Congressional Record, Volume 148 Issue 10 (Friday, February 8, 2002)

[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.

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

[[Page S525]]

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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