something you have to do, then you can get paid for it,
but it does not build into the land value. Because if you sell it to
somebody else, and they do not do it, they do not get the payment. We
have to try to get off the programs that continue to provide for an
artificial land bubble out there--it is there; we have to recognize
it--but I would be very careful about how we try to bring it down to
some level in regard to what the productive capacity of that land is.
The PRESIDING OFFICER. The Senator from Indiana.
Mr. LUGAR. Mr. President, I appreciate this colloquy with the
distinguished Senator because I think we are probably dealing with
values and issues which are very important even in the midst of an
empty Chamber. I am hopeful other colleagues are listening in from time
to time to this dialog.
The dilemma we face, it seems to me, is not that the land values are
going to

[[Page S465]]

come down, but rather that farmers will now have to plant for actual
markets as opposed to planting for the Government. I think the prices,
in fact, have some chance, under my idea, of going up again, in large
part because I believe the policies we might adopt in the Daschle-
Harkin bill are likely to depress prices. The hope is that will not be
so and maybe world conditions or weather conditions, or something,
might change. But it seems to me there is a history of stimulating
overproduction and lower prices. That affects big farmers as well as
small farmers.
As I take a look at my own operation, we are somewhere in between. I
sort of fit into the group that, according to the Environmental Working
Group, would get about $9,000 a year under the current situation. I
think the Web site lists the Lugar farm as 22nd in the batting order in
Marion County, but that is in the Indianapolis area where there are
just 240-some farms involved. But it is roughly $9,000 a year over a 5-
year period of time we are talking about. It is a 604-acre farm,
probably in the top sixth barely of the size of farms in the State.
This is sort of the cutting edge when I am talking about the
beneficiaries being maybe 80 percent. We are a little above that, and
so, as a result, we are likely to lose a little money.
My own view is that I am likely to make money because I think that
probably the price of corn is more likely to go up, likewise the price
of soybeans; therefore, in regular markets, as opposed to markets that
are subsidized or have artificial stimulants in them, I am going to
make more money. I think that will sustain my land value without a
bubble and will make that price a healthier one. Of course, there are
other factors in land values: proximity to cities, whether highways go
through them, as the chairman knows--all sorts of reasons why that
happens. But, nevertheless, our two States--Iowa and Indiana--have many
characteristics. During my more intense experiences in Iowa in 1995 and
1996, I discovered that going county by county.

I am sympathetic to the thought that change which is really
ridiculous ought not to be entertained. It seems to me we are at a
point where the idea that I have brought forward benefits a very large
majority of farmers, and I think without harm to those who are more
efficient because my guess is they will benefit the most from higher
prices. They, by and large, have lower costs through research and
through the methods they have adopted. This is likely to lead to more
of a golden age for agriculture than what might be sort of a descending
situation that many of us have been describing.
Mr. HARKIN. If my friend would yield for a little colloquy, I just
ask my colleague again if he will elaborate a little longer on why the
prices would tend to go up under the scenario he just described. I
would think they would go down. But why does the Senator think the
prices will go up?
Mr. LUGAR. My theory is that less will be planted; fewer acres of
corn will be planted and fewer acres of soybeans will be planted.
I believe the current system, plus the additions that your bill would
provide, offer incentives to plant more acres. I believe, given new,
modern methods, and the research that we are both for, that is going to
lead to higher yields--besides more acres--more bushels, and lower
prices. That could change if we had a worldwide boom and our exporting
thing works or El Nino knocked out half of one country's production. So
these things happen from time to time.
My guess is, to answer the Senator truthfully, many farmers, despite
the Freedom to Farm, still have incentives to do basic row crops. That
is where the money is.
Mr. HARKIN. I say to my friend from Indiana, I believe what he is
saying is that farmers will get market signals. In other words, they
are out there, and if the price goes down, they will plant less. So
then you have a drop in prices, and farmers will plant less, and then
the price will go back up. I assume that is what the Senator is saying.
Mr. LUGAR. Yes. For example, on my farm, we know that a bushel of
soybeans is going to get about $5.43 no matter what the market price
is. People lament that beans have been down close to $4 a bushel.
Indeed, they are, but not for our farm, or for anybody else who really
is involved in the farm program involving soybeans. So I want to
maximize production irrelevant to whatever the market signals are
because I know for every bushel of those beans I am going to get the
$5.43.
This is the way the world works. This is one reason why soybean
production has been booming while prices have been falling. It need not
always be the case. If there were no such loan, if I were not
guaranteed the $5.43, then I really would have to be thoughtful about
how many acres of soybeans I would plant. I would really have to begin
to calculate how the world works in terms of markets as opposed to
Government programs.
Mr. HARKIN. I ask my friend: OK, if you are not going to plant that,
what would the Senator plant? You have land. You have fixed costs.

Mr. LUGAR. Yes. I would have to find an alternative crop that looked
better for me. For the moment, my guess is that I would probably go to
more corn, just as a practical matter. Corn is not so heavily
subsidized. The $1.89 I am guaranteed is not as attractive as the $5.40
for the other situation. On the other hand, other farmers have
calculated that, too. So they have planted less corn, not added more
beans. They all might shift back, so it makes agriculture interesting.
Mr. HARKIN. That is the concern I have.
Mr. LUGAR. Yes.
Mr. HARKIN. In a system such as that, my concern is the boom-and-bust
cycle: Prices go all to heck for soybeans. So farmers say: OK, we are
not going to plant soybeans. We are going to go to corn. So the price
of soybeans booms up and then the price of corn goes down, and then
they jump out of that and, say, get back into beans again. So you get
these huge fluctuations.
Mr. LUGAR. Yes.
Mr. HARKIN. So we are trying to keep at least some stability in there
so you do not have those wild swings in prices.
Mr. LUGAR. I will make another radical suggestion. This is purely
anecdotal from our farm experience. But I planted, over the last 18
years, 60 acres of black walnut trees. This is on acreage that I found
was submarginal. We used to plant more, but it appears that sort of is
a grandfather's dream. I will not be there.
But you have, at least it seems to me--by all the calculations by the
foresters who measure the growth year by year--more of a return from
the walnut trees than I am getting from the corn. That is a very long-
range vision.
Mr. HARKIN. Sometime down the road.
Mr. LUGAR. Yes. You asked for alternatives. Clearly, there are a good
number of people who are family farmers who intend or at least hope
that their farms will be family farms for a long time. They are doing
alternative planning.
Mr. HARKIN. I agree, to the extent there are alternatives people can
use. Obviously, though, as the Senator has said, the return you get off
that is sometime down the road, not right now.
And I think, just again, being a little bit parochial about it, in
our area of the country, in the upper Midwest, there is a reason why we
plant corn and beans.
It is very suitable for that. There is some wheat, a little bit, some
smaller grains, maybe up in Minnesota, the northern part up there, but
in our area we are corn and beans. We plant those crops because that is
what the land is productive for in that area of the country. It is very
hard. We don't grow rice. Wheat is OK. We can get wheat, but that will
just depress the price of wheat. We could grow wheat. But there is just
not much else.
When I was a kid--I am sure for the Senator as well--we had orchards.
We had a lot of orchards, vegetable gardens, a short growing season. It
was OK for the family, but to really make a living out of it wasn't too
viable. So we are sort of stuck on corn, beans, maybe alfalfa, some
hay, things like that, some sorghum--basically corn and beans. And then
you have all your land tied up. You have your land and then your
machinery, your equipment. You have all that fixed cost already there.
I have a big combine. I put a lot of money in it, and it doesn't do
much to plant black walnut trees. I can't get much money out of that to
do that.

[[Page S466]]

I ask the Senator to think about something that was said to me at one
time. I don't know if it is true, but it made sense to me
economically--why agricultural economics is a little bit different.
The farmer is sitting out there--think about your own land--the
farmer is sitting out there, fixed land, has his equipment. Let's just
take the farmer who doesn't have all the land paid for, may own some,
and rent some. That is usually the case. He has equipment, some paid
for, probably some he is still paying for. If the price of the
commodity he is growing--let's say in this case corn or beans--goes
down, the normal thought process is, other people would say, if the
price goes down, the farmer would be a darn fool to plant any more of
that.
But the farmer goes out and plants more corn. Is he a darn fool? My
response is, no. Because what he is thinking is: OK, I have my land out
there. I have my equipment. I have all those fixed costs. The marginal
cost of planting an additional acre always approaches zero. He doesn't
know that, but that is what it is. So if I plant 100 acres, my cost may
be whatever. If I add an additional 10 acres, the cost to plant that
additional 10 acres is not as much as the first 100. If I plant an
additional acre on the side of that, its cost is even less because I
already have my equipment and all that stuff. The time involved is not
that much.
The farmer says: I have all that equipment. So if the price is down,
I have to produce more. So if I was getting $2.50 for my corn, and now
I am getting $1.80, I will just grow more corn.
So it really is a perverse economic kind of thing, sort of counter
intuitive--I ask my friend from Indiana if that might not be the case--
because farmers don't have control over everything. If I controlled
everything, like General Motors, I could say, yes, I will cut down
production. But each individual farmer out there with that fixed land,
the equipment, his costs, his sunk costs, he says: If prices are down,
I had better grow more.
Does the Senator from Indiana have some sense that that happens
sometimes?
Mr. LUGAR. I would respond to my friend that that probably frequently
happens. Probably a majority of farmers will continue to plant about
what they are doing now. What I am discussing really is at the margins,
that overproduction has seemingly continued and maybe accelerated as
the farm bill has progressed--not just the one we are in but the one
before that. The control factor is something that the Senator and I
have considered during our work on the Agriculture Committee with the
crop insurance innovations.

For example, this gives the farmer a lot of control. I would say in
my own situation, I purchased the 85 percent crop revenue insurance
this year. Before I planted, I knew I was going to get 85 percent of
the income from my beans and corn of the last 5 years or the average
period that was a part of the premium I paid. That is a lot of
assurance. Then I can go more aggressively into the futures market,
sell corn that I don't even have in the ground, or not planted it in
the event that it appears to me circumstances are adverse.
Farmers in the past didn't have those sorts of options. Some are not
taking advantage of them now. Nothing in this amendment affects the
crop insurance situation, which remains a very important part of this
management of risk and control that we now have.
Mr. HARKIN. I understand. The Senator is right. His amendment doesn't
touch crop insurance. I understand that. I am concerned about this idea
that somehow farmers will get these market signals and they will plant
accordingly. I still think there has to be a role for the big bad
government to play through the Department of Agriculture, through us
here in the Senate and House, to help to try to stabilize it somewhat,
and to provide for some constancy out there in terms of what to expect
in terms of price supports.
I guess it is my own personal belief, based upon my studies and being
here for a long time and looking at what has happened to agriculture,
we could get into a period where we have some violent swings. Then I
think we might be in a situation where we would find--I am loath to say
this to my friend from Indiana because it always sounds as if we are
doing the bad foreign baiting type of thing--if we don't do this, the
foreigners will do it.
I don't necessarily buy that, but to a certain extent I think we get
into a situation where we have those fluctuations like that. We might
encourage more of our competitors around the world to be growing these
crops and maybe taking some of their marginal lands out of production
in growing crops, which I don't think would be good for the environment
or anything else. I wonder about that also.
Again, as I said, those are just the concerns I have with the
amendment of the Senator in terms of land prices and violent swings in
commodity prices. And perhaps we just have a different philosophy on
what the role should be. I believe there should be a role for the
Government to try to keep wild swings from happening and prop up these
prices a little bit in the marketplace. I don't want to provide the
ultimate security, but some security out there, to say, it will go
down, but it is not going to go any lower than this.
Mr. LUGAR. The chairman and I have been in entire agreement that we
ought to be devoting more of our resources in this bill to research, to
agricultural community development--really the bulk of the rural people
are not farmers who are going to benefit.
Mr. HARKIN. That is true.
Mr. LUGAR. The educational process for the young, as well as loans,
and this important energy research. Clearly, if our country adopted an
energy policy that featured the biomass, the ethanol, or other products
that come from that, we would have a different farm scene. I pray that
will occur, as does the Senator. But it won't, really, without a great
deal of effort on our part.

These are hopeful signs for the future. I think we both agree, we
don't want to bump up against the WTO ceilings because that really
would jeopardize our export position. And I have offered a prudent step
that takes us way back from that apparently. I have a lot of government
still here: $7,000 for maybe 1.3 million entities is a lot of
government but, at the same time, a level that I think will not
perversely accelerate the land value, overproduction, and really
finally does cost a lot less money at a time that we are in deficit
finance.
I appreciate the Senator's thoughtful objections to this, but I
persist nonetheless and ask for support of the amendment.
The PRESIDING OFFICER. Who yields time?
Mr. LUGAR. Mr. President, I suggest the absence of a quorum with the
time evenly divided. How much time remains on both sides, if I may
inquire?
The PRESIDING OFFICER. The Senator from Indiana has 2 minutes 8
seconds; the Senator from Iowa controls 14 minutes 26 seconds.
Mr. LUGAR. I thank the Chair.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative 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 say to my friend from Indiana, I want to
be honest, so for the record, according to my staff who did this
research, about two-thirds of those receiving payments in Iowa get less
than $7,000. The Senator's is one-fifth? Ours is one-third.
Mr. LUGAR. At least three-quarters receiving less than $7,000.
Mr. HARKIN. We have about 160,000 farmers or entities receiving
payments. Iowa farmers who get more than $7,000 are about 55,000 out of
that 160,000--that is about a third--farmers getting less than $7,000,
105,000; farmers getting more than $15,000 are just under 30,000; and
farmers getting less than $15,000, fewer than 130,000. It would be
105,000 farmers getting less than $7,000, and about 55,000 would be
getting more than that.
The PRESIDING OFFICER (Mr. Carper). The Senator from Nevada.
Mr. REID. Mr. President, I have determined from conversing with the
two managers of the bill that they are going to yield back their time
on this amendment. That being the case, I ask unanimous consent that
the time be considered yielded back and that following 5 minutes for
the Senator from

[[Page S467]]

New Jersey on an unrelated matter, the Senate begin voting on the Lugar
amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from New Jersey.
(The remarks of Mr. Torricelli are printed in today's Record under
``Morning Business.'')

The PRESIDING OFFICER. The question is on agreeing to the Lugar
amendment No. 2827.
Mr. HARKIN. I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The clerk will call the roll.
The legislative clerk called the roll.
Mr. NICKLES. I announce that the Senator from Texas (Mr. Gramm), the
Senator from Tennessee (Mr. Thompson), the Senator from Arizona (Mr.
McCain), and the Senator from New Mexico (Mr. Domenici) are necessarily
absent.
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 11, nays 85, as follows:

[Rollcall Vote No. 19 Leg.]

YEAS--11

Chafee
Collins
Corzine
Ensign
Gregg
Kyl
Lugar
Murkowski
Santorum
Smith (NH)
Voinovich

NAYS--85

Akaka
Allard
Allen
Baucus
Bayh
Bennett
Biden
Bingaman
Bond
Boxer
Breaux
Brownback
Bunning
Burns
Byrd
Campbell
Cantwell
Carnahan
Carper
Cleland
Clinton
Cochran
Conrad
Craig
Crapo
Daschle
Dayton
DeWine
Dodd
Dorgan
Durbin
Edwards
Enzi
Feingold
Feinstein
Fitzgerald
Frist
Graham
Grassley
Hagel
Harkin
Hatch
Helms
Hollings
Hutchinson
Hutchison
Inhofe
Inouye
Jeffords
Johnson
Kennedy
Kerry
Kohl
Landrieu
Leahy
Levin
Lieberman
Lincoln
Lott
McConnell
Mikulski
Miller
Murray
Nelson (FL)
Nelson (NE)
Nickles
Reed
Reid
Roberts
Rockefeller
Sarbanes
Schumer
Sessions
Shelby
Smith (OR)
Snowe
Specter
Stabenow
Stevens
Thomas
Thurmond
Torricelli
Warner
Wellstone
Wyden

NOT VOTING--4

Domenici
Gramm
McCain
Thompson
The amendment (No. 2827) was rejected.
Mr. HARKIN. Mr. President, I move to reconsider the vote.
Mr. LUGAR. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. HARKIN. Mr. President, 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. HELMS. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Johnson). Without objection, it is so
ordered.

____________________