[Congressional Record Volume 148, Number 10 (Friday, February 8, 2002)]
[Senate]
[Pages S513-S525]
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 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.
       Crapo/Craig amendment No. 2533 (to amendment No. 2471), to 
     strike the water conservation program.
       Craig amendment No. 2835 (to amendment No. 2471), to 
     provide for a study of a proposal to prohibit certain packers 
     from owning, feeding, or controlling livestock.


                           Amendment No. 2836

  The ACTING PRESIDENT pro tempore. The Senator from North Dakota.
  Mr. CONRAD. Madam President, I send an amendment to the desk.
  The ACTING PRESIDENT pro tempore. Without objection, the pending 
amendments will be set aside. The clerk will report.
  The legislative clerk read as follows:

       The Senator from North Dakota [Mr. Conrad], for himself and 
     Mr. Crapo, proposes an amendment numbered 2836.


[[Page S514]]


  Mr. CONRAD. Madam President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  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. CONRAD. Madam President, I am pleased to offer this amendment on 
behalf of myself and the Senator from Idaho, Mr. Crapo.
  The purpose of this amendment is to provide a predictable, 
transparent, and equitable formula for the Department of Agriculture to 
use in establishing beet sugar marketing allotments in the future. This 
is an amendment that enjoys widespread support within the sugar beet 
industry. Producers in that industry recall, as I do, the very 
difficult and contentious period just a few years ago when the 
Department of Agriculture last attempted to establish beet sugar 
allotments with very little direction in the law.
  That experience left us all believing that there must be a better 
way, that we should seek a method for establishing allotments that is 
fair and open and provides some certainty and predictability to the 
industry. On that basis, I urged members of the industry to work 
together to see if they could agree on a reasonable formula.
  I am pleased to say the amendment I am offering today with the 
Senator from Idaho reflects producers' efforts to forge that consensus. 
It provides that any future allotments will be based on each 
processor's weighted-average production during the years 1998 through 
2000, with authority for the Secretary of Agriculture to make 
adjustments in the formula if an individual processor experienced 
disaster-related losses during that period or opened or closed a 
processing facility or increased processing capacity through improved 
technology to extract more sugar from beets.
  In addition, the formula allows for adjustments in the reallocation 
of beet sugar allotments to account for such industry events as the 
permanent termination of operations by a processor, the sale of a 
processor's assets to another processor, the entry of new processors, 
and so on.
  Taken together, these provisions offer the predictability, fairness, 
and transparency we all agree is much needed in the sugar beet 
industry.
  I should emphasize that this amendment applies only to producers of 
beet sugar. It is not in any way directed at producers of cane sugar.
  Again, I thank Senator Crapo for his work in support of the 
amendment. I urge its adoption.
  I would be remiss if I did not also thank the industry. This was not 
easy for them to do. As one who was centrally involved in 1995, when we 
last faced this problem, I can tell the Senate, this is a better way of 
dealing with the problem. Instead of waiting for the problem to develop 
and then having a chaotic situation on our hands when there was no 
formula, no agreement, this provides the means of a reasonable and fair 
distribution of allocation in the future.
  I thank the Chair and yield the floor.
  Mr. LUGAR. Madam President, I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. WELLSTONE. Madam President, I ask unanimous consent that the 
order for the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  The Senator from Minnesota.


                           AMENDMENT NO. 2835

  Mr. WELLSTONE. Madam President, my understanding is there is an 
amendment that my colleague from Idaho has introduced, or will 
introduce--my understanding is he has introduced it--which deals with a 
ban on packer ownership, an amendment which was passed by this body on 
December 13. This was a Johnson/Grassley/Wellstone bipartisan 
amendment. It had the support of the Senator from Wyoming, Mr. Thomas, 
as well.
  My understanding is my colleague Senator Harkin will soon do a 
second-degree amendment to the Craig amendment. I was concerned I may 
not be present when that happens, so I wanted to speak about this.
  What the Craig amendment would do is nullify this packer ownership 
amendment and replace it with a study. The intent of this packer 
ownership amendment is clear. It restricts the major meatpacking firms 
from owning livestock in a 14-day period before taking livestock to 
slaughter. What we are talking about is a a tactic used by some 
packers. It is really their own form of supply management to reduce 
competition. This is an amendment intended to increase competition and 
the bargaining power of the independent producers.
  This amendment has the support of the Nation's two largest farm and 
ranch organizations: the National Farmers Union and the Farm Bureau 
Federation. They have both expressed strong support for a ban on packer 
ownership of livestock, as have many other agricultural organizations 
across the country.
  The meatpacking industry is busily working the Halls of the Congress 
to kill our amendment because, unfortunately, some of these firms want 
to give preference to their own livestock so they do not have to pay 
the farmers and the ranchers a fair price. What they do is they buy 
when prices are low, and then when prices start to go up for the 
independent livestock producers, they dump on the market to keep prices 
down. They are like a cartel.
  A lot of the independent livestock producers in Minnesota and the 
country are sick and tired of these conglomerates muscling their way to 
the dinner table and using their raw economic and political power to 
push the independent producers out of existence. As a matter of fact, a 
lot of taxpayers are sick of it as well. That is why this amendment, 
which puts some limit on payments, passed yesterday. It was a very 
important reform amendment.
  Some of these packers have even taken out attack ads against some of 
us who have supported this amendment. There is a dramatic attack ad by 
Smithfield in South Dakota--I am listed with Senator Grassley, but it 
is aimed at Senator Johnson--where they basically say if this amendment 
stays in, they are not going to do any more investment in South Dakota 
or hint that they are even going to leave. I do not know whether one 
calls that blackmail or whitemail or threat of capital strike. I am not 
sure.
  The major question surrounding the intent of our amendment concerns 
the meaning of the word ``control'' and whether the inclusion of that 
word in our language prohibits forward contracts or contractural 
marketing arrangements. While all the sponsors of this amendment have 
made it clear that the word ``control'' in the context of the ownership 
restriction does not prohibit such arrangements, Senator Harkin's 
amendment today should leave no doubt. The amendment of the Senator 
from Iowa makes clear that forward contracts and other marketing 
arrangements do not give a packer operational control of the production 
process and makes it crystal clear what control is all about. We are 
not saying you cannot have contractual arrangements with other 
producers. We are talking about direct ownership.
  I will discuss again the ``why'' of this amendment that passed in 
December. I have been having fun with this debate because it is serious 
but you have to have a twinkle in your eye. I believe the battleground 
is to call for more free enterprise in the free enterprise system. I am 
the conservative here calling for more competition in the food 
industry; the independent livestock producers want a fair shake. The 
packers have their own style of supply management. Again, they act as a 
cartel and jack the independent producers around. They buy when prices 
are low. When prices go up, they dump on the market to keep prices low. 
It is simply unacceptable.
  We have had formal agriculture committee hearings in the State of 
Minnesota. This has been an issue for a number of years. Usually the 
processors with all of their power win the debate. Yesterday's vote in 
the Senate says, when it comes to income support in government 
payments, there have to be payment limitations. We are tired of it 
being in such inverse relation to need. That was a reform vote.
  Country-of-origin labeling was a reform vote. The environmental 
credits in this bill that Senator Harkin has

[[Page S515]]

worked on is a reform vote. A strong energy section in this bill is a 
reform vote. Rural economic development is a reform vote. Getting the 
loan rate up, at least somewhat, is a reform vote. And this is a reform 
vote.
  I join my colleague, Senator Harkin, who will be introducing the 
second-degree amendment. I say to all Senators, this is a blatant 
effort on the part of these big packers, of these big processors, to go 
after the independent producers. They always think, because they have 
so much economic power and political power, that they will win these 
votes.
  I like my colleague from Idaho. It is my nature to like people. With 
all due respect, the amendment of the Senator from Idaho does not 
represent a step forward; it represents a great leap sideways.
  The independent producers are being squeezed out of existence. These 
big conglomerates are not interested in a study. They are interested in 
whether or not we are on their side. As a Senator from Minnesota, I can 
say with a great deal of good feeling and glee that I am on the side of 
the independent producers. I am on the side of our family farmers. I am 
not on the side of these big packers and these big conglomerates. They 
will not be able to muscle their way to the dinner table and push 
family farmers out of existence. They will not be able to muscle their 
way to the floor of the Senate to try to reverse a vote. We are not 
going to let them do it.
  Mr. HARKIN. Will the Senator yield?
  Mr. WELLSTONE. I yield.
  The PRESIDING OFFICER (Mr. Miller). The Senator from Iowa.
  Mr. HARKIN. I am pleased the Senator is pointing out what is 
happening. I specifically thank the Senator for pointing out the ad run 
in the Sioux Falls Argus Leader Editor, newspaper on Sunday, February 
3. This is a paid advertisement, quite a big ad from Smithfield Foods, 
signed by Joseph Luter III, chairman and chief executive officer of 
Smithfield Foods. It is quite a lengthy ad. They are going after 
Senator Johnson for offering this amendment. I guess they are angry 
that his amendment passed.
  In line with what the Senator from Minnesota said, this smacks of a 
powerful firm trying to use its economic power to blackmail. I have not 
seen in recent times a more blatant example of that than this ad put 
out by Smithfield Foods and Joseph Luter III. But let me read the last 
paragraph:

       If the Johnson Amendment becomes law, Smithfield Foods will 
     neither rebuild the Sioux Falls plant, or build a new plant 
     in South Dakota, nor will we make any further investment in 
     South Dakota, or for that matter in any other state whose 
     public officials are hostile to our ongoing operations and 
     our industry.

  Signed by Joseph Luter.
  Now, that is economic blackmail.
  We have more concentration in the meatpacking industry today than we 
had 100 years ago when this Congress began to break up the packers; 
they had too much economic power, too much concentration. We have more 
today than we did then.
  This is economic blackmail. They are saying they will not do anything 
``in any State whose public officials are hostile to our ongoing 
operations and our industry.''
  Well, they have plants in Iowa, too. But I can tell you that I am not 
hostile to their industry. We need the meatpacking industry in this 
country. We would like to have another meatpacking plant in the State 
of Iowa, in fact. However, what we do not want to see is the vertical 
integration where the packers own the livestock and they are able to 
dictate to a farmer what that price will be for the cattle. It used to 
be in my State a cattleman would get, two, three, or four bids for his 
livestock. Now, with this kind of economic concentration, what happens 
is a packer goes out and says, this is what I will pay you. Take it or 
leave it. If they leave it, the packer says, that is all right, I have 
enough cattle of my own; I don't need your cattle. I have a captive 
supply.
  That is what happens. They drive more and more of our cattlemen out 
of business. I am upset at some of the entities that are supporting 
this position, saying the packers should own this livestock.
  This amendment is very simple. It says that the packers, prior to 14 
days, cannot engage in ownership or control. As the Senator said, we 
will shortly have a second-degree amendment to the Craig amendment 
which undoes that, to specifically point out what control is and is not 
so it would not prohibit, for example, forward contracting. If they are 
hung up on the word ``control,'' we have an amendment that Senator 
Grassley and I are working together on to make crystal clear what we 
mean so there will not be any ambiguity. I don't think there is in the 
present one, but we will make it even clearer.
  I say to my friend from Minnesota, we ought to get even more votes 
now because of this kind of economic blackmail.
  Mr. WELLSTONE. I ask my colleague if he will yield for a question. I 
say to my colleague from Pennsylvania, it won't be a 2-hour colloquy; 
maybe an hour and 50 minutes but not 2 hours. I say to the Senator from 
Iowa, I saw this last paragraph, too. It is worth reading again.

       If the Johnson Amendment becomes law, Smithfield Foods will 
     neither rebuild the Sioux Falls plant, or build a new plant 
     in South Dakota, nor will we make further investment in South 
     Dakota, or for that matter in any other state whose public 
     officials are hostile to our ongoing operations and our 
     industry.

  Earlier I was lucky enough--I don't consider it the price you pay. I 
think it is a privilege you earn, to be in small print. It says 
``Johnson-Grassley-Wellstone,'' so I get included in this. But this is 
aimed at Senator Johnson.
  This is like threatening a capital strike. That is what this is all 
about. This is absolutely unbelievable. I say to colleagues, now that 
we are going to have your language--and I want to be included as an 
original cosponsor as to the second-degree amendment, which makes it 
crystal clear what control means--we should get an even stronger vote 
for our amendment. Every Senator ought to stand up to this kind of 
blatant blackmail or whitemail or threats.
  The processors and meatpacking companies in Minnesota have not 
engaged in these kinds of threats. But I tell you what, with all due 
respect for Smithfield, you are going to get fewer votes, Smithfield, 
because this is blatant. Everybody knows exactly what you are trying to 
do. You have a lot of power, you have a lot of muscle, you have been 
pushing a lot of our independent producers around for a long time, and 
we are now saying to you that you are not going to be able to do it in 
the same way. And you know what, you are not going to be able to push 
U.S. Senators around. We are going to get a strong vote for the second-
degree amendment.
  I yield the floor.
  Mr. LUGAR. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. SANTORUM. Mr. President, I ask unanimous consent the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                Amendment No. 2542 to Amendment No. 2471

  Mr. SANTORUM. Mr. President, I ask unanimous consent that the pending 
amendment be set aside and I call up amendment No. 2542.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will report.
  The assistant legislative clerk read as follows:

       The Senator from Pennsylvania [Mr. Santorum], for himself, 
     Mr. Durbin, Mr. Feingold, Mr. DeWine, Mr. Kohl, Mr. Hatch, 
     Mrs. Clinton, and Mr. Jeffords, proposes an amendment 
     numbered 2542 to Amendment No. 2471.

  Mr. SANTORUM. I ask unanimous consent the reading of the amendment be 
dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

   (Purpose: To improve the standards for the care and treatment of 
                            certain animals)

       On page 945, line 5, strike the period at the end and 
     insert a period and the following:

     SEC. 1024. IMPROVED STANDARDS FOR THE CARE AND TREATMENT OF 
                   CERTAIN ANIMALS.

       (a) Socialization Plan; Breeding Restrictions.--Section 
     13(a)(2) of the Animal Welfare Act (7 U.S.C. 2143(a)(2)) is 
     amended--
       (1) in subparagraph (A), by striking ``and'' at the end;

[[Page S516]]

       (2) in subparagraph (B), by striking the period at the end 
     and inserting a semicolon; and
       (3) by adding at the end the following:
       ``(C) for the socialization of dogs intended for sale as 
     pets with other dogs and people, through compliance with a 
     standard developed by the Secretary based on the 
     recommendations of animal welfare and behavior experts that--
       ``(i) prescribes a schedule of activities and other 
     requirements that dealers and inspectors shall use to ensure 
     adequate socialization; and
       ``(ii) identifies a set of behavioral measures that 
     inspectors shall use to evaluate adequate socialization; and
       ``(D) for addressing the initiation and frequency of 
     breeding of female dogs so that a female dog is not--
       ``(i) bred before the female dog has reached at least 1 
     year of age; and
       ``(ii) whelped more frequently than 3 times in any 24-month 
     period.''.
       (b) Suspension or Revocation of License, Civil Penalties, 
     Judicial Review, and Criminal Penalties.--Section 19 of the 
     Animal Welfare Act (7 U.S.C. 2149) is amended--
       (1) by striking ``Sec. 19. (a) If the Secretary'' and 
     inserting the following:

     ``SEC. 19. SUSPENSION OR REVOCATION OF LICENSE, CIVIL 
                   PENALTIES, JUDICIAL REVIEW, AND CRIMINAL 
                   PENALTIES.

       ``(a) Suspension or Revocation of License.--
       ``(1) In general.--If the Secretary'';
       (2) in subsection (a)--
       (A) in paragraph (1) (as designated by paragraph (1)), by 
     striking ``if such violation'' and all that follows and 
     inserting ``if the Secretary determines that 1 or more 
     violations have occurred.''; and
       (B) by adding at the end the following:
       ``(2) License revocation.--If the Secretary finds that any 
     person licensed as a dealer, exhibitor, or operator of an 
     auction sale subject to section 12, has committed a serious 
     violation (as determined by the Secretary) of any rule, 
     regulation, or standard governing the humane handling, 
     transportation, veterinary care, housing, breeding, 
     socialization, feeding, watering, or other humane treatment 
     of dogs under section 12 or 13 on 3 or more separate 
     inspections within any 8-year period, the Secretary shall--
       ``(A) suspend the license of the person for 21 days; and
       ``(B) after providing notice and a hearing not more than 30 
     days after the third violation is noted on an inspection 
     report, revoke the license of the person unless the Secretary 
     makes a written finding that--
       ``(i) the violations were minor and inadvertent;
       ``(ii) the violations did not pose a threat to the dogs; or
       ``(iii) revocation is inappropriate for other good 
     cause.'';
       (3) in subsection (b), by striking ``(b) Any dealer'' and 
     inserting ``(b) Civil Penalties.--Any dealer'';
       (4) in subsection (c), by striking ``(c) Any dealer'' and 
     inserting ``(c) Judicial Review.--Any dealer''; and
       (5) in subsection (d), by striking ``(d) Any dealer'' and 
     inserting ``(d) Criminal Penalties.--Any dealer''.
       (c) Regulations.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of Agriculture shall 
     promulgate such regulations as are necessary to carry out the 
     amendments made by this section, including development of the 
     standards required by the amendments made by subsection (a).


                   Modification to Amendment No. 2542

  Mr. SANTORUM. Mr. President, I now send amendment No. 2639 to the 
desk and ask my amendment be modified with the text of this amendment.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  The modification to amendment No. 2542 is as follows:

       Beginning on page 2, strike line 11 and all that follows 
     through page 4, line 21, and insert the following:
       ``(C) for the socialization of dogs intended for sale as 
     pets with other dogs and people, through compliance with a 
     standard developed by the Secretary based on the 
     recommendations of veterinarians and animal welfare and 
     behavior experts that--
       ``(i) identifies actions that dealers and inspectors shall 
     take to ensure adequate socialization; and
       ``(ii) identifies a set of behavioral measures that 
     inspectors shall use to evaluate adequate socialization; and
       ``(D) for addressing the initiation and frequency of 
     breeding of female dogs so that a female dog is not--
       ``(i) bred before the female dog has reached at least 1 
     year of age; and
       ``(ii) whelped more frequently than 3 times in any 24-month 
     period.''.
       (b) Suspension or Revocation of License, Civil Penalties, 
     Judicial Review, and Criminal Penalties.--Section 19 of the 
     Animal Welfare Act (7 U.S.C. 2149) is amended--
       (1) by striking ``Sec. 19. (a) If the Secretary'' and 
     inserting the following:

     ``SEC. 19. SUSPENSION OR REVOCATION OF LICENSE, CIVIL 
                   PENALTIES, JUDICIAL REVIEW, AND CRIMINAL 
                   PENALTIES.

       ``(a) Suspension or Revocation of License.--
       ``(1) In general.--If the Secretary'';
       (2) in subsection (a)--
       (A) in paragraph (1) (as designated by paragraph (1)), by 
     striking ``if such violation'' and all that follows and 
     inserting ``if the Secretary determines that 1 or more 
     violations have occurred.''; and
       (B) by adding at the end the following:
       ``(2) License revocation.--If the Secretary finds that any 
     person licensed as a dealer, exhibitor, or operator of an 
     auction sale subject to section 12, has committed a serious 
     violation (as determined by the Secretary) of any rule, 
     regulation, or standard governing the humane handling, 
     transportation, veterinary care, housing, breeding, 
     socialization, feeding, watering, or other humane treatment 
     of dogs under section 12 or 13 on 3 or more separate 
     inspections within any 8-year period, the Secretary shall--
       ``(A) suspend the license of the person for 21 days; and
       ``(B) after providing notice and a hearing not more than 30 
     days after the third violation is noted on an inspection 
     report, revoke the license of the person unless the Secretary 
     makes a written finding that revocation is unwarranted 
     because of extraordinary extenuating circumstances.''.

  Mr. SANTORUM. Mr. President, the amendment and modification I just 
sent to the desk is an amendment that is referred to as the Puppy 
Protection Act that Senator Durbin and I have introduced. The reason I 
brought this up is because of my continuing concern, and I know Senator 
Durbin's continuing concern, about the treatment of dogs and puppies in 
some of the breeding facilities across the country. There are literally 
about 3,000 such commercial breeding establishments that breed puppies 
for sale into homes as pets.
  There are, unfortunately, numerous reports and evidence of very bad 
conditions in these puppy mills. I have had an ongoing concern about 
it. We have been working for quite some time with USDA to improve 
enforcement. They have some 80 people to enforce the existing Animal 
Welfare Act. They simply are understaffed. The problem we are seeing is 
not only are they understaffed but there are some holes in the animal 
welfare law.
  A lot of my colleagues have come to me because they have been hearing 
from some of their constituents who are saying: Why is Rick Santorum 
trying to expand the reach of the Federal Government to take care of 
breeding dogs? This doesn't seem to be something in which the Federal 
Government should be involved.
  First off, the Federal Government is involved. In 1966, we passed the 
Animal Welfare Act. We have had several amendments to it since--I think 
four or five times throughout the 1970s or 1980s. Because these are 
commercial breeding establishments that breed animals, we, the USDA and 
the Congress, have seen fit to have the Department of Agriculture 
regulate these large facilities. We do regulate in the area of 
handling, housing, sanitation, feeding, watering, ventilation, shelter, 
adequate veterinary care, and exercise. Those are provisions already in 
the existing veterinary law here in Washington, DC, which the USDA is 
responsible for regulating.

  But there are some areas we believe lead directly to not just the 
health of the dog but the suitability of the dog as a pet that results 
from, we believe, some bad practices.
  Before I go into detail about what my bill does, I want to be very 
clear about what my bill doesn't do. One thing my bill does not do--and 
the amendment of Senator Durbin and myself does not do--is expand who 
is covered under the Animal Welfare Act. We have heard from the 
American Kennel Club and some members calling my office, and I know 
other Members have gotten calls from AKC members within their States, 
saying this is a great expansion of reach; you are going to have all 
these breeders who are going to run afoul of the Federal Government now 
if this legislation passes.
  According to AKC's own records from 1997, which are the most recent 
ones we have, 97 percent of their breeders are not covered under the 
existing Animal Welfare Act. And our act does not amend who is covered. 
It just says what will be looked at upon inspection. Ninety-seven 
percent of their members will not be covered. Why? Because the Animal 
Welfare Act only covers breeders who breed four or more females. If you 
breed less than four females, you are not covered under the Animal 
Welfare Act and you are not covered under this proposed amendment to 
the Animal Welfare Act.
  Again, from their own numbers, only .04 percent of their members 
registered

[[Page S517]]

more than three litters in a year. So I say as to a lot of these calls 
coming in, saying: You are going to be harming the mom-and-pop breeder 
here, the folks who have a female dog they want to breed for a little 
extra income as part of their experience with their animal, you are 
going to be affecting them, the answer is no, we are not. What we are 
talking about here are facilities that are in the commercial breeding. 
We want to make sure these puppies that are bred, when they go into the 
home, go into the home healthy, No. 1-- I mean from disease and genetic 
maladies, but that they also go in properly socialized so they can be 
good pets.

  The areas we have focused in on are really three. No. 1 is the area 
of socialization or interaction. It requires that the puppies in these 
breeding facilities have interaction with other dogs and with humans.
  Can you imagine the situation where a dog is bred and put in a cage, 
basically isolated from human contact for several weeks and having no 
interaction with human beings and having no interaction with other 
dogs, and then placed in a home maybe with little children? The impact 
could be severe. In fact, there is evidence to suggest that that is one 
area.
  We just require some interaction. It is not particularly an onerous 
standard. We think it is a rather commonsense standard. I find it 
difficult for anyone to find a problem with that.
  The second area has to do with breeding. There is a lot of concern. 
One of the sponsors of my amendment is one of the two veterinarians in 
the Senate. There are two Senators who are veterinarians. But one of 
them dealt with small animals; that is, Senator Ensign from Nevada. He 
is a cosponsor of my amendment. He personally told me stories of the 
problems with large commercial breeders in overbreeding females and 
constantly breeding more than is healthy for the female. It has an 
impact, obviously, on the litter and the health of the litter with 
diseases and other complications.
  Here we are talking about a standard, it is my understanding, 
according to all reputable breeders which they adhere to already. It is 
a standard that puts in place what we believe are sound breeding 
practices based on evidence of producing a line of healthy puppies.
  I know Senator Ensign is planning on coming in next week to talk 
about this legislation. He will probably give many more good examples 
with a lot more technical expertise than I can possibly offer. But I 
wanted to make it clear that this is a problem.
  It is a problem when you have a very excited family that brings a new 
puppy into the home. They find out that this puppy, because of improper 
breeding, tends to have a lot of problems, gets ill, and maybe dies. 
That is obviously terrible for the puppy, but it is also very traumatic 
for the family.
  The last provision has to do with enforcement. Before I talk about 
this provision, let me make it clear that if the USDA goes in and finds 
a bad situation, they have the ability to revoke the license. These 
facilities are licensed by USDA. They have the ability to go in and 
immediately revoke the license if there is one severe infraction of the 
Animal Welfare Act. We don't change that. But we say under this 
legislation, if you have three such infractions within an 8-year period 
of time, USDA must automatically revoke the license. You can appeal and 
do all the things about the specific instances to get your license 
reinstated. But this ``three strikes and you are out'' provision really 
tries to suggest to USDA that when you have a pattern of mistreatment 
and violation of the law, that action should be taken.
  Again, let me remind everybody that USDA can do it right now. They 
have the discretion to do it with one infraction. We are saying that 
upon three, the license will be revoked. We are talking about 
commercial breeders. We are not talking about breeders that breed fewer 
than four animals.
  This is an amendment that has very broad support from over 800 animal 
welfare organizations, including the Humane Society and the American 
Society for Prevention of Cruelty to Animals.

  Of course, this legislation is, frankly, a very modest amendment. I 
cannot tell you how many changes I have made. I think this is the 
fourth change I have filed with this legislation in an attempt to try 
to deal with the research community that is concerned about certain 
aspects of this legislation and their application. We have dealt with 
the small breeders, even though, frankly, they are not covered by it. 
But we have tried to ameliorate some of the concerns from the American 
Kennel Club.
  We have really worked very hard to try to make sure that no one who 
is serious about the healthy breeding of puppies has a concern. It is 
not my intention to bring the dog police into every home in America 
that breeds puppies. The fact of the matter is there are large 
commercial establishments that, frankly, need to do a better job in 
breeding puppies for homes.
  I am hopeful that we can have very broad support. I have been working 
with Senator Helms. Senator Helms has been very helpful. I appreciate 
this morning his suggesting that we can now be supportive of this 
legislation as we have made the additional change in the legislation.
  We are trying to work through all of these matters. I would be very 
happy if we could get this in the managers' amendment. If not, I am 
certainly happy to take this to a vote. I think it will have very 
strong support from both sides of the aisle.
  Who wants to have puppies in the home that are not socialized or that 
have diseases or that are not in the best position to be good pets for 
our families across America?
  I thank the Chair for the time. I yield the floor.
  The PRESIDING OFFICER. The Senator from South Dakota.


                           amendment no. 2835

  Mr. JOHNSON. Mr. President, I rise to express my strong opposition to 
the amendment offered by Senator Craig last evening which would 
eliminate a bipartisan provision in this farm bill that restores 
fairness, competition, and free enterprise into livestock markets.
  In December, the Senate adopted an amendment to the farm bill based 
upon legislation I introduced 3 years ago which strengthens the Packers 
and Stockyards Act of 1921, by prohibiting large meatpackers from 
owning livestock--cattle, hogs, and sheep--for more than 14 days prior 
to slaughter.
  Nearly every farm and ranch organization in the country supports a 
ban on packer ownership, including the American Farm Bureau, the 
National Farmers Union, R-CALF, the Livestock Marketing Association, 
the Organization for Competitive Markets, the Center for Rural Affairs, 
and the Western Organization of Resource Councils, just to name a few.
  More importantly, every farm and ranch group in South Dakota supports 
my amendment, including Farm Bureau, Farmers Union, the Cattlemen, the 
Stockgrowers, Livestock Auction Markets, the Independent Pork 
Producers, and even South Dakota Governor Janklow.
  Let me take some time to clarify what our amendment does, and, what 
it does not do.
  The objectives of our amendment are to increase competitive bidding, 
choice, market access, and bargaining power to farmers and ranchers in 
livestock markets. Here are the facts about our amendment.
  First, my language strengthens section 202 of the Packers and 
Stockyards Act of 1921--and 80-year-old law--by prohibiting meatpackers 
from owning, feeding, or controlling livestock for more than 14 days 
prior to slaughter. Currently, packers are already prohibited from 
owning sale barns and auction markets.
  Second, it exempts producer-owned cooperatives engaged in slaughter 
and meatpacking, in addition to packing plants owned by producers who 
slaughter less than 2 percent of the national annual slaughter of beef 
cattle--724,000 head--hogs--1,900,000 head-- or sheep--69,200.
  Therefore, many of the innovative, start-up projects operating and 
being formed to give producers greater bargaining power in the market 
will not be affected by our amendment. Some have made very misleading 
and false statements about the Johnson-Grassley amendment and our 
intent. Let me try to clarify some of those issues.

  This amendment does not prohibit meatpackers from purchasing 
livestock for slaughter. In fact, it promotes the

[[Page S518]]

purchase of livestock in the cash market. Therefore, it promotes 
competition and bidding among a significant number of buyers.
  Again, I say, this amendment does not ban packers from owning 
livestock for slaughter; it simply says they cannot own the livestock 
from birth all the way until slaughter, the vertical integration to 
which some aspire. It bans them from owning livestock prior to 14 days 
from the date of slaughter.
  The amendment does not prohibit forward contracts wherein packers and 
growers work together to raise and market livestock as long as the 
livestock are owned by the individual farmer or rancher.
  Senator Grassley and I have taken significant efforts to make it 
crystal clear that forward contracts and marketing agreements are not 
prohibited under this amendment. We have entered into a colloquy making 
it clear that the word ``control'' only refers to substantial 
operational control and not contracts.
  There are those who would prefer that this amendment did apply to 
forward contracts, and I respect those who hold those views. But the 
goal of this amendment is narrow. The goal of this amendment is focused 
exclusively on the actual vertical integration, the actual packer 
ownership from birth to slaughter of livestock.
  Some have questioned whether contractual marketing arrangements known 
as forward contracts are permitted under the provision. The answer is 
yes.
  Three of the most respected agricultural economists and legal counsel 
in America--Roger McEowen from Kansas State University, Peter 
Carstensen from the University of Wisconsin, and Neil Harl from Iowa 
State University--have completed an analysis that supports our intent 
that contractual marketing arrangements and forward contracts are 
permitted under this amendment.
  These experts agree with us that the meaning of the word ``control'' 
in this amendment applies to a potential arrangement purposefully 
drafted by a clever legal counsel to give a packer control over the 
ownership of livestock from birth to slaughter, though a farmer may 
hold title to the livestock, by providing the packer complete 
operational control over these animals.
  Operational control provides the packer the ability to dictate nearly 
every detail of production and marketing, such as the facilities, 
nutritional and veterinary decisions, as well as providing the packer 
24-hour access to the livestock. Forward contracts and other marketing 
arrangements do not give a meatpacking firm managerial or operational 
control of the production-to-market process. Rather, such arrangements 
only provide the packer with a contractual right to receive delivery of 
the livestock in the future. The producer signing the contract still 
makes most of the production decisions. Therefore, forward contracts or 
contractual marketing arrangements are still permitted under the 
language of this amendment and the word ``control'' does not affect 
their use.
  So Senator Grassley and I have received assurance from legal counsel 
that ``control'' does not include forward contracts and marketing 
agreements. On the other hand, those expressing opposition have 
presented no legal analysis in support of their proposition that 
somehow the word ``control'' in this legislation means a prohibition on 
forward contracting.

  While marketing arrangements such as forward contracts have caused or 
can cause problems in the market, they are outside the scope of this 
specific amendment.
  In a December colloquy with Senator Grassley, we stated the intent of 
the word ``control'' must be read in the context of ownership. In other 
words, ``control'' means substantial operational control of livestock 
production, rather than the mere contract right to receive future 
delivery of livestock produced by a farmer, rancher, or feedlot 
operator. ``Control,'' according to legal dictionaries, means ``to 
direct, manage or supervise.'' In the meaning of our amendment, the 
direction, management, and supervision is directed towards the 
production of livestock or the operations producing livestock, not the 
simple right to receive delivery of livestock raised by someone else.
  There are two reasons that forward contracts and marketing agreements 
are not within the definition of ``control.'' First, these contracts do 
not allow a packer to exercise any control over the livestock 
production or operation. Rather, the contracts merely provide the 
packer with the right to receive delivery of livestock in the future, 
and most include a certain amount of quality specifications. There is 
no management, direction, or supervision over the farm operation in 
these contracts.
  The farmer or rancher makes the decision to commit the delivery of 
livestock to a packer through the contract without ceding operational 
control. In fact, the farmer or rancher still could make a management 
decision to deliver the livestock to another packer other than the one 
covered in the contract, albeit subject to damages for breach of 
contract. Even where such contracts include detailed quality 
specifications, control of the operation remains with the farmer. The 
quality specifications simply relate to the amount of premiums or 
discounts in the final payment by the packer for the livestock 
delivered under the contract.
  Second, several States, such as Iowa, Minnesota, Nebraska, and South 
Dakota, already prohibit packer or corporate ownership of livestock.
  The Iowa law, for example, prevents packers from owning, operating, 
or controlling a livestock feeding operation in that State. But packers 
and producers may still enter into forward contracts or marketing 
agreements without violating that law because operational control, in 
the context of ownership, is the issue. The term ``control'' is 
intended to be similarly interpreted and applied in this amendment.
  Beyond the genuine concern about this amendment, a few in the 
meatpacking industry have hastily come to false, or at least erroneous, 
conclusions about its effect, and, frankly, they are busily working the 
Halls of Congress to kill this amendment due to those concerns. It may 
be that we simply have a profound philosophical difference between 
those of us who supported the amendment and others in opposition.
  I believe our country is best served by a wide dispersion of 
independent livestock producers who have, in a free market, an 
opportunity to leverage a decent price for their animals and a decent 
opportunity to sell those animals in a competitive environment. I 
believe it is a disservice to rural America, a disservice to the 
livestock industry, if we wind up with a circumstance where our 
independent livestock producers increasingly become, in effect, low-
wage employees of the packers on their own land--subject to all the 
risks of livestock production but very little of the occasional profit 
that can come about from a fair opportunity to sell their animals. So 
we have a profound difference of vision of what livestock production is 
all about and how our country is best served.

  I believe in free enterprise. I believe in competition. I believe in 
independent producers having opportunities to seek out alternative 
buyers for their animals on an independent cash basis.
  If some wish to forward contract and to secure its assurances, that 
is fine. That is a prerogative they have as well, at least under this 
amendment. But I do not believe we ought to have a total vertical 
integration of the livestock industry whereby a very small handful of 
huge agribusiness conglomerates control the production of livestock 
from birth all the way through slaughter, reducing livestock producers 
to simply low-wage employees, for all practical purposes. That is not 
my vision of rural America. That is not the vision shared by the people 
who supported this amendment.
  So I think that while a lot of this debate is caught up in what may 
sound legalese to many, the actual consequences of what is going on 
here have profound effects on the look of rural America for all time to 
come.
  There is a particular packer who has been running full-page ads in my 
State, apparently with an intent to intimidate me. They have the right 
to do that. It turns out that the packing company that does operations 
in my State is a pork production company which has never owned hogs, 
and has no particular immediate plan to, and would not be affected, at 
least for now,

[[Page S519]]

by this amendment. They may wish to go into a different business plan 
than they have had in the past, and that may be the case.
  But I want to make clear that I believe someone has to stand up for 
livestock producers in our country. We see this continued 
concentration, this continued integration, going on in every sector of 
the economy, but certainly in agriculture it has been one of the 
harshest. For that reason, Senator Grassley and I have offered this 
amendment. We have already passed this amendment on a narrow 51-to-46 
vote earlier this past session of the 107th Congress.
  I have no problem with an additional vote, an up-or-down vote. Let 
everyone stand up and be counted wherever they are. I respect my 
colleagues however they may come down on this issue. I do want to 
convey the real import, the real impact of this amendment, and make 
people understand what is, in fact, at stake.
  The amendment being offered would reduce this antipacker ownership 
amendment to another study. Heaven knows, we have studies galore lining 
the shelves of every building in Washington, DC, many of them gathering 
dust. We have known USDA to conduct study after study after study not 
leading to any matter of practical consequence. I don't think our 
farmers and ranchers need another study.
  It is incorrect to observe that no hearings have been conducted on 
the topic of packer ownership. Rather, the Senate Agriculture Committee 
has held three hearings on concentration in livestock markets, packer 
ownership, and other issues--in June of 1998, May of 1999, and April 
2000--and the problems remain clear and the need to act remains real.
  The percentage of hogs owned by packers rose from a small 6.4 
percent, as recently as 1994, to 27 percent in 2001, from 6.4 percent 
to 27 percent packer ownership in a period of only 7 years, according 
to the University of Missouri. This increase in packer-owned hogs means 
that packers prefer to buy their own hogs instead of paying farmers a 
fair price, thereby depressing competition. Eighty-eight percent of 
respondents in the Iowa Farm and Rural Life Poll believed that 
meatpackers should be prohibited from owning livestock, and 89 percent 
believed that too much economic power is concentrated in a few large 
agribusinesses, according to studies done by Iowa State University.
  When packers own their own farms and their own livestock, they do not 
make purchases from farmers who would otherwise be providing economic 
contributions to rural communities--main street businesses, school 
districts tax base, banks, car dealerships, feed stores, and so on. 
Those opposed to this amendment have a different vision for rural 
America, a far different vision than mine. I have a more optimistic 
view of what rural America could look like. I envision more farmers and 
ranchers being able to compete in a free market and a free enterprise 
system raising more livestock on family farms so local economies can 
grow and the environment can be safer for families to make a living.
  I fear if we go the other direction, packer market power will grow, 
allowing packers to go to the cash market only during narrow bid 
windows or time periods each week rather than bidding all week, thus 
resulting in panic selling by producers.
  A ban on packer ownership of livestock will not drive packers out of 
business. Most of their earnings are generated from branded products 
and companies marketing directly to consumers. Conversely, livestock 
ownership by packers could drive independent livestock producers out of 
business because they will simply be at the mercy of these large 
corporations.
  I do not, again, have a problem with another vote. It was important 
to clarify the forward contracting component of this amendment to make 
it crystal clear that that is not the gist of it. The gist is not 
forward contracting. The gist is the vertical integration of the actual 
ownership, the birth and slaughter of livestock in America.
  We have a very fundamental decision to make in this body. I don't 
underestimate the steep climb this amendment has to make. I know the 
packers have been active in their lobbying effort. I know the 
intimidation efforts have been extraordinary. I recognize that no such 
amendment is contained in the House version of the agriculture bill and 
that, even if we were to survive in the conference committee, an uphill 
fight would occur there relative to this amendment.

  Nonetheless, it is important to lay out in a clear, concise fashion 
what is at stake, what my motives are, what the motives are of the 
bipartisan sponsorship of this amendment, and to reflect that that may, 
in fact, be why this amendment acquired the support of every single 
Republican and Democratic Senator on the northern plains where 
livestock production is such a key component to the economies of our 
States.
  I look forward to continued debate and another amendment to vote on. 
We will see what the final product is, but I did want to make it very 
clear what this amendment does, what it does not do, and to make 
certain people understand that this is not some arcane agricultural 
issue; that this, in fact, is fundamentally crucial to the look of 
rural America for all time to come.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SPECTER. Mr. President, I have conferred with the manager of the 
bill. I think it would be appropriate to ask for unanimous consent to 
speak for up to 8 minutes as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The remarks of Mr. Specter are located in today's Record under 
``Morning Business.'')
  The PRESIDING OFFICER. The Senator from California is recognized.
  Mrs. FEINSTEIN. Mr. President, I ask that the pending amendment be 
set aside.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                Amendment No. 2829 to Amendment No. 2471

  Mrs. FEINSTEIN. I send an amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from California (Mrs. Feinstein) proposes an 
     amendment numbered 2829.

  Mrs. FEINSTEIN. Mr. President, I ask unanimous consent that further 
reading of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

 (Purpose: To make up for any shortfall in the amount sugar supplying 
    countries are allowed to export to the United States each year)

       Strike the period at the end of section 143 and insert a 
     period and the following:

     SEC. 144. REALLOCATION OF SUGAR QUOTA.

       Subtitle B of title III of the Agricultural Adjustment Act 
     of 1938 (7 U.S.C. 1311 et seq.) is amended by adding at the 
     end the following:

        ``PART VIII--REALLOCATING SUGAR QUOTA IMPORT SHORTFALLS

     ``SEC. 360. REALLOCATING CERTAIN SUGAR QUOTAS.

       ``(a) In General.--Notwithstanding any other provision of 
     law, not later than June 1 of each year, the United States 
     Trade Representative, in consultation with the Secretary, 
     shall determine the amount of the quota of cane sugar used by 
     each qualified supplying country for that fiscal year, and 
     shall reallocate the unused quota for that fiscal year among 
     qualified supplying countries on a first come basis.
       ``(b) Method for Allocating Quota.--In establishing the 
     tariff-rate quota for a fiscal year, the Secretary shall 
     consider the amount of the preceding year's quota that was 
     not used and shall increase the tariff-rate quota allowed by 
     an amount equal to the amount not used in the preceding year.
       ``(c) Definitions.--In this section:
       ``(1) Qualified supplying country.--The term `qualified 
     supplying country' means one of the following 40 foreign 
     countries that is allowed to export cane sugar to the United 
     States under an agreement or any other country with which the 
     United States has an agreement relating to the importation of 
     cane sugar:

    Argentina
    Australia
    Barbados
    Belize
    Bolivia
    Brazil
    Colombia
    Congo
    Costa Rica
    Dominican Republic
    Ecuador
    El Salvador
    Fiji
    Gabon

[[Page S520]]

    Guatemala
    Guyana
    Haiti
    Honduras
    India
    Ivory Coast
    Jamaica
    Madagascar
    Malawi
    Mauritius
    Mexico
    Mozambique
    Nicaragua
    Panama
    Papua New Guinea
    Paraguay
    Peru
    Philippines
    St. Kitts and Nevis
    South Africa
    Swaziland
    Taiwan
    Thailand
    Trinidad-Tobago
    Uruguay
    Zimbabwe.

       ``(2) Cane sugar.--The term `cane sugar' has the same 
     meaning as the term has under part VII.''.

  Mrs. FEINSTEIN. Mr. President, I offer this amendment to update and 
somewhat improve the so-called sugar program. The sugar subsidy program 
has been driving the domestic cane refinery industry out of existence, 
and it has eliminated thousands of good jobs. This amendment helps 
strike a new balance between saving our Nation's domestic refinery jobs 
and protecting sugar producers from foreign competition.
  What this amendment does is ensure that the amount of sugar allowed 
to come into the United States actually makes it to the market. The 
amendment would reallocate the unfilled portion of a country's quota 
when that country doesn't fill its quota, which happens almost 
annually.
  The Secretary of Agriculture does have the ability under present law 
to reallocate the quota, but it is a fight every year for domestic 
refineries to get enough sugar to refine, and it is also a fight to get 
the Secretary--regardless of whether it is a Democratic or Republican 
administration--to make this reallocation.
  The amendment would allow refineries to obtain more sugar under the 
quota by taking some allocation from nations not exporting as much 
sugar as they are allowed and giving it to nations that would export 
more sugar to the United States.
  The amendment is supported by the United States Cane Sugar Refiners' 
Association and the following independent refineries: C&H Sugar in 
Crockett, CA; Colonial Sugar in Gramercy, LA; Savannah Foods in Port 
Wentworth, GA; Imperial Sugar in Sugar Land, TX.
  In the past, we have failed to balance the refineries and the growers 
of the sugar industry successfully. This farm bill represents an 
opportunity to make a change before more refineries are forced to 
close. This amendment will help the country's sugar refining industry. 
It will not strip the domestic producers of any benefits.
  Something must be done to save our sugar refining industry. Since 
1981, 13 out of 23 cane refineries in the United States have been 
forced out of business. Here they are on this chart: Hawaii, Florida, 
Massachusetts, New York, Illinois, Florida, Louisiana, Pennsylvania, 
Louisiana, Missouri, and Louisiana. The loss of jobs between 1981 and 
today is over 4,000. Those refineries that do remain open today 
struggle to survive under what are very onerous import restrictions.
  At the end of the last year, we had a debate and the Senate 
overwhelmingly, regretfully, voted to continue the sugar subsidy 
program. I continue to oppose these sugar subsidies, but I recognize 
there are not the votes to eliminate the sugar program right now.
  I first became involved in this issue when David Koncelik, the 
president and CEO of the California and Hawaiian Sugar Company, known 
as C&H, informed me in 1994 that his 88-year-old refinery in Crockett, 
CA, was forced to temporarily close because it could not get cane sugar 
on the market to refine.
  C&H is the largest refinery in the United States. It is the only such 
facility on the west coast. It refines about 15 percent of the total 
cane sugar consumed in the United States. The company is capable of 
producing and selling about 800,000 tons of refined sugar annually. It 
is currently producing about 700,000 tons.
  Anyone who has driven from San Francisco to Sacramento and crossed 
the Carquinez Straits, as you go on to the bridge, you look down and 
you see this old, large brick refinery known as C&H. All of us grew up 
to the C&H commercial where they sang ``pure cane sugar from Hawaii''--
something like that--and I have seen the struggle go on year after 
year.
  Hawaii is C&H's sole source of domestic raw cane sugar. But the 
Hawaii sugarcane industry has been in decline now for over a decade. In 
fact, from 1996 through 2001, cane acreage fell by 50 percent in 
Hawaii, according to the Congressional Research Service. C&H can only 
make up for the lack of Hawaiian cane output by importing cane from 
other countries.
  There is the rub. Our Nation's restrictive sugar import quota limits 
the amount of sugar available for C&H to refine. Simply put, C&H has 
been unable to get enough sugar to refine and has been forced to send 
workers home on several occasions.
  In 1981, C&H had 1,313 employees. It is a union plant. In 1995, the 
company had 812. By 1999, that number dropped to 580 employees. Today, 
the refinery employs 565 workers.
  The U.S. sugar refining industry will continue to be at risk unless 
we adjust this imbalance in the industry and reform the sugar program. 
This amendment provides an opportunity to provide immediate relief to 
C&H and the other domestic refineries without compromising one single 
benefit to sugar producers. It is going to be interesting to see if we 
can get it through, because even though it does not take anything from 
them, they still oppose this. I have a hard time understanding why. 
This is not an attack. It is simply a way to update and improve the 
quota system.
  Let me repeat that. This amendment is not an attack on the sugar 
program. Sugar imports have been restricted almost continuously since 
1934 in order to support high prices for domestic sugarcane and sugar 
beet producers. The USTR, working with the Department of Agriculture, 
allocates shares of the quota among 40 designated countries. Since the 
1994 Uruguay Round of trade talks, the United States has allowed the 
designated countries to export 1.256 million tons of sugar to the 
United States under the quota. Today's sugar import restrictions are 
based on a formula derived from trade patterns that prevailed over a 
quarter of a century ago, and therein lies the rub and the major 
problem for domestic refiners such as C&H. The quota does not 
accurately reflect how much countries are able to export to the United 
States.
  Some of the 40 designated countries have even been forced to provide 
an export allocation when they do not export any sugar at all. Does 
that make sense? I think not. In fact, according to the GAO, on the 
average, from 1993 through 1998, 10 of the 40 countries were net 
importers of sugar. This means they do not export sugar to the United 
States if they need to import sugar to their own country. Therefore, 
that allocation, that part of the quota, goes unused. Our refineries 
that would like to buy that raw sugar on the open market cannot buy it. 
It makes no sense.
  Other countries continue to export sugar, but they have substantially 
reduced their production. For example, since the allocations were made, 
the Dominican Republic has experienced a 50-percent decline in sugar 
production, and the Philippines, a 27-percent drop, but the allocation 
for both countries has remained the same. If the Philippines is not 
going to export and the Dominican Republic is not going to export their 
quota, all we want to do is let some country get that shortfall and put 
it on the market to give our domestic sugar refiners the opportunity to 
buy it.
  Some countries have substantially increased their sugar production 
but not seen the amount they are allowed to export to the United States 
increase. For example, since the allocations were made, Guatemala, 
Colombia, and Australia have increased their production by 219 percent, 
96 percent, and 61 percent, respectively, while their shares of the 
allocation have remained the same.
  Some countries have similar allocations under the quota despite 
dramatically different levels of sugar exports. For example, Brazil and 
the Philippines are both allowed to export 14 percent of the total 
quota, but Brazil

[[Page S521]]

exports 21 times more sugar than the Philippines worldwide. It is 
unacceptable that quota allocations have not been revised for 20 years, 
or 2 decades, despite dramatic changes in the ability of many countries 
to produce and export sugar.

  Is there a way to update the sugar export amounts allowed into the 
United States without adversely impacting growers? I believe there is, 
and the amendment I have offered will provide the slight change to the 
sugar export quota that is desperately needed.
  The United States has imported on the average about 3 percent less 
sugar than the quota allowed from the 1996-through-1998 allocation 
because some countries did not fill their allocations. So there is that 
3 percent out there. Since the sugar quota does not reflect the current 
capability of many countries to produce and export sugar, the GAO has 
concluded:

       The United States Trade Representative's current process 
     for allocating the sugar tariff rate quota does not insure 
     that all of the sugar allowed under the quota reaches the 
     United States market.

  There is the point. There is the differential. The sugar that does 
not reach the market in the quota should be made available.
  I would like to read some of the July 1999 report on the sugar 
program issued by the GAO:

       The current allocation process has resulted in fewer sugar 
     imports than allowed under the tariff rate quota. From 1996 
     through 1998, the United States raw sugar imports averaged 
     75,000 tons less annually than the amount USDA allowed the 
     United States Trade Representative to allocate under the 
     tariff rate quota. According to domestic refinery officials, 
     this shortfall has exacerbated recent declines in the overall 
     availability of raw cane sugar on the U.S. market.

  If there is a shortfall in sugar exported to the United States, and 
refineries are shut down because there is not enough cane to refine, we 
need to allow the quota to be flexible when there is this shortfall. 
The amendment I have offered will reallocate unused sugar in the quota 
to other countries when there is an export shortfall. This is exactly 
what the USTR did as recently as 1995. It is also the precise 
recommendation of the GAO in its 1999 report. In suggesting change to 
the sugar program, the GAO advised:

       Changes could include such actions as providing a means of 
     reallocating the current quota.

  All this amendment does is ensure the amount of sugar allowed to come 
into the United States is actually making it to the market. How is that 
so threatening to people? This opportunity to reallocate the quota when 
there is a shortfall will not hurt growers because the shortfall does 
not represent enough sugar to affect price. Of course, that is what 
they will say, that this will affect price. It will not affect price. 
It has not affected price before. There is no reason to believe it will 
affect it now.
  In the 1999 report, the GAO found:

       Because the shortfalls in the tariff rate quota reduced 
     total U.S. sugar supplies by less than 1 percent, they had a 
     minimal effect on the domestic price of sugar.

  If you do not trust me, trust the GAO. The inefficiencies of the 
current import restrictions demand that Congress accept this amendment.
  I respectfully ask my colleagues to support this amendment. It will 
help make the sugar program operate more effectively and efficiently. 
If this body can't accept this simple amendment, it clearly tells me 
that not only is the sugar allocation outdated, but it is essentially 
controlled to manipulate so certain people can do business while others 
cannot.
  These refineries are very important. My Crockett refinery is the 
major source of jobs in that entire Crockett community. Each year, the 
CEO has to come back here to plead with his representatives in 
Congress:

       I can't buy enough sugar on the market to keep my people 
     employed. I pay them good salaries. It is important I be able 
     to operate and refine sugar. I want to buy it on the open 
     market and I can't--is simply wrong.

  It is flawed public policy. I ask for this body's support to pass 
this amendment.
  I ask unanimous consent to have printed in the Record an article from 
the New York Times.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

                 [From the New York Times, May 6, 2001]

                   Sugar Rules Defy Free-Trade Logic

                           (By David Barboza)

       For anyone who thinks of the United States as a free-trade 
     nation, the 10 story brick sugar refinery on Highway 90A here 
     on the outskirts of Houston is startling.
       The plant can produce up to 500,000 tons of sugar a year, 
     enough to sweeten about 90 billion doughnuts. But while 
     America has a sweet tooth, it does not need all that sugar. 
     Indeed, America is swimming in sugar, largely because the 
     sugar business is one of the economy's most protectionist 
     niches. Sugar programs that protect growers from foreign 
     competition cost American consumers almost $2 billion a year 
     in higher prices for everything from candy bars to cold 
     cereal, according to government studies. Artificially high 
     prices have led to overproduction, leaving taxpayers the 
     owners of one million tons of sugar that they pay $1.4 
     million a month just to store, some of it in Sugar Land.
       Yet earlier this year the owner of the plant here--the 
     Imperial Sugar Company, the nation's biggest sugar refiner--
     was forced to file for Chapter 11 bankruptcy protection, 
     because it has lost so much money lately turning relatively 
     high-priced raw sugar into the refined sugar it sells into a 
     depressed, glutted market.
       Now, refiners are demanding an overhaul of the sugar 
     program. Consumer groups want it abolished. And even its 
     backers and beneficiaries--big growers that are major donors 
     to both political parties--are dissatisfied. They want more 
     protection, complaining that new trade initiatives, like the 
     North American Free Trade Agreement, threaten to undermine 
     the industry and further depress the price of sugar.
       Congress is now hearing testimony on these matters as it 
     takes up a new farm bill. The conventional wisdom is that 
     Washington is unlikely to scrap a program that has bipartisan 
     support, any more than it has been prone to eliminate 
     supports for other farmers.
       But some lawmakers say sugar policy, in particular, is ripe 
     for revision.
       ``Events of the past year indicate that the sugar program 
     is becoming increasingly unmanageable and that radical 
     reforms are needed urgently,'' said Richard G. Lugar, 
     chairman of the Senate Agriculture Committee and a longtime 
     opponent of the program.
       At the heart of the debate is a sugar policy that since the 
     New Deal has held that domestic growers ought to be shielded 
     from the vagaries of the commodity markets. The current 
     program, put in place in 1981, promised that kind of 
     stability by limiting imports and making loans to growers.
       But in recent years, helped by technology and weather, 
     production has exploded. And government policies and price 
     supports, on balance, encouraged farmers to abandon even more 
     seriously depressed crops in favor of sugar beets and cane.
       Overproduction sent prices tumbling, hurting growers. But 
     the hardest hit were cane refiners. At times, the prices they 
     paid for raw sugar were higher than those at which they could 
     sell refined sugar.
       If nothing changes, industry officials fear a feroclous 
     one-two punch: the possible loss of cane-refining capacity at 
     home, which could hurt food producers, and a steady rise in 
     imports, which could wipe out both domestic growers and 
     refiners.
       Free-market economists say that might be the most efficient 
     outcome, but no industry disappears without a fight. The 
     refiners are just one of the interest groups that have 
     stormed Capitol Hill.
       None are so powerful as the nation's largest producer of 
     raw sugar, the Flo-Sun Corporation of Palm Beach, Fla., run 
     by Jose Pepe Fanjul and Alfonso Fanjul, Cuban exiles who 
     created a sugar empire in the Florida Everglades and who are 
     now big donors to both Republicans and Democrats.
       Flo-Sun and other giant producers want to strengthen the 
     program by putting new restrictions on domestic production of 
     sugar beets and cane. They also want to limit the scope of 
     any future trade deal that might lead to what they consider 
     unfair competition.
       ``We don't believe we ought to sacrifice the American 
     farmer to bring in sugar that is subsidized by other 
     governments,'' said Judy Sanchez, a spokeswoman at U.S. 
     Sugar, one of Florida's biggest cane producers.
       Critics of the program--from food producers to refiners to 
     consumer groups--would like the program discarded or 
     significantly weakened.
       ``We want the program phased out,'' said Jeff Nedelman, a 
     spokesman for the Coalition for Sugar Reform, a trade group 
     that represents food and consumer groups, taxpayer watchdogs 
     and environmental organizations. ``This is corporate welfare 
     for the very rich. The program results in higher prices for 
     consumers, direct payments by U.S. taxpayers to sugar 
     growers, and it's the Achilles' heel of U.S. trade policy.''
       Chicago, home of Sara Lee cakes and Brach's Starlight Mints 
     candies, has aligned itself with the critics. A few weeks 
     ago, Mayor Richard M. Daley and other city leaders announced 
     that they would lobby Congress to end the sugar program, 
     which they said was hurting the city's makers of candy and 
     food by inflating costs.
       Indeed, the General Accounting Office says the sugar 
     program cost consumer about $1.9 billion in 1998, with the 
     chief beneficiaries being beet and cane growers.
       Senator Byron L. Dorgan, a North Dakota Democrat who is a 
     strong backer of the

[[Page S522]]

     sugar program, says Americans are not being overcharged. 
     Rather, he contends, prices on the world market are 
     artifically depressed by surplus sugar from countries that 
     subsidize production.
       ``The world price has nothing to do with the cost of 
     sugar,'' he said. ``And my contention is that the program 
     causes stable prices.''
       Americans' appetite for sugar is measured in pounds. The 
     average person in this sugar-saturated country consumes more 
     than 70 pounds a year of refined sugar and that does not 
     include most soft drinks, sauces and syrups, which are 
     sweetened with high-fructose corn syrup.
       But even that appetite is no match for current levels of 
     sugar production. A record 8.5 million tons of sugar was 
     produced in the United States in 1999, and that sent raw 
     sugar prices tumbling to 18 cents a pound, the lowest level 
     in 20 years. The Agriculture Department stepped in last 
     June to buy 132,000 tons, at a cost of $54 million, or 20 
     cents a pound.
       Imperial Sugar--already burdened by $500 million in debt 
     because of an acquisition spree--was hit harder than anyone 
     in the industry. The company was forced to buy raw sugar cane 
     at about the same price that it could sell the finish 
     product.
       ``We're out of gas before we turn the lights on,'' said 
     I.H. Kempner III, Imperial Sugar's chairman, whose family 
     acquired its first holdings in 1907. Imperial filed for 
     bankruptcy protection in January.
       The New York-based Domino, a unit of Tate & Lyle of Britain 
     and a leading supplier of pure cane sugar to grocery chains, 
     is also ``in desperate shape,'' said Margaret Blamberg, a 
     spokeswoman. C&H Sugar, a big California refiner, is 
     struggling both with low sugar prices and the state's rising 
     energy costs.
       For growers, the biggest threat is the political tide 
     favoring free trade. Under Nafta, Mexico is getting greater 
     access to the American sugar market. And in 2008, the 
     agreement will give Mexico unlimited access to the American 
     market.
       Just how much Mexican sugar can enter the American market 
     this year is in dispute. American trade officials say that 
     about 100,000 tons of surplus sugar is allowed in, while 
     Mexican officials say the figure is 500,000 tons. Under an 
     agreement reached at the Uruguay Round of global trade talks 
     in 1994, the United States is required to import about 1.1 
     million tons of sugar a year.
       The solution, the growers say, is more protection for the 
     industry. Two weeks ago, the House Agriculture Committee 
     heard testimony from the major sugar producers, who proposed 
     stricter market and production controls at home and more 
     restrictive trade policies.
       ``You have to fix the big trade problems,'' said Luther 
     Markwart, chairman of the American Sugar Alliance, which 
     represents the major growers.
       Trade experts, however, say the sugar program makes free-
     trade talk seem hollow.
       ``Sugar is a nightmare in terms of trade negotiations,'' 
     said Prof. Robin A. King, an expert on trade policy at 
     Georgetown University. ``This is one reason other countries 
     get frustrated with our position on free trade. They say, `We 
     want to trade, but the items were produce you won't let in.' 
     ''

  Mrs. FEINSTEIN. I ask that the amendment be set aside. 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. HARKIN. Madam President, I ask unanimous consent the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Iowa.
  Mr. HARKIN. Madam President, what is the regular order right now in 
terms of amendments?
  The PRESIDING OFFICER. The pending amendment is the Feinstein 
amendment.


                           Amendment No. 2836

  Mr. HARKIN. Madam President, I ask unanimous consent that the pending 
amendments be set aside and ask for the regular order with respect to 
the Conrad amendment No. 2836.
  This amendment has been agreed to by both sides, and I urge its 
adoption.
  The PRESIDING OFFICER. The Conrad amendment is now pending.
  Is there further debate on the amendment?
  If not, the question is on agreeing to the Conrad amendment No. 2836.
  The amendment (No. 2836) was agreed to.
  Mr. HARKIN. Madam President, I move to reconsider the vote and move 
to lay that motion on the table.
  The motion to lay on the table was agreed to.


                Amendment No. 2837 To Amendment No. 2835

  Mr. HARKIN. Madam President, I now ask for the regular order with 
respect to the Craig amendment No. 2835, and call up Senator Grassley's 
second-degree amendment No. 2837, which is at the desk.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Iowa [Mr. Harkin], for Mr. Grassley, for 
     himself and Mr. Harkin, proposes an amendment numbered 2837 
     to amendment No. 2835.

  Mr. HARKIN. Madam President, I ask unanimous consent reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

  (Purpose: To make it unlawful for a packer to own, feed, or control 
                   livestock intended for slaughter)

       Strike all after ``SEC.'' and insert the following:

     10____1. PROHIBITION ON PACKERS OWNING, FEEDING, OR 
                   CONTROLLING LIVESTOCK.

       (a) In General.--Section 202 of the Packers and Stockyards 
     Act, 1921 (7 U.S.C. 192(f)) (as amended by section 1021(a)), 
     is amended by striking subsection (f) and inserting the 
     following:
       ``(f) Own or feed livestock directly, through a subsidiary, 
     or through an arrangement that gives the packer operational, 
     managerial, or supervisory control over the livestock, or 
     over the farming operation that produces the livestock, to 
     such an extent that the producer is no longer materially 
     participating in the management of the operation with respect 
     to the production of the livestock, except that this 
     subsection shall not apply to--
       ``(1) an arrangement entered into within 14 days before 
     slaughter of the livestock by a packer, a person acting 
     through the packer, or a person that directly or indirectly 
     controls, or is controlled by or under common control with, 
     the packer;
       ``(2) a cooperative or entity owned by a cooperative, if a 
     majority of the ownership interest in the cooperative is held 
     by active cooperative members that--
       ``(A) own, feed, or control livestock; and
       ``(B) provide the livestock to the cooperative for 
     slaughter; or
       ``(3) a packer that is owned or controlled by producers of 
     a type of livestock, if during a calendar year the packer 
     slaughters less than 2 percent of the head of that type of 
     livestock slaughtered in the United States; or''.
       (b) Effective Date.--
       (1) In general.--Subject to paragraph (2), the amendments 
     made by subsection (a) take effect on the date of enactment 
     of this Act.
       (2) Transition rules.--In the case of a packer that on the 
     date of enactment of this Act owns, feeds, or controls 
     livestock intended for slaughter in violation of section 
     202(f) of the Packers and Stockyards Act, 1921 (as amended by 
     subsection (a)), the amendments made by subsection (a) apply 
     to the packer--
       (A) in the case of a packer of swine, beginning on the date 
     that is 18 months after the date of enactment of this Act; 
     and
       (B) in the case of a packer of any other type of livestock, 
     beginning as soon as practicable, but not later than 180 
     days, after the date of enactment of this Act, as determined 
     by the Secretary of Agriculture.

  Mr. HARKIN. Madam President, I will speak a little bit now on this 
amendment and what it pertains to, but I am offering this on behalf of 
Senator Grassley, my colleague from Iowa.
  This is an amendment to the Craig amendment. Senator Grassley, 
unavoidably, could not be here today. He has to be back in the State of 
Iowa. But, obviously, we will not be voting on this until next week 
anyway. But we wanted to lay this down today.
  I am going to take the time now just to talk a little bit about this 
amendment and what it does. And then, of course, my colleague, Senator 
Grassley, will further elaborate on this when he returns after the 
weekend.
  As my colleague from Idaho, Senator Craig, mentioned yesterday, there 
has been a great amount of hype surrounding Senator Johnson's amendment 
that bans packer ownership. I cosponsored that amendment. The chief 
cosponsor, of course, was Senator Grassley from Iowa. Now, Senator 
Craig wants to replace the Johnson amendment which was adopted in the 
Senate, with a study because Senator Craig says he has some concerns 
about how the Johnson amendment will work.
  The basic concern--as I understand it, and as I listened to the 
speech last night and have read the Record--is over the word, 
``control''; that somehow there is a confusion about ``control'' and 
whether ``control'' would prohibit any kind of contracting 
relationships that a packer might have with a producer.
  Certainly, I believed when the Johnson-Grassley amendment was adopted 
that it was quite clear in the legislative language, and in the 
legislative history, that the amendment did not in

[[Page S523]]

any way preclude various types of contracting arrangements, such as 
forward contracting, for example.
  But those who are representing the huge packing industry have come in 
and kind of muddied the water. They have clouded it up and said: Oh, 
no, this may take away a farmer's right to contract. Of course, I have 
heard from some of my farmers in Iowa, who, first, do not want packer 
ownership of livestock because they know how badly that affects them, 
but, second, they do not want to have interference with contractual 
relationships they might want to make with packers.
  So to take care of any lingering concerns about this issue of 
``control,'' Senator Grassley is offering a second-degree amendment to 
Senator Craig's amendment.
  In essence, Senator Grassley's amendment, which I have asked to be a 
cosponsor of, will make it clear that while packers will not be able to 
own livestock, farmers will still be able to use contracts if they want 
to.
  As I said, there has been a lot of sort of hubbub going on around the 
Johnson amendment. Earlier this morning, I engaged in a colloquy with 
my friend from Minnesota, Senator Wellstone. And there were these 
egregious ads taken out in the Sioux Falls Argus Herald by one large 
packer, Smithfield Foods, Incorporated. The person who signed that was 
Mr. Joseph W. Luter, III, chairman and chief executive officer of 
Smithfield Foods, Inc. We talked about this ad and how egregious, how 
bad it is. It really is economic and political blackmail in the way 
this ad was written and what they are threatening to do. So again, to 
clear this up, Senator Grassley and I have offered this amendment to 
help address this type of economic strongarming.
  What the bill said, and what the legislative history made clear, is 
that packers could no longer own livestock, but the farmers could still 
contract and enter into these marketing agreements.

  Well now, how did the industry, the packing industry, create all this 
fuss? They did everything in their power to confuse and scare farmers, 
by making the conclusory statement that the Johnson legislation would 
ban contracting. In one paper, which Senator Craig referenced last 
night, eight economists made the same false assumption that the 
prohibition of packer ``control'' of livestock would affect 
contracting.
  Why the economists assume this, I do not know. The economic paper 
provided no legal analysis. I am told that none of the eight economists 
is a lawyer or has had any training in the law. The economic paper 
provided no legal analysis. In fact, to my knowledge, the opponents of 
this ban, the big packers, have never released any type of legal 
analysis to the public. They have just said this as a scare tactic. I 
guess the reason they have not released any legal analysis is because 
it would not survive legal or public scrutiny.
  The economists relied on an incorrect legal assumption. So they 
relied on an incorrect legal assumption, and they provided a detailed 
analysis based on that incorrect legal assumption. And, of course, the 
packing industry and the press ran with it.
  Thankfully, three lawyers who have worked in agriculture for years 
and are some of the best known in the field pointed out the fallacy of 
the economists' assumption. Roger McEowen of Kansas State University, 
Neil Harl of Iowa State University--whom I know personally is both a 
lawyer and an economist--and Peter Carstensen of the University of 
Wisconsin Law School, the three of them thoroughly explained that the 
word, ``control,'' has a very predictable meaning in the law and that 
it does not affect contracting.
  Madam President, I will not read it, but I ask unanimous consent to 
have printed in the Record the analysis and statement by these three 
individuals regarding the legal standpoint issue of ``control.''
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

       From a legal standpoint, ``control'' issues arise 
     frequently in an agency context in situations involving the 
     need to distinguish between an ``independent contractor'' and 
     an ``employee'' for reasons including, but not limited to, 
     liability and taxation. Typically, the existence of an agency 
     relationship is a question of fact for a jury to decide. At 
     its very essence, whether a relationship is an independent 
     contractor relationship or a master-servant relationship 
     depends on whether the entity for whom the work is performed 
     has reserved the right to control the means by which the work 
     is to be conducted. Under many production contract settings, 
     the integrator controls both the mode and manner of the 
     farming operation. The producer no longer makes many of the 
     day-to-day management decisions while the integrator controls 
     the production-to-marketing cycle. The integrator is also 
     typically given twenty-four hour access to the producer's 
     facilities. Conversely, forward contracts, formula pricing 
     agreements and other types of marketing contracts typically 
     do not give the integrator managerial or operational control 
     of the farming operation or control of the production-to-
     marketing cycle. Instead, such contracts commonly provide the 
     packer with only a contractual right to receive delivery of 
     livestock in the future. While it is not uncommon that 
     livestock marketing contracts contain quality specifications, 
     most of those contract provisions relate exclusively to the 
     amount of any premium or discount in the final contract 
     payment for livestock delivered under the contract. 
     Importantly, the manner in which quality requirements tied to 
     price premiums are to be satisfied remains within the 
     producer's control. Accordingly, such marketing contracts 
     would likely be held to be beyond the scope of the 
     legislation's ban on packer ownership or control of livestock 
     more than two weeks before slaughter. Thus, a packer would 
     still have the ability to coordinate supply chains and assure 
     markets for livestock producers through contractual 
     arrangements provided the contracts do not give the packer 
     operational and managerial control over the livestock 
     producer's production activities.

  Mr. HARKIN. So even with the assurance from these three legal 
experts, the opponents continue to raise doubts about the Johnson 
amendment's effect on contracting, even to the extent that some of the 
original supporters of the ban now want to set it aside because they, 
too, are concerned about this control issue. We cannot take this step 
backward.
  Recently, Senator Grassley and I, and others, have been working with 
some of these legal experts, as well as the American Farm Bureau, to 
develop an amendment that takes away any need to delay further any ban 
on packer ownership. This amendment makes it even clearer that while 
packers cannot own livestock, farmers still have the ability to forward 
contract and enter marketing agreements.
  Let me describe how this amendment works.
  Essentially, this amendment says that a packer can forward a contract 
or enter into any type of marketing agreement as long as the producer 
continues to materially participate in the management of the operation 
with respect to the production of the livestock. The key phrase here 
is, ``materially participate.''
  Why do we choose those words? Because there is a well-established 
definition to the phrase. Every farmer knows the phrase. Every attorney 
who works with the farmers knows well the importance of the term. That 
is because a farmer who materially participates in the farming 
operation must pay self-employment taxes. Those who do not materially 
participate do not have to pay self-employment taxes.
  The phrase has appeared in the IRS Code, section 1402(a) since 1956. 
To say that there is overly abundant case law and administrative 
comment and law review articles about the term would be an 
understatement.
  The legal community, the tax community, and the farm community know 
the difference because it is simply the difference between having to 
pay self-employment taxes or not paying them.
  What does this mean for forward contracts and marketing agreements? 
This amendment does not affect them. I know that farmers in Iowa who 
sell hogs under marketing agreements or who sell cattle under forward 
contracts materially participate because they pay self-employment 
taxes. Because the farmers materially participate in the management of 
their livestock production, this amendment will not affect their 
contracts.
  This amendment takes care of any concern that people had about the 
original law being unclear. It definitely takes care of anyone's 
concern about the law's effect on contracting. This amendment also 
maintains the same exemption from Senator Johnson's original amendment; 
that is, it exempts cooperatives as well as small packers who slaughter 
less than 2 percent of the national slaughter.
  Therefore, many of the innovative startup projects operating and 
being

[[Page S524]]

formed to get producers greater bargaining power in the market will not 
be affected by this amendment.
  I have to say something about Senator Craig's amendment in which he 
wants further study. Around here we know that an amendment to do a 
further study is killing the amendment-- especially this one. Senator 
Craig says we need more information. We have been there. The USDA has 
released a number of studies and papers on the issue of packer 
ownership and captive supply over the years, and the only thing that is 
clear is that the issue begs for policy clarification from Congress.
  Just in the past few years, the USDA released a major study on the 
procurement practices in the Texas panhandle as well as a recently 
released paper on the captive supply of cattle. This paper, which was 
released on January 18 of this year, included a 15-page appendix that 
lists the numerous studies already conducted. Senator Craig wants more 
studies.

  What do these studies find? They find a strong correlation between 
increased captive supplies and lower prices. The correlation is there. 
But the studies usually find that it is too hard to tell for sure 
whether one causes the other.
  It seems that the USDA is never going to be able to tell for sure. 
Someone can always create doubt. It is precisely in these types of 
situations that Congress should step in and clarify that certain 
practices such as packer ownership are illegal, to clarify it once and 
for all.
  It really boils down to this: If you believe that the top four 
packers of cattle in this country who control 81 percent of the market 
should be able to own livestock in a captive situation--if you believe 
that--you want to vote for Craig. You don't want to vote for the 
Grassley amendment. But if you believe that those independent cattle 
producers in Missouri, Iowa, South Dakota, Nebraska, Texas, and 
Kansas--all over the Midwest and the West--if you believe those 
independent producers ought to have some bargaining power and be able 
to bargain and negotiate with those top four packers on prices and have 
some independence and be able to own their livestock or to contract it, 
then you will want to vote for the Grassley amendment.
  That is what it is all about. You have huge packers who want to own 
livestock, who now own livestock. And here is the way it works. The 
packer owns the livestock. The farmer comes in. When cattle are ready 
to sell, you can't keep them around much longer; you have to sell them. 
So you go to the packer, and the packer says: Here is how much money I 
will give you for them. The livestock producer says: That is not 
enough. The packer says: Take it or leave it, because I have my own 
cattle which I can feed through the packinghouse, and I know you can't 
keep those cattle for another 14 days on feed.
  There you go. They squeeze them. It is called economic concentration, 
and they squeeze those independent producers. They are going out of 
business right and left.
  In my part of the country, we like to have a good livestock industry. 
You have balance. Sometimes when grain prices are low, you get high 
livestock prices. If livestock prices are low, you get higher grain 
prices. You have a good, even income for farmers who may have both 
livestock on feed, whether it is cattle or hogs, and grain production.
  This takes away from those independent farmers a valuable source of 
income and livelihood.
  Packer ownership does not help farmers. The packers get an increased 
ability to manipulate the markets. When packers lock up the chain 
space, as they say at the packing plant, the farmer does not have 
access to the market. We don't need a study. We have had enough 
studies. We need good, clear legislation. The Grassley amendment that 
prohibits the ownership of livestock by packers clears this up once and 
for all.
  Studies we don't need. We don't have to wait for studies. We have had 
plenty of them. Our farmers have been calling for action for years. 
Literally dozens of farm, commodity, rural community, and religious 
groups seek a ban on packer ownership. The two largest general farm 
organizations, the American Farm Bureau and the National Farmers Union, 
have explicit policy against packer ownership. They don't call for more 
delay. They don't call for more wringing of hands, for more studies 
that never seem to come to fruition. They want us to respond to the 
real problems that real farmers have out in the countryside today.

  Our farmers deserve more than just another study that is not going to 
show anything. They want real reform in the livestock markets. I think 
it is time to give them what they need and what our country needs. If 
we really believe in the market system, and we believe in many players 
and transparency and openness, how can you vote to let four of the top 
packers of livestock who control 81 percent of the market control all 
the inputs? That is not a free market. What our livestock producers are 
calling for is a free market. That is what we are calling for.
  I compliment my colleague from Iowa, Senator Grassley, for his 
amendment and for working with us--and the staffs working together with 
others--on a bipartisan basis to clear this up once and for all. When 
we get back next week, we will speak again about this.
  Over the weekend, there should not be any doubt in anyone's mind that 
the Johnson amendment would prohibit forward contracting. It doesn't. 
But in case there is any lingering doubt, the Grassley amendment clears 
it up and makes it explicitly clear that this amendment will not 
prohibit contracting relationships between farmers and packers.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Wellstone). The Senator from Ohio.
  Mr. DeWINE. Mr. President, I rise today to thank Senators Lugar and 
Harkin for the hard work they have demonstrated on this bill. I also 
thank them for accepting a sense-of-the-Senate resolution that is 
similar to a resolution I introduced earlier this week along with nine 
of my colleagues: Senators Bingaman, Dayton, Dorgan, Kerry, Sarbanes, 
Chafee, Dodd, Hagel, and Lott.
  Our resolution highlighted the important role effective foreign 
assistance programs play in fostering political stability, food 
security, rule of law, democracy, and ultimately peace around the 
world.
  Our resolution, as we originally introduced it, expressed the sense 
of the Senate regarding the importance of U.S. foreign assistance 
programs as a diplomatic tool for fighting global terrorism and 
promoting U.S. security interests.
  Many times we think about foreign assistance as just humanitarian 
assistance, helping other people. We have an obligation to do that. We 
forget, though, that when it is used effectively, it is a good foreign 
policy tool.
  In fact, it is an essential foreign policy tool. Tragically, I 
believe we have seen the amount of money that we put into foreign 
assistance go down in real dollars within the last 20 years. So as we 
try to carry out American foreign policy, that tool is simply not there 
as much as it used to be.
  Without question, there is a direct link between foreign aid programs 
and the self-sufficiency and stability of these developing countries. 
The reality is that when we go into a developing, impoverished, or war-
torn nation and give the suffering people assistance, we can make a 
positive difference. We can feed starving children, care for the sick 
and elderly, house countless orphans, and teach people new and more 
effective methods of farming. If we do these things, the people of 
those nations would be better able to pull themselves out of 
hopelessness and despair. These assistance programs must be looked at 
not just as a handout but literally, as we always say, a hand up, 
giving people the opportunity to help themselves.
  Chaos, poverty, hunger, political uncertainty, and social instability 
are the root causes of violence and conflict around the world. We know 
this. We also know we must not wait for a nation to implode before we 
take action. We must not wait for a nation's people to suffer from 
poverty, disease, and hunger. We must not wait for the rise of despotic 
leaders and corrupt governments, such as the Taliban.
  I believe we certainly have a moral obligation to those in the world 
suffering at the hands of evil leaders and corrupt governments. We have 
a moral obligation to the 1.2 billion people in the world who are 
living on less than $1 a day. We have a moral obligation to

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the 3 billion people who live on only $2 a day. This kind of poverty is 
unacceptable and, quite candidly, it is dangerous to us and to the 
stability of the world. I think it is something we have to work to 
change. It is in our self-interest that we do so.
  The fact is that foreign assistance has had an enormous impact when 
applied effectively. For example, over the past 50 years, our 
assistance has helped reduce infant child death rates in the developing 
world by 50 percent. We also have had a significant impact on worldwide 
child survival and health promotions, through initiatives, such as 
vaccinations and school feeding programs.
  Agriculture is certainly another area of great success. Today, 43 of 
the top 50 countries that import American agricultural products have in 
the past received humanitarian assistance from the United States. 
Today, they are our customers. Our investment in better seeds and 
agricultural techniques over the past two decades have made it possible 
to feed an additional 1 billion people throughout the world.
  Despite its importance and immeasurable value, our overall foreign 
affairs budget has been stagnant for the past 20 years. As I said, in 
real dollars, it has gone down. We currently use only about one-half of 
1 percent of our Federal budget for humanitarian assistance. Yet this 
assistance is absolutely critical for people in war-ravaged, 
politically unstable, impoverished nations. The children, the elderly, 
and the civilian people are not responsible for the political and 
economic turmoil in their homelands, but they are the ones who always 
end up suffering the most.
  Right now, increases in foreign assistance could make a very real 
difference around the world. One example is in our own backyard, and 
that is in the country of Haiti. I recently returned from a trip to 
Haiti, where I witnessed the tremendous devastation, destitution, and 
desperation of that country located less than 2 hours by plane from the 
shores of Miami.
  Haiti remains the poorest country in the hemisphere. Democracy and 
political stability continue to elude the Haitian people. The already-
dire humanitarian conditions of Haiti's 8.2 million people continue, 
tragically, to deteriorate. Today, less than one-half of their 
population can read or write. The country's infant mortality rate is 
the highest, by far, in our hemisphere. At least 23 percent of the 
children up to age 5 are malnourished. Only 39 percent of Haitians have 
access to clean water, and diseases such as measles, malaria, and 
tuberculosis are epidemic.
  Haiti is also suffering from an AIDS crisis--really an epidemic. 
Roughly 1 out of 12 Haitians is living with HIV/AIDS. This is the 
highest rate in the world, outside of sub-Sahara Africa. According to 
the Centers for Disease Control projections, Haiti will experience up 
to 44,000 new HIV/AIDS cases this year, and that is at least 4,000 more 
than the number expected in the United States. We have a population, 
obviously, a great deal higher than Haiti. They have a population of 
about 8 million people. Ours is nearly 35 times larger than theirs.
  In addition, there are an estimated 30,000 to 40,000 deaths each year 
in Haiti from AIDS. Already, AIDS has orphaned 163,000 children. That 
number is expected to skyrocket to between 320,000 to 390,000 over the 
next 10 years. Haiti also continues to suffer from an unnecessarily 
high HIV transmission rate from mother to child. Some of this is easily 
prevented through proper counseling and medication. Currently, only one 
clinic in Port-au-Prince provides these critical, lifesaving services.
  Indeed, things are bad in Haiti, and they stand to get only worse. 
Right now there is a great deal of money that the international 
community is holding up, awaiting reforms to be made, awaiting the 
Government of Haiti to settle disputes concerning the May 2000 
election. I believe it is correct to withhold that money. But what it 
means is that the only assistance coming from many countries--certainly 
the only assistance coming from the U.S.--is the purely humanitarian 
assistance that does not go through the Government. That purely 
humanitarian assistance has gone down and down and down. We have taken 
it down for the last few years. The prospects are that we will take it 
down again this year. I think that is, quite bluntly, a mistake. It is 
a mistake for us to continue to reduce this humanitarian assistance. 
This is not money that is going to the Government of Haiti. This money 
is going to NGOs, private organizations, charitable groups that are 
dealing directly with the people of Haiti, who are helping with 
agricultural problems and challenges and helping them feed their 
children through school feeding programs and helping them with the AIDS 
problem. All of this work is done directly on the ground by people who 
are making a difference.
  I think we should reconsider our position--the position we have seen 
in the past few years of continuing to ramp down that assistance that 
goes directly to these NGOs and to the people of Haiti. I believe we 
have a moral obligation to stay committed to these people, irrespective 
of what the Haitian Government does or does not do. The reality is that 
we need to increase foreign assistance across the board, not just the 
money that goes to protect the Haitian people but the much-needed aid 
that reaches all corners of the developing world. While we as a Nation 
must project strength, we also must project compassion.
  Quite simply, providing humanitarian assistance is the right thing to 
do. It is also in our national interest to do it.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Alaska is recognized.

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