[Congressional Record Volume 148, Number 12 (Tuesday, February 12, 2002)]
[Senate]
[Pages S597-S612]
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.
       Santorum modified amendment No. 2542 (to amendment No. 
     2471), to improve the standards for the care and treatment of 
     certain animals.
       Feinstein amendment No. 2829 (to amendment No. 2471), to 
     make up for any shortfall in the amount sugar supplying 
     countries are allowed to export to the United States each 
     year.
       Harkin (for Grassley) amendment No. 2837 (to amendment No. 
     2835), to make it unlawful for a packer to own, feed, or 
     control livestock intended for slaughter.
       Baucus amendment No. 2839 (to amendment No. 2471), to 
     provide emergency agriculture assistance.

[[Page S598]]

       Reid amendment No. 2842 (to the language proposed to be 
     stricken by Crapo/Craig amendment No. 2533), to promote water 
     conservation on agricultural land.
       Enzi amendment No. 2843 (to amendment No. 2471), to require 
     the Secretary of Agriculture to provide livestock feed 
     assistance to producers affected by disasters.


                           Amendment No. 2837

  The ACTING PRESIDENT pro tempore. Under the previous order, there 
will now be 40 minutes of debate, equally divided, on the Grassley 
amendment No. 2837.
  Mr. REID. Senator Grassley has arrived now, so debate can begin.
  The ACTING PRESIDENT pro tempore. The Senator from Iowa.
  Mr. HARKIN. Madam President, I wish to make a very short statement 
today. I would refer my colleagues to a lengthier statement I made 
when----
  The ACTING PRESIDENT pro tempore. Who yields time?
  If the Senator will suspend, we are on the amendment. The Senator 
from Iowa, Mr. Grassley, has time. The Senator controls 20 minutes.
  Mr. GRASSLEY. Madam President, I yield the Senator from Iowa, my 
colleague, 3 minutes.
  Mr. HARKIN. I thank the Senator for yielding. I did not think we were 
on the amendment yet.
  Madam President, I will make a statement. I made a lengthier 
statement on Friday when I offered the second-degree amendment for my 
colleague from Iowa, Senator Grassley.
  Farmers and ranchers have long sought a ban on a packer's ability to 
own livestock. The reasons are simple: When packers own livestock, it 
gives them a greater ability to manipulate the market because they 
control the supply, and packer ownership shuts out farmers from the 
market because the packer fills its plant with company-owned animals.
  This past December, the Senate responded to these problems by 
adopting the Johnson-Grassley amendment by a 51-to-46 margin. That 
amendment prohibited packers from owning, feeding, or controlling 
livestock for more than 14 days before processing.
  After that amendment was adopted, the packers created a firestorm 
with a lot of smoke and mirrors about the word ``control.'' They 
somehow argued that the amendment would affect forward contracting and 
marketing agreements, even though the amendment did not affect these 
types of arrangements. Nevertheless, the packers gained some traction 
by the pure repetition of this argument.
  So Senator Grassley, Senator Johnson, myself, and others worked with 
interested groups, such as the American Farm Bureau, to further define 
``control'' so the packers could not even pretend to make the argument 
that the amendment affects marketing contracts.
  This is what the Grassley second-degree amendment does. It makes it 
clear that farmers may still contract for the sale of their livestock. 
The amendment does this by stating that it does not affect 
relationships where the producer ``materially participates in the 
management of the operation with respect to the production of 
livestock.'' We use these words because they are familiar terms to 
farmers and agricultural lawyers. This phrase draws a clear legal line.
  Now about the study. Farmers do not want another study that concludes 
there is a strong correlation between captive supplies and lower 
prices. The USDA has told us this a number of times before. A report, 
released on January 18 of this year, included a 15-page appendix of all 
the previous studies dealing with packer ownership and captive supply. 
In summary, all these reports basically said: As the packer's use of 
captive supplies increases, the farmer's price for livestock decreases.
  So we know the facts. We have had study after study. We know what is 
good for our farmers. The National Farmers Union, the American Farm 
Bureau, and over 100 other farm, commodity, and rural groups are 
supporting the Grassley amendment. They do not want another study to 
tell us what the other studies have already told us. They want to limit 
the packer's ability to manipulate the market; they want a ban on 
packer ownership; and that is what the Grassley amendment does. That is 
why I strongly support it and urge our colleagues to support the 
Grassley amendment.
  I thank the Senator for yielding me this time.
  The ACTING PRESIDENT pro tempore. The Senator from Indiana.
  Mr. LUGAR. Madam President, in a moment the distinguished Senator 
from Idaho, Mr. Craig, will seek recognition on behalf of the 
opposition to the amendment. I ask Senator Craig to control the time on 
our side.
  The ACTING PRESIDENT pro tempore. The Senator from Idaho.
  Mr. CRAIG. Madam President, I understand the time on the Grassley 
second degree was 40 minutes, 20 to each side equally divided.
  The ACTING PRESIDENT pro tempore. The Senator is correct.
  Mr. CRAIG. I thank the Chair.
  I will be brief in the beginning because we have now heard from the 
chairman of the authorizing committee. I share with the chairman the 
kind of frustration to which he has just spoken as it relates to 
livestock prices and transparency and reportability and ownership. 
There is no question that there is concern in the livestock industry.
  I come from a large beef-producing State. I was once a rancher. I am 
very close to the livestock industry of my State. They have spoken to 
me about this. We have talked about the issue.
  Let me take the Senate back before today to December, when I voted 
for the Johnson-Harkin-Grassley amendment. I voted for it because I was 
told these were the words that would deal with concentration or packer 
ownership. I was concerned at that time, but I was also concerned about 
the myriad new tools being used in the marketplace of sales and 
processing and distribution and horizontal and vertical integration and 
regional differences and operational capacities. All of these things 
have really not been talked about by the chairman or by Senator 
Grassley or by Senator Johnson. And all of a sudden a variety of very 
skilled attorneys began to arise and say: Wait a moment. We think there 
is a very real problem, a very real definitional problem as it relates 
to the kinds of concerns that are very real in the marketplace today.
  The chairman talked about a firestorm of concern erupting. You bet 
there was. All of a sudden, what about brand name relationships? What 
about what we call operational capacity in livestock deficit areas, 
where contracting and relationship keeps what we call the throughput of 
a slaughter operation so that we can sustain it and its employees? Had 
that been dealt a fatal blow? Were we really dealing with something 
that maybe we hadn't effectively thought through?
  The firestorm produced a real concern. I worked with Senator Grassley 
in good faith. He has worked in good faith. Out of that, he has 
produced a second-degree amendment to mine.
  My amendment says, let's spend a couple of hundred days, put the 
experts together. Don't tread on ice so thin that we could collapse the 
way the livestock marketing operations work today, the way the new 
relationships that are building dynamics in the marketplace are 
working. They went ahead. Over the weekend a second-degree amendment 
was produced in an effort to try to define what control is, because 
that really is part of the fundamental issue. I could read it. I think 
it has already been read. It will be discussed.
  I believe this, in part, is a rush to judgment to correct a problem 
that is yet not effectively studied and/or defined. I am not talking 
about a study that goes on for year after year. I am talking about us 
coming back next year, having directed USDA in 200-plus days to look at 
the full ramifications of the livestock industry and the slaughter 
operations, the packers, the marketers, the wholesalers, the retailers, 
the brand names, the carcass quality, all of those kinds of things that 
are an integrated relationship in a new market today that producers are 
developing with packers that we are now deciding--or at least some 
are--is a wrong relationship, and somehow we ought to legislatively 
step in and, by law, fix it.

  I am not opposed to fixing something that is broken, but I am not at 
all convinced that it is yet broken. It may be influenced. It might be 
tampered with. I don't know that yet. I think an effective study could 
do that.
  I will agree that a study a few years ago indicated there was 
manipulation

[[Page S599]]

in the market place, there was a minority record that said that captive 
herd and packer concentration in that regard was a problem. At the same 
time, I don't think we rush to judgment here and collapse a marketing 
system that is now growing and creating stability--maybe not the price 
wanted but clearly stability and brand name and quality to the 
consumers of our country that is in reality strengthening the market.
  That is with what we have to deal. I don't believe the second degree 
gets us there. It has not been effectively studied. It is in the eye of 
the legal mind that created it last weekend--not months ago, not with 
hearings, just this last weekend.
  Why don't we take a breather, timeout, 200 days? Examine this 
amendment against the reality of control and market relationships and 
contract relationships, and see if this is where this country wants to 
direct its livestock industry. I would hope not. I hope my colleagues 
will join with me in opposing this second degree and, as a result, 
passing the study dealing with this issue.
  I reserve the remainder of my time.
  The ACTING PRESIDENT pro tempore. Who yields time? The Senator from 
Idaho.
  Mr. GRASSLEY. I yield 5 minutes to the Senator from South Dakota, Mr. 
Johnson.
  The ACTING PRESIDENT pro tempore. The Senator from South Dakota.
  Mr. JOHNSON. Madam President, I thank my friend, Senator Grassley, my 
colleague from Iowa.
  I come to the Chamber to make one final stand for my bipartisan 
amendment that restores fair competition and access in the livestock 
markets. Fifty-one Senators already voted for this provision which 
prevents meatpacker ownership of livestock.
  I greatly respect the right of my colleagues to demand a second vote 
on this issue. That is what we will wind up having today. To clear up 
any question about the intent of our provision, Senators Grassley and 
Harkin have offered a second-degree amendment to the Craig language 
making it clear that forward contracts can be used as a marketing tool 
for both packers and producers under the underlying amendment that was 
passed with 51 votes earlier.
  I don't think there has ever been a serious issue about whether 
forward contracting is permitted under the amendment which we passed 
last December. The leading agricultural experts in the world have 
examined that legislation and have all concluded that, in fact, there 
is no prohibition on forward contracting on the underlying amendment.
  However, this issue has come up. There have been people who have 
raised issues. I think it is a red herring for those who simply do not 
want to roll back the right of packers to own livestock outright, but, 
nonetheless, this additional language is now being offered, and we will 
have this debate this morning and vote on this issue.
  With this additional clarification, we have the support of most major 
farm groups: the American Farm Bureau Federation, National Farmers 
Union, plus many more. However, our colleague from Idaho, who I greatly 
respect, proposes to strike my amendment in exchange for a study on 
these issues. It seems to me that we have had studies enough. The 
Senate Agriculture Committee has held three hearings on concentration 
of livestock markets, packer ownership, and other issues--in June of 
1998, May of 1999, and April of 2000. The problems are clear, and I 
believe they have been demonstrated.
  This amendment applies to hogs, cattle, and sheep. A lot of the most 
recent controversy has been relative to hogs. The percentage of hogs 
owned by packers rose from a modest 6.4 percent only in 1994 to a 
whopping 27 percent only 7 years later in 2001, 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. When packers own their own farms and their own livestock, they 
don't make purchases from farmers who otherwise provide economic 
contributions to our rural communities--to main street businesses, 
school districts' tax base, banks, car dealerships, feed stores, and so 
on.
  Frankly, those opposed to my amendment prohibiting packer ownership 
of livestock simply have a profoundly different vision of what rural 
America ought to be about. I believe we ought to have independent 
livestock producers in a position where there is competition, and they 
can leverage a decent price for their animals. I don't believe the 
future of livestock production in our Nation ought to be a series of 
low-paid employees of the packers on their own land bearing all the 
risk and little of the profit for the production of their animals. That 
is not the direction I wanted livestock production in America to go.
  We had strong bipartisan support for this amendment last December 
when it was brought up. I am hopeful we can retain that support so that 
those of us who have a more optimistic vision of a competitive free 
enterprise and free market economy for livestock producers can in fact 
envision them having more choices and options about how to sell their 
animals and where to sell them.
  History demonstrates that USDA studies simply won't do the work. A 
case in point: USDA failed to take action on a petition with regard to 
packer ownership and captive supply. This petition was submitted in 
October of 1996, initially published in the Federal Register for 
comment in January 1997, hearings were held on September 21, 2001, and 
USDA still has done nothing on this petition.
  Additionally, USDA has failed to hire attorneys to lead 
investigations on competition cases despite the fact that GAO made a 
recommendation and Congress appropriated increased money for this 
purpose.
  USDA has done a lot of studies in the past. They have found a strong 
correlation between increased captive supplies and price.
  However, the studies conducted by USDA have not made a conclusion. 
Rather, they have been indecisive as to action, this is why policy and 
legislation must clarify and strengthen existing law.
  I encourage my colleagues to support the Grassley-Harkin second-
degree amendment.
  Should we vote on Senator Craig's amendment, I urge my colleagues to 
oppose it and put a stop to concentration in the livestock industry.
  Have no doubt about it, this is our opportunity to address the issue. 
Talk is fine. We can do this in 200 days or a year or so down the road. 
The fact is, this is the farm bill. The likelihood of passing this 
legislation as a freestanding bill, with all the controversies and 
lobbying that come into play, is very slight. This is the opportunity. 
We either act in the context of this farm bill or I fear that years 
will go by before we have another opportunity to address the 
integration crisis we have in American agriculture--livestock in 
particular. We will find that the horse is long out of the barn before 
we have another opportunity to address this issue.
  I ask my fellow colleagues to support the underlying amendment 
prohibiting packer ownership of livestock, to support the clarification 
as it applies to forward contracting, and to support Senator Grassley's 
amendment.
  Mr. ROBERTS. Madam President, it is with deep regret that I must rise 
today in opposition to the second-degree amendment offered by my good 
friend from Iowa.
  His intentions are good, but I sincerely believe his amendment will 
have unintended effects that will hurt producers in the long run and 
that could have an unfortunate effect on the livestock industry in the 
United States-- particularly the beef industry in Kansas.
  Kansans are proud of the beef industry and the history it has played 
in our state. From the days of the cattle drives that stretched from 
Texas to Abilene and Ellsworth it has been one of our top industries.
  I have always argued that we need to give our producers every tool 
necessary to compete and that we should carry a big stick to ensure the 
packing industry treats producers fairly.
  Coming from Dodge City, I fully understand the concerns of those who 
are worried about the largest packers having control over the market. 
Prior to a devastating fire in late 2000 at the ConAgra beef division 
plant in Garden City, KS we had all four of the major

[[Page S600]]

meat packers doing business within a 100 mile radius of Dodge City.
  While some argue that the packers have a crippling effect on the 
cattle market, I can tell you that the economy of western Kansas would 
not survive without the beef industry--individual producers, feeders, 
and packers.
  How important is this industry to Kansas?
  Cattle represented 62.6 percent of the 2000 Kansas agricultural cash 
receipts.
  Cattle generated $4.95 billion in cash receipts in 2000. More than 
double that generated by our second largest commodity--wheat.
  Kansas processed 8.21 million head in 2000; grazes 1.5 million 
stockers annually; and, had 1.52 milliion beef cattle in the State on 
January 1, 2002.
  Kansas ranked first in commercial cattle processed in 2000.
  Kansas ranks second in the value of live animals and meat exported to 
other countries at $969.7 million in 2000.
  Kansas ranked second in fed cattle marketed with 5.37 million in 
2000, representing 22.3 percent of all cattle fed in the United States.
  Kansas ranks second, with 6.34 billion pounds of meat produced in 
2000.
  These numbers extend simply beyond the number of cattle we have and 
the producers who raise and feed them. These numbers also represent 
jobs that are the linchpin of many of our western Kansas communities.
  As a couple of examples:
  Farmland Industries employees 5260 people in Kansas in its beef 
packing sector and 850 in pork packing. Most of those jobs are in Dodge 
City and Liberal, Kansas.
  Cargill employees approximately 4500 people. 3600 of these people 
work in its meat and livestock businesses in Leoti, Dodge City, and 
Wichita.
  If those promoting this amendment are wrong, and it indeed does cause 
a restructuring in the industry or forces packers to move from the 
country, the economic impact and ripple effects it could cause would be 
devastating to the Kansas economy.
  Farmland has informed me that it is the legal opinion of their 
lawyers that this amendment would put them out of the beef and pork 
packing businesses. We cannot allow that to happen.
  I am also deeply concerned that this amendment appears to severely 
curtail the ability of producers to enter into producer alliances and 
marketing agreements that allow them to gain additional dollars for the 
livestock they produce.
  Several of these alliances already exist, or are being formed, in 
Kansas. And I have been told that no fewer than 80 are in some stage of 
development throughout the United States.
  One of the most successful of these alliances has been U.S. Premium 
Beef.
  This producer owned cooperative has become one of the most successful 
producer initiated businesses I have ever seen.
  Last year 13,300 head were marketed through USPB each week.
  In fiscal year 2001, USPB cattle earned an average of $18.95 per head 
in premiums over the cash market. The top 25 percent earned a $46 per 
head average over the cash market, the top 50 percent $35 per head, and 
the top 75 percent $27 per head more than selling on the cash market.
  U.S. Premium Beef has informed me that despite the best intentions of 
the authors of this amendment to exempt them from this amendment, USPB 
would also be put out of business.
  I understand the concerns of the supporters of this amendment and 
many producers who argue for its passage. But I also have many 
producers in Kansas who argue against its passage, and I cannot in good 
conscious vote for an amendment that I believe ties the hands of 
producers to compete against the large meat packers and that I believe 
could devastate the beef industry in Kansas.
  I urge my colleagues to vote against the second-degree amendment 
offered by Mr. Grassley and to vote for the amendment offered by Mr. 
Craig.
  Mr. GRASSLEY. Madam President, I withhold instead of my yielding time 
back and forth. Rather than using all of my time, the other side will 
have the last 10 minutes of debate.
  Mr. CRAIG. Madam President, how much time do I have remaining?
  The ACTING PRESIDENT pro tempore. Thirteen minutes, forty-five 
seconds.
  Mr. CRAIG. Let me take just a couple of minutes and then return it to 
Senator Grassley.
  The Senator from South Dakota said studies have languished. Action 
has languished. Action needs to be taken if the studies yield what he 
says they might yield. This is a directive from the Congress to USDA to 
operate in 270 days. It would then not be incumbent upon USDA to act. 
It would be incumbent upon the Congress to act.
  What does my amendment do? It directs that there should be an 
examination of the relationship of livestock as it relates to 14 days 
prior to slaughter, livestock producers that market under contract 
grid, base contracts, forward contracts, rural communities, employees 
of commercial feedlots, livestock producers, and market feeder 
livestock, and feedlot owners controlled by packers, market price for 
livestock--both cash and futures--and the ability of the livestock 
producers to obtain credit from commercial sources.
  What is occurring today under these new relationships with contracts 
is that the producer can take the contract to the bank and get 
financing. That has become an important and valuable tool as it relates 
to a lot of these new relationships. Studies that have been done talk 
about cooperatives and the relationship they now have with marketers. 
They talk about how we deal with brand name products and quality 
control. Those are new relationships that have added value to a 
product. No, it isn't just a simple matter of concentration so defined 
by control. We are talking about a new world in the livestock industry 
and industry planning and adjustments to it.
  Do I like it as a traditional cattleman? Probably not. Do some 
producers? No. Other producers do because they decided to make some 
adjustments and changes. All of that needs to be studied. There has not 
been one hearing on this issue. There has been some study but a limited 
amount of study.
  I think that is really the issue. It is not about USDA not acting. It 
is about the Senate acting when it is properly informed and when we 
have not rushed to judgment over the weekend by trying to define 
something that only one attorney, to my knowledge, has had the ability 
to craft with limited review from anyone else.
  I retain the remainder of my time.
  Mr. GRASSLEY. Madam President, how much time do I have remaining?
  The ACTING PRESIDENT pro tempore. Ten minutes, forty-four seconds.
  Mr. GRASSLEY. Madam President, I yield myself 5 minutes.
  First of all, if you read the history of the Packers and Stockyards 
Act passed roughly around 1920, I believe you will find a lot of the 
same arguments being used against the passage of the original act at 
that particular time as you are now finding used against our efforts to 
modify the act to a small extent.
  We have had a good Packers and Stockyards Act for 80 years. We are 
trying to bring it up to date. It didn't anticipate the control that a 
few packers would have over the livestock industry. We are adjusting it 
to take into consideration new ways of marketing.
  Also, I would ask just my Republican colleagues, not my Democrat 
colleagues--I am not sure exactly which ones I am talking about, but 
there was a group of us who met with the new Secretary of Agriculture 
about a year ago--there were probably 8 to 10 Republican Senators 
present--to give our views on certain issues for her, an incoming new 
Secretary of Agriculture. I don't take notes on these meetings, but I 
remember, to my astonishment, the number of my colleagues who told the 
Secretary of Agriculture as they reflected on the grassroots opinions 
which they received from their constituents that one of the greatest 
concerns was about concentration in agriculture. I will bet the 
distinguished Senator from Michigan, the Presiding Officer, hears that 
from family farmers in Michigan.
  This was not in reference to what I am trying to do today. I don't 
imply that at all. My amendment is not a result of that meeting. But my 
amendment has something to do with the opinion that my Republican 
Senators expressed to the Secretary of Agriculture--that we have to do 
something

[[Page S601]]

to make sure we have more competition in agriculture because of this 
concern about less competition, and particularly because a few packers 
have the vast majority of the slaughter of livestock. That is one 
thing. But it is compounded by their ownership of livestock which they 
can dump on the market on a day they choose to dump it on the market. 
That depresses the market, and the marketplace just does not work.
  I want my Republican colleagues--I do not know who they were, but 
they were from the Midwest and the West--to think of that meeting we 
had with Ann Veneman and the opinions they expressed. I hope they will 
find my amendment in tune with their points of view.
  The other thing I want to make a comment on is the insinuation in the 
Midwest newspapers and by Smithfield's CEO that if this amendment went 
through, they were not going to build any new plants in certain States 
in the Midwest.
  I had an opportunity to have a long conversation maybe about 18 
months ago with Mr. Luter about competition in agriculture. I had never 
met him before. He is obviously a very good entrepreneur and has 
developed Smithfield Foods. Out of that meeting I remember two very 
distinct things he said. He said, first of all, he wanted me to know 
that his view was that family farmers for the most part are not good 
businesspeople and are not very sophisticated. Second, he told me 
something to the effect he--again, I didn't take notes at those 
meetings; this is a recollection. I hope I am not doing him an 
injustice. I am sure Mr. Luter would say that I am. But the second 
point he made was he thinks there should be a lot of pork producers 
across the United States. It is just that they should all work for him 
by feeding his pigs. He has such an arrangement with a lot of pork 
producers.
  That is how he controls the market. He would argue that is how he 
controls the quality. That is how he satisfies the consumer. I am not 
insinuating bad motives that he has as a quality producer of pork. I am 
just saying his attitude is very different from that of the family 
farmer in the United States. Consequently, I hope that is why we can 
get this amendment adopted, because we want to help the family farmers.
  The PRESIDING OFFICER (Mrs. Clinton). The Senator has used his time.
  Mr. GRASSLEY. I yield the floor.
  The PRESIDING OFFICER. The Senator from Idaho is recognized.
  Mr. CRAIG. Will the Chair please tell me when 5 minutes remains on 
our side?
  The PRESIDING OFFICER. Yes.
  Mr. CRAIG. Madam President, let me speak to what Senator Grassley has 
talked to in general because I share his concern. I attended one of 
those meetings with him some time ago and I, as many others, have 
expressed that. My effort today is not to stop what is going on here 
but to better inform us if we are in fact making the right decision. I 
want the family farmer to prosper, and for any packer to suggest that 
family farmers today are less than sophisticated, they don't know the 
family farmer of Idaho, or Iowa for that matter. They are highly 
skilled, professional business men and women--some small, some quite 
large. But they are family farmers who produce the food and fiber of 
our country.
  Here is what I think all of us fail to address, and that is not 
competition in this country as much as competition from foreign 
countries, where we see livestock production and packing increasing 
very rapidly and entering the market both here and around the world. 
The pork industries both in Canada and Brazil, for example, had an 
annual growth rate of 6.5 percent from 1995 to 2000, according to the 
USDA. Both countries already are cost competitive pork suppliers. 
Canada has excess packing capacity and both countries have space for 
expansion.
  Canada, Argentina, and Australia stand to benefit from a less 
competitive United States beef industry. What we are talking about are 
efficiencies and competitiveness, and that is really a part of what we 
have to look at and what my study directs. Are we simply handicapping 
the family farmers? Or should we be working with them to assure that 
they have greater tools of integration, so they can share in the profit 
line instead of simply standing for the highest or the lowest bidder, 
if you will, to take their product?

  Those are fundamental issues that the Grassley amendment does not 
address. He would like to think it does. But to simply arbitrarily 
suggest there is only one problem in the livestock industry today--and 
that is captive herds--is to suggest almost that we ignore all of the 
rest of the tools of integration that are beginning to develop out 
there. I want my cattle men and women and my pork men and women--I have 
little to no poultry in my State--to be as competitive and as 
profitable as possible. But I do know one thing: If you deny these 
efficiencies and the vertical integration to the beef and pork 
industries--there is one industry out there that is vertically 
integrated, and that is the poultry industry--those two industries 
become less competitive while the poultry industry becomes more 
competitive. That is the reality of what we are facing.
  Shouldn't we know about that in detail and shouldn't a study be done 
before we act instead of collapsing the industry after we have acted?
  I retain the remainder of my time.
  The PRESIDING OFFICER. Who yields time?
  Mr. GRASSLEY. Madam President, I yield 1 minute to the Senator from 
Wyoming.
  The PRESIDING OFFICER. The Senator from Wyoming is recognized.
  Mr. THOMAS. Madam President, I worked on this proposition, of course, 
last week. Our purpose, and our goal, is to try to make the marketplace 
more responsive. Our cattlemen take their cattle into a marketplace, 
into an auction market, hopefully, to sell at the best price available. 
Yet we believe sometimes because packers can have their own cattle and 
their own feedlots prior to the time of the market, it affects that 
market, and they can adjust it. We only now have about three packers 
that have 80 percent of the control over this market. This is one of 
the areas that we believe ought to be remedied. We have it in the 
package now, and I certainly support Senator Grassley's amendment. I 
urge our Members to support it.
  The PRESIDING OFFICER. Who yields time?
  Mr. GRASSLEY. Madam President, I yield myself such time as I might 
consume. It is my understanding I have 4 minutes.
  The PRESIDING OFFICER. The Senator is correct.
  Mr. GRASSLEY. Madam President, I also want to take this opportunity 
to, hopefully, get some people who represent big population States to 
look at our amendment. I think it is very much oriented toward helping 
consumers. We have more competition in the processing of livestock, as 
well as helping the family farmer.
  I am offering this second-degree amendment to the Craig amendment to 
clear up any concerns raised by the opposition regarding the word 
``control''. The new language reads that a packer may not own or feed 
hogs or cattle, ``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, so such an extent that the producer is no longer materially 
participating in the management of the operation with respect to the 
production of livestock.''
  The new test established to clear up the question of what control 
means is found in the phrase ``materially participating.'' 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 and there is a full hopper of case law 
clarifying the definition.
  I came to the floor yesterday and explained that all the talk about 
this generating excess litigation, or bureaucracy, or limiting farmers 
risk management options is just talk. It's all blue smoke.
  Some of the packers' allies are already trying to complain that this 
only adds another layer of confusion. That's an absolute lie. What this 
amendment does is crystalize the issue, and this issue is whether 
packers should be packers, or packers should be producers.

[[Page S602]]

  Let me make this clear. The vote this morning is a vote on whether 
packers should own livestock, nothing more and nothing less. If you 
oppose my amendment you support packer ownership. If you oppose my 
amendment you must believe that independent livestock producers should 
compete on an even playing field with corporations that can generate 
hundreds of millions of dollars to compete with farmers. If you oppose 
my amendment you are supporting packer greed versus the independent 
producer's need.
  Ask any independent producer in the United States. If we were able to 
ask them if they think packers should be able to compete with them 
dollar for dollar, who benefits? I realize that AMI has been arguing 
that ``the sky is falling'' is this passes, but what would your 
independent producers really want you to do?
  The revised Grassley amendment will inject greater competition, 
access, transparency and fairness into the livestock marketplace. Small 
and medium sized livestock operations will gain greater access to 
markets that will have greater volume and be subject to less 
manipulation.
  The revised bill clarifies that arrangements that do not impose 
control over the producer can still provide all the benefits of 
coordination and product specification that many ``grid'' marketing 
arrangements desire. We are not limiting independent producers at all, 
only packers.
  I've got letters and endorsements from possibly every group 
interested in this issue that doesn't allow packers to be included in 
their membership. These endorsements come from state pork producer and 
cattlemen groups, to the American Farm Bureau. I have well over 135 
organizations that signed a letter in support of my second degree 
amendment. Just a few of those groups are the: Livestock Marketing 
Association (who stated they would like to voice their strongest 
possible support), National Farmers Union, R-CALF USA, Ranchers-
Cattlemen Action Legal Fund, United Stockgrowers of America, National 
Catholic Rural Life Conference, and the Organization for Competitive 
Markets.
  The packers are an important piece in the rural economy, but only a 
piece, not the whole pie. They think they are the whole pie. The 
question we need to ask ourselves is whether packers should be packers 
or packers should also be producers. Is it our intent to let packers 
compete with producers on an even playing field? Once again, is there 
any question who will lose this competition?
  The reason we keep sows in farrowing stalls is to protect the 
piglets. Sows are extremely important for the health and well-being of 
the piglets, but if we let the sow out of the crate we stand the chance 
of getting the piglets crushed by the sheer weight of the sow, or 
worse, and watch the sow grow fatter. Let's build a strong farrowing 
stall for the packers and facilitate the health and well being of our 
independent producers.
  Support the Grassley second-degree, your independent producers would.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. CRAIG. Madam President, Senator Grassley and I have worked on a 
lot of agricultural issues together and a lot of farm issues together, 
and we are in agreement about 99.9 percent of the time. Today, we 
differ slightly, only in that I want to make sure the step Senator 
Grassley, Senator Harkin, and Senator Johnson are asking the Senate to 
take, which has a direct impact on the livestock marketing industries 
of our country, is the right step.
  They took a step in December only to have a lot of different legal 
minds say: Wait a minute. We think you are wrong or we think it could 
be misinterpreted or we think it could be very destructive to a lot of 
positive relationships that are now building in the marketing between 
the producer and the processor.
  I have read his amendment. It was read yesterday. I am not quite sure 
it achieves what he wants it to achieve as it relates to control. It 
talks about a variety of controls, managerial supervision, control of 
livestock, to such an extent the producer is no longer materially 
participating in the management of the operation ``with respect to, and 
the following.''
  I received a report in the last few days from the Purdue University 
Department of Agricultural Economics. I ask unanimous consent to have 
that report printed in the Record.
  There being no objection, the report was ordered to be printed in the 
Record, as follows:

         Implications of Banning Packer Ownership of Livestock

            (By Allan Gray, Ken Foster, and Michael Boehlje)

       The goal of this paper is to address some of the issues 
     surrounding Senator Johnson's (D-SD) amendment to the Senate 
     Farm Bill (S. 1731, The Agricultural, Conservation, and Rural 
     Enhancement Act of 2001) that would make it illegal for meat 
     packers to own, feed, or control livestock more than 14 days 
     before slaughter. There has been much debate of this 
     amendment in the press, and much of the debate centers on the 
     word ``control'' and its likely interpretation in a court of 
     law. These comments address the underlying issues for the 
     motivation and the likely impacts of this proposed amendment 
     for the structure of the livestock industries.
     Is defining control important?
       The word ``control'' regardless of its interpretation in a 
     court of law, generates serious concerns. While Fuez, et. al. 
     make arguments that this word could eliminate marketing 
     contracts, Harl, et. al. argue that, in a court of law, 
     control would be interpreted as ownership and would not ban 
     marketing contracts. The issue at hand seems to be that the 
     concept of ``control'' is, in fact, subject to 
     interpretation. The degree of uncertainty surrounding the 
     interpretation of the word ``control'' will lead to increased 
     uncertainty about legal business structures and likely 
     increased litigation. These factors will increase 
     transactions costs in livestock industries making them less 
     competitive against other protein sources in both domestic 
     and export markets. If the natural economic tendency is 
     toward tighter alignment of the livestock value/supply chain, 
     as will be argued later in this paper, then packers will move 
     toward tighter vertical linkages without actual ownership if 
     the amendment is enacted. This tendency to push for tighter 
     alignment may be interpreted as control without a more 
     explicit definition and will most assuredly lead to 
     litigation. Thus, the word ``control'' should be defined more 
     explicitly in the legislation or eliminated to avoid the 
     uncertainty and the increased litigation that would follow if 
     it is not defined.
       Having addressed the issue of defining control, there are 
     three other factors that should be explored regarding the 
     impacts of this amendment and whether it can be expected to 
     achieve its intended goals. First, the motivation of packer 
     ownership of livestock should be explored to determine 
     whether it is a demand driven issue or a market power issue. 
     Second, whether this amendment would result in producers 
     maintaining their independence or if some other, more tightly 
     aligned interdependent, governance structure would result 
     needs to be examined. Finally, the impacts of this bill on 
     producers and packers that are located in isolated or 
     ``fringe'' regions should be considered.
     Is packer ownership of livestock (vertical integration) 
         driven by packers trying to respond to market demand and 
         economic forces, or is it driven by packers exercising 
         market power?
       The U.S. livestock industry is a mature industry that 
     delivers products to a set of customers with rising incomes 
     who demand a more differentiated, higher-value set of choices 
     in their proteins. In addition, the marketplace is 
     increasingly concerned about food safety and the ability to 
     trace any contamination to the root source. This argument 
     suggests that the market pressures placed on the industry to 
     deliver more differentiated, higher-value, traceable protein 
     products is a key driver in the development of tighter 
     vertical linkages in the livestock industry.
       A more tightly aligned livestock supply chain allows the 
     industry to be more responsive to consumer needs, providing 
     growth for its products in mature markets and increasing 
     efficiency. By increasing vertical coordination (whether 
     through vertical ownership or contracting), the industry 
     increases the ability of information to flow quickly and 
     unambiguously along the supply chain (in essence through 
     quantity and quality purchase orders), allowing for quick 
     responses to changes in consumer preferences through new 
     requirements and specifications rather than trying to attract 
     change through price incentives alone. In addition, the 
     packing industry has large investments in fixed assets that 
     are most economical when operated at full capacity. The best 
     way to assure full capacity and better flow scheduling, and 
     better match consumer or retailer quantity and quality 
     requirements, is to develop tighter vertical coordination. 
     Thus, the industry can improve its competitive position 
     through better inventory management that arises from vertical 
     control. Finally, the shared information, learning capacity, 
     and financial gains from vertical coordination may lead to 
     more rapid technological adoption and enhanced efficiencies 
     for the industry, which leads to more affordable and/or 
     desirable products for consumers over time.

[[Page S603]]

       Risk in the livestock industry is another important driver 
     of increased vertical coordination. When markets are less 
     coordinated, the market signals and production activities may 
     be less aligned. This misalignment can lead to wide savings 
     in inventories and prices creating a higher degree of 
     variability in income for farmers and packers. Increasing 
     vertical coordination can reduce misalignments that lead to 
     higher variability. In addition, the sharing of risks and 
     rewards in coordinated systems may be different than in an 
     ``open'' market. Research has shown that producers producing 
     under production contracts (a form of packer ownership) 
     receive lower returns on average than their ``open'' market 
     counterparts. However, this same research indicates that the 
     variability of returns for producers in production contracts 
     is substantially lower than the variability of their 
     counterpart's returns. This reduction in risk could be a 
     substantial benefit to some producers--these risk reduction 
     benefits would be reduced by the proposed amendment if it 
     prohibits production (not marketing) contracts, which is 
     likely.
       An alternative argument for the increase in vertical 
     coordination is that packers are exercising their ability to 
     control the price of live animals. This argument contends 
     that packers have market power in the industry and thus 
     can squeeze producer's margins when they are more 
     vertically aligned. Most studies have found little 
     evidence that packers are exercising pure market power in 
     the live animal markets. However, there is some research 
     suggesting that packers might strategically use captured 
     supplies (company owned or contract produced animals) to 
     reduce the number of animals that they purchase from the 
     open market without risking capacity utilization 
     shortfalls; the result of this behavior is lower live 
     animal prices, than would have otherwise prevailed, on the 
     open market. However, if packers have this so-called 
     monopsony power, it is unlikely to disappear under the 
     terms of the proposed amendment. If there exists 
     substantial market power, then packers will likely find 
     ways to exercise it via exploitative marketing contracts 
     that fit within the bounds of the proposed amendment. If 
     the problem in the livestock industry is one of market 
     power, and it can be documented, then it is an issue of 
     anti-trust and not one of industry structure. Furthermore, 
     the market power of packers is unlikely to be 
     significantly impacted by banning packer ownership of 
     cattle.
       In summary, there is a sound argument that vertical 
     coordination in the livestock industries is driven by changes 
     in consumer demand to deliver high-quality, differentiated 
     products to the market place, and to improve the risk/reward 
     sharing between producers and packers in the industry. This 
     amendment would simply eliminate one form of vertical 
     coordination for delivering products to consumers and would 
     be unlikely to impact the market power of packers. In fact, 
     the amendment could, at the margin, increase the packers 
     market power since it would likely lead to an increase in 
     contracting, placing more of the ownership of specific assets 
     in the hands of producers where they are more likely to be 
     exploited by packers. The new market would be one for 
     contracts rather than for live animals, and with more 
     producers seeking those contracts the potential for packers 
     to extract price discriminating rents from the producers is 
     not likely to decrease.
     Would this amendment have an open access market with 
         production through independent producers, or would it 
         lead to some other form of supply/value chain governance 
         structure?
       The argument above is that tighter vertical alignment 
     through ownership and/or contractual arrangements is 
     primarily driven by the need to meet consumer demands and 
     lower cost. If this is the case, it is unlikely that this 
     (assuming control is not defined as amendment eliminating 
     detailed quality and quantity specified procurement/marketing 
     contracts) would curtail the industry's move towards tighter 
     vertical alignment. That is, this amendment is unlikely to 
     preserve the ``independence'' of the livestock producers.
       The benefits of tighter vertical alignment can be obtained 
     through two forms of supply/value chain governance. The first 
     form would be through vertical integration or ownership. This 
     has been the primary choice of the poultry industry, which is 
     widely credited with being more responsive to customer's 
     needs that has led to increases in the demand for poultry 
     products at the expense of beef and pork. Packer vertical 
     integration in the pork and beef industries is relatively 
     small when compared to the broiler industry. The latest 
     statistics show packer ownership in beef to be between 5 
     and 7 percent while pork is closer to 20 to 25 percent. 
     However, more than 74 percent of hogs were marketed 
     through some form of vertical coordination in 2000. Thus, 
     while this amendment would eliminate vertical integration 
     in its purest form (i.e., ownership of livestock raw 
     materials), it is unlikely to reverse the trend toward 
     tighter alignment in the livestock supply chain and re-
     establish the dominance of independent producers of 
     livestock and open access market coordination between 
     producers and packers.
       Since this amendment would eliminate the possibility of 
     vertical integration (at least, backward integration by 
     packers), the other choice of governance structure to obtain 
     some of the benefits of vertical alignment is through 
     contracts. However, the economic pressure will likely be to 
     create very tightly controlled contracts with a limited set 
     of ``preferred suppliers.'' This limited set of preferred 
     suppliers would consist of producers with the ability to 
     deliver the quality and quantity of livestock needed by the 
     packer to take advantage of the economic forces in the market 
     place. This set of ``preferred'' suppliers would have an 
     extremely close relationship with the packer and would, in 
     effect, act as an agent or franchisee for the packer, more or 
     less imitating the vertical integration structure.
       This change in the structure of the livestock industry is 
     at best a marginal change from the currently emerging 
     structure. While it is likely that this amendment would shift 
     some of the margins in the industry towards producers, it is 
     likely that these margins would be collected by relatively 
     few select producers ``hand chosen'' by packers. This leaves 
     most other producers in an unchanged situation with limited 
     access to markets and the necessity to sign contracts (albeit 
     with production companies rather than packers) that more or 
     less specify their production practices and who may own the 
     livestock.
     Would packers and producers in areas with limited livestock 
         production and only one or two packing facilities suffer?
       It seems likely that livestock production in fringe areas 
     could suffer under this amendment. As stated previously, the 
     fixed cost nature of the packing industry requires a high 
     degree of capacity utilization to achieve profitability. In 
     ``fringe'' areas where livestock production is limited, 
     packers may need to own a portion of the livestock production 
     to maintain an economically feasible throughput in their 
     plants. By eliminating ownership, these plants may have no 
     alternative but to shut down or be sold at a loss. Because of 
     the limited production and packing capacity in these regions, 
     farmers would likely have to cease operations as well. Thus, 
     it would appear that this bill might favor the regions where 
     production is most concentrated, at the expense of less 
     concentrated areas of production.

  Mr. CRAIG. They say the definition of control is in the eye of the 
beholder and ultimately in the eye of the court, and that is where I 
believe this relationship will go if it is a mandate of Federal law. We 
must know where we are going. Is it only an updating of the Packers and 
Stockyards Act? I think not. I think it is an entirely different 
relationship of which we need to be clearly aware. When we are talking 
competitiveness, I want ranchers of Idaho to be as competitive as 
possible.
  What I am frustrated about, and the Purdue University study says it, 
what about the fringe area where there is only one packinghouse? If 
this goes through, are we assuming packers are going to go out and 
build new plants around the West? The West is a fringe area.
  We have heard from my colleagues from Idaho. Idaho and Wyoming fit 
that definition. Our livestock must move elsewhere, or at least to the 
edge of our borders, to be processed and ultimately to be marketed. 
That is why capacity, throughput, all of those kinds of things, through 
contract relationships and owner relationships, has built stability 
within that market--and competition, and I hope pricing. If I am wrong, 
the study will prove it.
  This is the first time we have directed USDA to look straight at this 
issue, not around the issue, not about market manipulation but the 
reality of the current market and changing those relationships, and the 
impact those changes would have on the profitability of the livestock 
industry, primarily the beef and the pork industry. The poultry 
industry is already fully integrated, and we compete, if one is a beef 
producer or a pork producer, directly with that industry. Therefore, 
efficiencies must be such to create the profitabilities for a kind of 
effective competition. That is the reality of the issue we face.
  I hope my colleagues vote down the Grassley amendment and recognize 
that my amendment is not ad infinitum. It is 270 days directed 
specifically at USDA, with specifics for that study, and then we come 
back to Congress and the next year the Senators from Idaho, Wyoming, 
and South Dakota can stand in this Chamber and say here are the facts; 
here is what we know we are doing; here is a designer amendment to fit 
the reality of the marketplace, instead of what we believe might be 
true based on what we think exists today.
  I do not want to collapse the livestock industry built on maybes and

[[Page S604]]

mights and possibilities. That is the value of the study.
  I move to table the second-degree amendment, and I ask for the yeas 
and nays.
  The PRESIDING OFFICER. Is there a sufficient second? There appears to 
be a sufficient second.
  The yeas and nays were ordered.


                           AMENDMENT NO. 2533

  The PRESIDING OFFICER. Under the previous order, there will now be 15 
minutes of debate equally divided on the Crapo amendment No. 2533.
  The Senator from Idaho.
  Mr. CRAPO. Madam President, I will take a moment and then yield the 
remainder of my time to Senator Thomas from Wyoming.
  This amendment is simple. It strikes section 215 from the farm bill. 
Section 215 contains provisions that would require a landowner who 
seeks to participate in a portion of the acreage of the CRP to give up 
his or her water rights either temporarily or permanently. Those kinds 
of efforts to increase Federal intrusion and Federal control over water 
management are simply unnecessary and inappropriate. Under the law as 
we now have it, this very successful conservation program would be 
hooked not only to the Endangered Species Act, which is something that 
has never been done before under the farm bill, but also to a 
requirement that landowners must yield their water rights to the 
Federal Government in return for the right to participate in this very 
popular and successful conservation program.
  This is an unnecessary intrusion of Federal law into the arena of 
inserting the Endangered Species Act into the farm bill and is an 
unnecessary intrusion of Federal law into management of State water 
rights. For that reason, I encourage the support for this amendment.
  I yield the remainder of our time to Senator Thomas from Wyoming.
  The PRESIDING OFFICER. The Senator from Wyoming is recognized.
  Mr. THOMAS. Madam President, I thank the Senator from Idaho for the 
work he has done in this area. His background--as a matter of fact his 
legal background--much of it is in the water rights area. So he 
certainly brings to this Chamber a good deal of not only interest but 
also knowledge and insight, and I thank him for that.
  I rise to support the Crapo amendment in this instance. I think it 
has a great deal to do with the West, a great deal to do with our 
traditional use of water. There are, I believe, major concerns behind 
this idea of the water conservation program. It could result in 
permanent acquisition of water rights. It preempts State water rights. 
It extends authority over endangered species to USDA which, of course, 
is a different operation than we have had.
  Endangered species is a very interesting and important aspect to land 
and water management in the West. It proposes a radical change to the 
CRP, the conservation reserve, without addressing reforms to ESA, the 
Endangered Species Act. Interestingly enough, the concept was never 
discussed in our committee, and I think it makes it more difficult and 
less practical to bring it up for debate that way.
  I am a member of the Agriculture Committee and can attest to the fact 
it was never debated there. I am quite sure had it been, there are 
several members of the committee who represent States that experience 
real problems with how this would impact our lands, and we would have 
vigorously fought to keep it out.
  The allocation of water in the West is done by the States. This is a 
real tradition and an important States rights issue to us. This is a 
precious commodity a producer has, and the States vigorously defend any 
effort that would reduce their rights to make the water 
allocation. This new water conservation idea is another example of the 
Federal Government treading on State water rights. For my constituents, 
the compromise reached allowing the Governors to opt in is certainly 
not enough.

  One of the real difficulties is the possibility that it could result 
in permanent acquisition of water rights. Program enrollment language 
does not mention what happens to water upon termination. That is very 
important.
  A provision claims it is not intended to preempt State water. 
However, if that is the intention, safeguards need to be made. They are 
not there.
  The involvement with the Endangered Species Act, without addressing 
reform of ESA is very important to those in the West. The jurisdiction 
over endangered species is under the Department of the Interior. 
Changing this, then, places a new provision under the Secretary of 
Agriculture. Obviously that is a conflict.
  Certainly those in the West--and I just returned from home over the 
weekend--have strong points of view about it. Many say if this Reid 
amendment is included, they do not want a farm bill. That would be a 
shame.
  I yield to my friend from Montana.
  Mr. BURNS. I thank my friend. Madam President, how much time remains?
  The PRESIDING OFFICER. Two minutes.
  Mr. BURNS. How much on the other side?
  The PRESIDING OFFICER. Seven and a half minutes.
  Mr. BURNS. Madam President, I raise two points. Members on this side 
of the issue spend a lot of time talking about ``shadows.''
  Senators have to ask themselves, why is this in this bill, No. 1; 
and, No. 2, why is it important? What is the reason for it? Have we 
been given a reason why this was in this legislation when it was 
offered as a stand-alone bill? It did not even gain enough recognition 
to have a hearing in committee and now we are going to put it into law. 
I want the other side to defend why they want this piece of 
legislation. Why do they want this section? I don't want Members to go 
back to the cloakroom or offices and turn off the TV and not listen to 
this. I have not heard one reason why it is important to anything that 
has to do with the production of food and fiber.
  It is in there to leave us to fight it. What are we fighting? We 
don't know. I have not heard anybody come down here and do that. I was 
gone yesterday and they probably did discuss it and I probably missed 
it, but nonetheless these ears and these eyes have not heard or seen 
the reason for this legislation or this section to be in this piece of 
legislation and what it has to do with food and fiber production and 
the security of the American people to have their grocery stores full.
  That does not make a lot of sense to me. We are going to vote on it.
  The PRESIDING OFFICER. Time controlled by the Senator has expired.
  The Senator from Nevada.


                    Amendment No. 2842, As Modified

     (Purpose: To promote water conservation on agricultural land)

  Mr. REID. Under the agreement from last night, I send a modification 
to the desk.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment will be so modified.
  (The amendment is printed in today's Record under ``Amendments 
Submitted.'')
  Mr. REID. Madam President, I have spent a great deal of time in the 
last several days speaking to my friend from the State of Idaho, 
Senator Crapo, who is a water expert. He was a water attorney before he 
came here. We have had some fruitful discussions. I have spoken to many 
other people in an effort to try to alleviate some of the fears people 
have. They are fears.
  I have come to this Chamber on several occasions to explain to people 
we have a new West. Nevada is an example. Seventy percent of the people 
live in Las Vegas, 20 percent live in the metropolitan Reno area, with 
only 10 percent of the people living outside those two metropolitan 
areas. The land is no longer controlled by the miners and ranchers. I 
have great respect for them. My father was a miner. I know how much the 
ranchers have contributed to the welfare reform of the State of Nevada. 
I am doing everything I can to help them, but there is a new reality 
out there.
  When we start talking about changing grazing--I have been here before 
and talked about doing that--as I discussed on Friday, people have 
serious fears. But they are hearing and talking about things that do 
not exist. This is an effort to alleviate some of the fears people 
have. That is what the modification is about. It applies to the States 
of California, New Mexico, Oregon, Washington, Nevada, Maine, and New 
Hampshire. It is too bad it does not apply to everybody else, but there 
are fears people have. By the time it comes around

[[Page S605]]

next time, they will see that the other States will be fighting to get 
in it.
  With all due respect to the Farm Bureau, they are the ones in 
opposition. Every environmental group in America supports this 
legislation. It is legislation that explicitly prohibits the Federal 
Government from holding or buying or leasing water rights. A farmer 
doesn't have to sell water in order to participate. This amendment is 
not only supported by the environmental community but the International 
Association of Fish and Wildlife Agencies. For those Members who are in 
favor of shooting, hunting, and fishing, this association represents 
all State fish and game departments across the country. They support 
this effort.
  The League of Conservation Voters will score this amendment. Everyone 
should understand they score very few amendments, very few votes during 
the year. They are scoring this one. Everyone be aware of that. They 
support this amendment because it helps States and farmers ease water 
conflicts by getting farmers income support in drought years and water 
to endangered fish in other years.
  A colleague last week said my water program reminded him of Mark 
Twain. Mark Twain once said of the West: Whiskey is for drinking and 
water is for fighting. If they succeed in striking my language, they 
will be responsible for making sure that is the way things remain. It 
should not be. A vote to support my motion to table Crapo is a vote to 
relieve conflict, not create it.

  The modified amendment replaces the existing program with pilots. The 
pilot programs use conservation money and it puts this money into the 
hands of States and gives them discretion in how to spend it to solve 
their water conservation problems. It takes nothing away from the 
States as far as water. The first pilot expands a successful 
partnership with the Department of Agriculture's Conservation Reserve 
Program and the State of Oregon to restore habitat and to lease water 
to help the fish. Under the Conservation Reserve Enhancement Program, 
States can submit plans to the Department of Agriculture to target 
resources for restoration.
  The Department of Agriculture brings CRP funds to the table and 
States or nonprofits bring additional funds to get the work done. 
Today, 17 States have the programs to better target Department of 
Agriculture funds to resources of State concern. This amendment 
codifies a plan in existence in the State of Oregon. Under that plan, 
USDA can pay farmers irrigated rental rates if they transfer water to 
the State under the plan. But farmers can enroll in the plan even if 
they do not want to transfer water. This provision reserves 500,000 
acres of land for this purpose.
  The second provision creates a new water benefits program under this 
program. The State could help farmers and ranchers fund irrigation 
efficiency measures, willing farmers could convert from water-intensive 
crops to less water-intensive crops--I repeat, willingly; no one forces 
them to do anything--and to lease/sell options or sell water.
  Most Western States already have programs similar to this but this 
Federal money will bolster these programs. We have included language to 
make certain Eastern States are eligible for these programs as well.

  There was concern by my friend from Wyoming that the Endangered 
Species Act would raise its ugly head. The Federal Government has never 
confiscated CRP land from endangered species. There is no reason to 
think they would do so now.
  But, if a farmer is concerned about it, he has two choices: A farmer 
could say I am not going to participate or he can get a safe harbor 
agreement from the State and the Interior Department. It has been done 
before. These assurances tell landowners who enter into agreements if 
they help us restore habitat, whether by dedicating land for a time 
period or transferring water, at the end of that period they get the 
land or the water back. It is an established program that has existed 
for almost 3 years. It gives the good-guy participants in programs such 
as these the assurance that they will not be penalized under the 
Endangered Species Act for helping fish and wildlife for a time.
  Remember, my amendment prohibits the Federal Government in any way 
from holding, buying, or leasing water rights. How many times do I need 
to say that? People keep coming in and saying the Federal Government is 
going to steal water thus. I repeat, my amendment says the Federal 
Government will not hold, buy, or lease water rights; No. 2, farmers 
who want to participate in these program do not have to sell their 
water to do so; No. 3, States are given the lead role in deciding what 
water conservation options they want help funding, and this farmer 
participation is voluntary.
  Finally, these programs provide a substantial amount of funding to 
help support farmer income in drought years and get water to the fish 
in those years.
  Has my time expired?
  The PRESIDING OFFICER. The Senator has 17 seconds.
  Mr. REID. It has expired. When all time has expired, I want to move 
to table.
  Mr. CRAIG. Parliamentary inquiry: The author of the amendment has 
just modified his amendment. Is it my understanding the Crapo amendment 
to strike still pertains to the modified amendment or is it to the 
original? What will be the circumstance of this vote?
  The PRESIDING OFFICER. The Crapo motion to strike still applies to 
the underlying section of the substitute, which is now subject, as 
well, to the modification.
  Mr. CRAIG. So the amendment to strike covers all action including the 
substitute language the Senator from Nevada has just offered?
  The PRESIDING OFFICER. That is correct.
  Mr. CRAIG. I thank the Chair.
  Mr. REID. I say to my friend from Idaho, it is my understanding--I am 
going to move to table Senator Crapo's striking amendment--how that is 
decided will determine what language remains.
  I think all time has expired. I move to table the Crapo motion to 
strike. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. HATCH. Mr. President, I rise today to express my full support for 
the amendment by Senator Crapo, which I have cosponsored. The purpose 
of this amendment is to strike section 215 of the farm bill, which we 
are considering today in the Senate. This section would create a 
program allowing the Federal Government to purchase the water rights of 
farmers and others for the purpose of protecting the habitat of certain 
endangered or threatened species.
  While protecting the habitat of threatened species is a worthy goal, 
one which I have supported, this amendment has the unacceptable 
consequence of putting in jeopardy our system of State water rights. 
Let me elaborate. Under this program, private landowners, tribal 
groups, farmers and other organizations who participate would be 
required to sell or lease their water rights to the Federal Government. 
I strongly oppose using federal dollars to establish an incentive for 
private entities to give up their water rights. The Federal Government 
has tremendous financial resources and, given free reign, could buy up 
unlimited acre-feet of precious water in the West. As some of my 
colleagues already know, Utah is the second driest State in the Union. 
Water is the lifeblood of Utah, and it is in short supply.
  It was only a matter of hours after the first pioneers entered the 
Salt Lake Valley that they began to break up the dry desert, plant 
seeds, and dig irrigation canals, bringing the precious water from 
Utah's snowy mountains to their thirsty lands. It was these farmers--my 
ancestors--who made Utah blossom like a rose. The families of those 
original pioneers and their limited water resources have continued to 
keep Utah's agricultural industry strong. But it has not been easy. 
This program will create an incentive to strip Utah's farmers of the 
very thing that makes their livelihood possible.
  Although the program is said to be voluntary, even farmers who choose 
not to participate in it could experience a number of adverse effects 
because of the participation of a neighbor. Erosion or additional weeds 
and dust resulting from the disuse of adjoining land--because of this 
program--or the introduction of species listed

[[Page S606]]

under the Endangered Species Act to these program lands could have a 
negative impact on the livelihood of neighboring farmers.
  I am also concerned that section 215 makes considerable changes to 
existing programs without a proper discussion of those changes in the 
relevant committees. For example, it creates an unprecedented link 
between the Endangered Species Act and farm programs. From what I have 
seen, when the goals of the Endangered Species Act and the needs of 
farmers come into conflict, the species wins and the farmer loses. I am 
also concerned with the language of this provision that appears to 
create a new ``sensitive species'' category for protecting wildlife. 
Finally, I am concerned that this language gives powers to the 
Secretary of Agriculture that have previously only been held by the 
Secretary of the Interior. This is yet another major policy shift. 
Changes of this magnitude should not be acted on by the full Senate 
without the benefit of committee hearings. I urge my colleagues to 
support Senator Crapo's amendment to strike this section 215 from the 
Farm Bill until such time that further light can be shed on its 
implication for farmers. And I remind my colleagues that the Farm Bill 
is meant to help our farmers, not hurt them.


                           Amendment No. 2839

  The PRESIDING OFFICER. Under the previous order, there will now be 15 
minutes of debate equally divided on the Baucus amendment No. 2839. Who 
yields time?
  Mr. LUGAR. Madam President, I suggest the absence of a quorum with 
time to be charged equally to both sides.
  The PRESIDING OFFICER. Without objection, the clerk will call the 
roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. BAUCUS. Madam President, I ask unanimous consent the order for 
the quorum call be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BAUCUS. Madam President, I rise today to again discuss an 
amendment that would provide desperately needed disaster assistance for 
America's farmers and ranchers.
  I would like to begin by thanking my colleagues, Senators Enzi, Reid, 
Burns, Landrieu, Dorgan, Johnson, Conrad, Carnahan, Dayton, Stabenow, 
Lincoln, Levin, Murray, and Cantwell, for cosponsoring this measure.
  This amendment extends to the 2001 crop the same agricultural 
disaster programs that have proven crucial to American farmers in 
recent years.
  The amendment provides $1.8 billion for the Crop Disaster Program and 
is intended to cover quality loss due to army worms, $500 million to 
the Livestock Assistance Program, with $12 million directed to the 
Native American Livestock Feed Program and $100 million toward the 
apple market loss assistance program.
  Agricultural producers desperately need these disaster programs. 
Adverse weather conditions have pushed farmers, ranchers, and rural 
communities to the brink of economic disaster.
  These adverse weather conditions came on the heels of sharply 
escalating operating costs due to higher energy and fertilizer prices.
  With weather problems continuing, costs rising, and no time to 
recover from the drop in farm operating income, it is incumbent on us 
to take action today.
  President Bush understands the crucial role that agriculture plays in 
America's economy. In a speech delivered to the National Cattlemen's 
Beef Association's Annual Convention and Trade Show in Denver, He said:

       Our farm economy, our ranchers and farmers provide an 
     incredible part of the nation's economic vitality. If the 
     agricultural economy is not vital, the nation's economy will 
     suffer.''

  We must give rural America the chance to have a vital economy.
  Closer to home, farmers in my State of Montana have compared current 
drought conditions to the dust bowl years of the 1930s. Many have not 
taken out their combine in over a year. When there is no harvest, there 
is no income. And the strain on these rural communities is beginning to 
mount.
  According to Dale Schuler, past president of Montana Grain Growers 
and a farmer in Choteau County, Montana, nearly 2,000 square miles of 
crop in his area of central Montana have gone unharvested. That is an 
area the size of Delaware. And the impact has been horrendous.
  To quote Mr. Schuler:

       Farmers and our families haven't had the means to repay our 
     operating loans, let alone buy inputs to plant the crop for 
     the coming year. I believe that we're set to see a mass 
     exodus from Montana not seen since the Great Depression of 
     the 1930s.

  Chouteau County, the largest farming county in Montana, the last farm 
equipment dealer had no choice but to close his doors, the local co-op 
closed its tire shop, one farm fuel supplier quit, and the fertilizer 
dealers and grain elevators are laying off workers.
  Another farmer from the area, Darin Arganbright, told me that 
enrollment in local schools has decreased by 50 percent in the past few 
years. So we are not only losing our current farmers but our future 
farmers.
  A final point. We need to act now--on the farm bill. Producers are 
making their planting decisions for next year right now. But, without 
these disaster payments, many banks will refuse to provide operating 
loans to producers for this upcoming crop year.
  In Montana, it is anticipated that 40 percent of producers seeking 
operating loans this year will be denied if we fail to provide this 
assistance. Without these loans, many farmers will simply be unable to 
plant, giving up any hope of economic recovery in the near future.
  This would devastate my State's economy and that of the West. Rural 
America needs a boost. And I believe our amendment does just that.
  This measure will provide stimulus our rural communities need to 
survive by extending the disaster relief programs that have been 
critical to shoring up farm income over the last 3 years. This relief 
will allow farmers--and the rural communities that depend upon them--to 
get back on their feet.
  In conclusion, I would like to note that the letters of support for 
this amendment continue to pour in. These include: The National 
Association of Wheat Growers; the National Cattlemen's Beef 
Association; the National Farmers Union; the National Cotton Council; 
the American Farm Bureau; the United Stockgrowers of America; the 
National Barley Growers Association; the U.S. Canola Association; the 
American Soybean Association; the National Sunflower Association; and 
the Northwest Farm Credit Services.
  Our Nation depends on agricultural producers for an abundant, 
affordable, safe food supply.
  Today our Nation's producers depend on us to provide them with much 
needed and overdue assistance. Let's get the job done.
  I reserve the remainder of my time.
  The PRESIDING OFFICER. Who yields time in opposition? The Senator 
from Nevada.
  Mr. REID. Madam President, I ask unanimous consent that the order 
that is now in effect be modified to allow 2 minutes equally divided 
between each vote and that the latter two votes of the three votes that 
will take place be 10-minute votes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. Without objection, the clerk will call the 
roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. LUGAR. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LUGAR. Madam President, I yield myself 2 minutes in opposition.
  I bring to the attention of Senators that, whatever the merits of 
this emergency legislation, the cost of these provisions is 
approximately $2.4 billion. That $2.4 billion would be in addition to 
the $73.5 billion over a 10-year period of time, which is already the 
approximate cost of the bill to say nothing about the so-called 
baseline expenditures--namely, the farm programs which continue, to 
which in the event this legislation passes $73.5 billion would be 
added.
  I think Senators must weigh the fact that the Senate and the House 
voted approximately $5.5 billion last year for emergencies. This is in 
addition to that.
  Members must at some point weigh the consequences of the spending of

[[Page S607]]

which we are involved. This Senator has suggested ways in which this 
bill ought to come in for less than $73.5 billion.
  I simply note that if the passage of the amendment occurs, we will be 
adding approximately $2.4 billion to the tab.
  I thank the Chair. I yield the floor.
  I suggest the absence of a quorum and ask unanimous consent the time 
be charged to both sides.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. KYL. Madam President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Who yields time?
  Mr. LUGAR. Madam President, I yield time to the distinguished Senator 
for whatever he may require.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. KYL. I thank the Senator.
  Madam President, I wish to ask when this body is going to exercise 
some restraint and some discipline. I hear a lot about the deficit and 
how we have to be careful to not spend so much that we go into deficit 
this year. Every time I come to the Chamber, we are voting on yet 
another amendment to spend more money. This amendment would authorize 
$2.4 billion in addition to the $73 billion that already is in the farm 
bill. That is in addition to the $23 billion in emergency ad hoc 
spending that we have spent during the last 4 years. Last year alone we 
authorized $5.5 billion in emergency spending.
  It doesn't seem to me that we have any restraint or any discipline, 
or that we are willing to set any kind of priorities. We seem to be out 
of control with respect to spending. I just ask when we are going to 
say no.
  I want to give my colleagues notice. I am going to tally up all the 
spending that they propose, and when they come to the floor and talk 
about the deficit, I am going to confront them with the spending that 
they proposed.
  Obviously, some things have to be voted on. We, obviously, have to 
support the war on terrorism, and there are a lot of other issues, but 
when we keep adding emergency upon emergency upon emergency spending to 
a farm bill that is already $73 billion, clearly we are not exercising 
restraint.
  I want my colleagues to know what I am going to be doing. If they 
talk about deficit, I am going to talk about the spending they proposed 
above and beyond what is already in this appropriations bill and the 
authorizing legislation.
  I hope my colleagues will vote not to support this amendment for $2.4 
billion in additional spending.
  Mr. ENZI. Mr. President, I rise in support of an amendment that would 
allocate $500 million in emergency spending for the Livestock 
Assistance Program.
  The Livestock Assistance Program, LAP, is an ad hoc program 
administered by the U.S. Department of Agriculture, USDA, through the 
Farm Service Agency. It is available to livestock producers in counties 
that have been declared disaster areas by the President or Secretary of 
Agriculture. It provides financial relief to livestock producers that 
are experiencing livestock production loss due to drought and other 
disasters. Livestock producers in my State of Wyoming have been hard 
hit by drought and the drought outlook for this year isn't optimistic.
  Recently, Wyoming's State climatologist reported that a third year of 
drought is possible. After Wyoming's warmest summer in 107 years, a 
normal year would be a relief, but it wouldn't be enough. Unless rains 
of 125 to 175 percent of normal fall on my State, my ranchers will be 
facing a third year of drought.
  You may not know that in drought, producers usually suffer the loss 
of grazing sources. The Livestock Assistance Program commonly provides 
the means to buy supplemental feed for their livestock. Livestock 
usually require supplemental feeding in the winter.
  The program was not funded in fiscal year 2002 in either the 
emergency agriculture supplemental fiscal year 2002 or the Agricultural 
appropriations fiscal year 2002 bill. This program should be funded 
every year that disaster occurs. For 2001, the funding is long overdue. 
This is a situation where there is no light, just an endless tunnel.
  I believe this program funding is critical to the continuing 
viability of ranches in Wyoming. This amendment would provide short-
term, immediate economic stimulus to Wyoming's agricultural population. 
The program is appropriate for this bill because it upholds the basic 
purpose of the Farm bill: to support American agriculture. This money 
will be spent immediately to support purchases of winter feed for 
livestock.
  In my own State, 2002 is shaping up to be the third year of 
continuous drought. In these conditions, the State's natural resources 
have been unable to recover. In order to conserve these resources, the 
State and Federal Government have evicted ranchers from State and 
Federal leased lands. Producers have been forced to find alternative 
grazing arrangements where pastureland is limited. Many producers 
grazed hay fields last summer and fall that had been slotted to provide 
winter feed. Virtually every indicator, precipitation, snow pack, and 
reservoir levels, show the drought may get worse.
  The Secretary of Agriculture designated counties in my State as 
drought disaster areas months ago, but my producers still haven't seen 
the assistance that should accompany that designation. This amendment 
provides assistance. I urge my colleagues to pass this amendment.
  The PRESIDING OFFICER. Who yields time?
  The Senator from Montana.
  Mr. BAUCUS. Madam President, I would like to say a couple of words 
with respect to my friend from Arizona saying that he is not going to 
vote for $2.4 billion because $5 billion was already spent for 
emergencies.
  A couple of points: Implied in his remarks was that we should support 
emergencies. He mentioned terrorism. He didn't mention al-Qaida, but he 
implied it. That is correct. We have an emergency. We need additional 
national security dollars to confront that emergency.
  I say to my good friend that we have another emergency. The emergency 
is the drought. It is crop losses due to weather conditions. It is an 
emergency. You can't predict it. It happens. The $5 billion my good 
friend referred to is in every category. That was added on because 
farmers are losing their shirts under ``freedom to fail.'' That had 
nothing to do with disaster or weather conditions. It had nothing to do 
with an emergency, a national security emergency, or a weather-related 
agricultural emergency.
  We need to take care of and support people who are adversely affected 
by emergencies.
  Madam President, I reserve the remainder of my time.
  The PRESIDING OFFICER. The Senator from Indiana.
  Mr. LUGAR. Madam President, I yield myself time in opposition.
  Let me respond to the Senator from Montana. To equate the national 
emergency this country faces in its war against terrorism and al-Qaida 
and an agricultural emergency is to stretch things quite a bit. I 
understand the desire of colleagues to send money to farmers and 
ranchers around the country. I would simply point out that in this 
particular calendar year agricultural income is a positive $59 billion 
in this country. It was, in fact, higher than it has been for several 
years. The net worth of farms in this country increased this year as it 
has at least for the last 3 or 4 years as land values increased 
substantially.
  Let me point out that there may be reasons for specific tailoring of 
various projects in various areas, but agriculture in America does not 
face an emergency. Agriculture in America faces at least a point in 
which our legislation might create problems. I have suggested the 
problems that will be created are incentives for overproduction, almost 
a guarantee of lower prices, and almost a guarantee that Members of the 
Senate will come here reflecting on the lower prices and wonder why 
that happened but suggest that we spend more money in order to 
counteract our own policies.
  I appreciate that Senators vote generally on the merits of all the 
elements of the bill, but the particular area in

[[Page S608]]

which we are dealing--that of agricultural payments--leaves us very 
vulnerable, I believe, to fiscal mismanagement, to lower prices, and to 
a trust that has been betrayed with regard to good judgment in farm 
policy.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. BAUCUS. Madam President, we have a little time, so we can have a 
little more debate.
  Farmers across America strongly support additional aid to our 
military to protect our national security. That is a given. It is 
absolute, automatic. But there are also farmers who have suffered 
tremendous losses.
  I ask my good friend from Indiana to visit, at least Montana and he 
will see thousands of square miles of dust. That is a disaster. There 
are no combines, nothing. I have walked through those fields. It 
happens in other parts of the country, too, whether it is from storms 
or floods or pest diseases.
  The Senator's problem is with the farm bill; it is not with disaster 
assistance payments. We are now focused and voting on a disaster 
assistance payment. That is entirely separate from the farm bill.
  So I urge my colleagues to step up and do what is right and support 
the farmers who are facing these emergencies. I tell you, they are in 
dire circumstances. We are losing people in our State of Montana. We 
are a special State, granted. We do not have a lot of other industries. 
But other farmers in other States are also facing the same problems, 
but sometimes from different kinds of disasters, not necessarily always 
from a drought.
  I must say to my good friend, 50, 75, 80 percent of the States in 
this country are suffering from a drought, let alone other disasters.
  I urge my colleagues to just give farmers a chance. If they have a 
problem with the farm bill, then they should offer amendments to the 
farm bill, not the disaster assistance program.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. KYL. Will the Senator from Indiana yield me another 2 minutes?
  The PRESIDING OFFICER. The Senator has 50 seconds remaining.
  Mr. LUGAR. Madam President, I yield the Senator the 50 seconds.
  Mr. KYL. I thank the Senator.
  Later on I am going to offer an amendment--a sense-of-the-Senate 
amendment--to express ourselves on the question of the permanent repeal 
of the death tax. I daresay most farmers and ranchers in this country 
would rather see the absolute permanent end of the death tax than they 
would another handout from the U.S. Government.
  So I ask my colleagues to stop and think for a minute about whom they 
are really helping. If they are willing to support their constituents, 
their ranchers and farmers, then I think they will want to support me 
in the repeal of the death tax far more than to vote for yet one more 
annual subsidy for emergency relief.
  The PRESIDING OFFICER. Time has expired.


                       Vote On Amendment No. 2837

  Under the previous order, the question is on agreeing to the motion 
to table the Grassley amendment.
  The yeas and nays have been ordered. The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. REID. I announce that the Senator from West Virginia (Mr. Byrd) 
is necessarily absent.
  The PRESIDING OFFICER (Mr. Carper). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 46, nays 53, as follows:

                      [Rollcall Vote No. 23 Leg.]

                                YEAS--46

     Akaka
     Allard
     Allen
     Bayh
     Bennett
     Bond
     Boxer
     Brownback
     Bunning
     Cleland
     Craig
     Crapo
     DeWine
     Edwards
     Ensign
     Feinstein
     Fitzgerald
     Frist
     Gramm
     Gregg
     Hatch
     Helms
     Hutchinson
     Hutchison
     Inhofe
     Inouye
     Kyl
     Lincoln
     Lott
     Lugar
     McCain
     McConnell
     Miller
     Murkowski
     Nickles
     Roberts
     Santorum
     Schumer
     Smith (OR)
     Snowe
     Specter
     Stevens
     Thompson
     Thurmond
     Voinovich
     Warner

                                NAYS--53

     Baucus
     Biden
     Bingaman
     Breaux
     Burns
     Campbell
     Cantwell
     Carnahan
     Carper
     Chafee
     Clinton
     Cochran
     Collins
     Conrad
     Corzine
     Daschle
     Dayton
     Dodd
     Domenici
     Dorgan
     Durbin
     Enzi
     Feingold
     Graham
     Grassley
     Hagel
     Harkin
     Hollings
     Jeffords
     Johnson
     Kennedy
     Kerry
     Kohl
     Landrieu
     Leahy
     Levin
     Lieberman
     Mikulski
     Murray
     Nelson (FL)
     Nelson (NE)
     Reed
     Reid
     Rockefeller
     Sarbanes
     Sessions
     Shelby
     Smith (NH)
     Stabenow
     Thomas
     Torricelli
     Wellstone
     Wyden

                             NOT VOTING--1

       
     Byrd
       
  The motion was rejected.
  Mr. HARKIN. I move to reconsider the vote.
  Mr. GRASSLEY. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, I ask that the Senate adopt the Grassley 
amendment. It is my understanding that would be the next thing in 
order.
  The PRESIDING OFFICER. If there is no further debate, the question is 
on agreeing to amendment No. 2837.
  The amendment (No. 2837) was agreed to.
  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
2835, as amended.
  The amendment (No. 2835), as amended, was agreed to.


                Amendment No. 2842, as further modified

  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, I have spoken to the manager of this 
legislation, Senator Lugar. I have spoken to Senator Crapo. I want to 
add the word ``only,'' to make clear eligible States under this program 
shall include only--and then it lists the States. The word ``only'' is 
added.
  The PRESIDING OFFICER. Is there objection?
  Mr. HELMS. Mr. President, I ask the Senator from Nevada to restate 
his request. I could not hear him.
  Mr. DOMENICI. Reserving the right to object, I note I was not here 
yesterday, nor was I in the Senate this morning. So I did not get to 
work on the amendment that my good friend from Nevada is offering in 
which he wants to change one word. I note all States similar to New 
Mexico have been exempt. I do not understand why Senator Bingaman went 
along with the amendment. States in similar water situations--New 
Mexico, Idaho, California, Oregon, and Washington--are all excluded. 
Senator Bingaman has concurred that we be in it and that is why he is 
going to be for the amendment. I think that is a mistake for New 
Mexico. I wish I had more time to try to convince him and the Senate, 
but we are now going to vote to include New Mexico while the other 
Rocky Mountain States made a deal to be excluded, and our Senator is 
going along with them, without my understanding because I just arrived 
this morning.
  I have no further reservation.
  The PRESIDING OFFICER. Is there objection?
  The Senator from Nevada.
  Mr. REID. So that Senator Helms could understand, I am adding the 
word ``only'' so it is very specific. Senator Kyl and others wanted me 
to add that language, and I have done that.
  The PRESIDING OFFICER. Is there objection to the modification? 
Without objection, it is so ordered.
  The modification is as follows:
       Eligible States under this program shall include only 
     Nevada, California, New Mexico, Washington, Oregon, Maine, 
     and New Hampshire.


                           Amendment No. 2533

  The PRESIDING OFFICER. Under the previous order, there are 2 minutes 
equally divided for debate prior to the vote on the motion to table the 
Crapo amendment. Who yields time?
  The Senator from Idaho.
  Mr. CRAPO. Mr. President, this amendment seeks to strike section 215 
from the bill. I encourage all Senators not to support the motion to 
table. The issue is very simple. We have very important and strong 
conservation programs that have been historic parts of the farm bill. 
They are critical to our environment and to the conservation in our 
country. This amendment seeks to attach to that an effort to manage 
water under the Endangered Species Act in a way which would give 
further

[[Page S609]]

Federal control over what has traditionally been a State prerogative: 
The management, allocation, and use of water. It is critical we not 
start mixing our domestic farm policy with issues of Endangered Species 
Act management and with issues of States water rights management, 
allocation and use.
  I encourage all Senators to oppose the motion to table.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. The motion to table is something that is wanted by the 
conservation communities throughout America. Every environmental group 
supports this effort. The organization that represents all of the State 
fish and game departments across the country, the International 
Association of Fish and Wildlife Agencies, supports this effort. It is 
good legislation. It takes nothing, I repeat nothing, away from the 
States.
  My State is supportive of my effort here. Nevada's former water 
engineer and now the head of our conservation agency helped me write 
this language; he is one of the most conservative people in the State 
of Nevada. This is something that is good for the States. It is good 
for the farm communities. It will allow them to do things they have 
never been able to do before, and the States have programs they could 
afford. This will allow them to do that. This is good legislation. The 
motion to table the Crapo amendment would be for a better farm program, 
and I believe it will lead to passage of this legislation.
  The PRESIDING OFFICER. The question is on agreeing to the motion to 
table the Crapo amendment. This is a 10-minute vote. The yeas and nays 
have been ordered. The clerk will call the roll.
  The legislative clerk called the roll.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 55, nays 45, as follows:

                      [Rollcall Vote No. 24 Leg.]

                                YEAS--55

     Akaka
     Bayh
     Biden
     Bingaman
     Boxer
     Breaux
     Byrd
     Cantwell
     Carnahan
     Carper
     Chafee
     Cleland
     Clinton
     Collins
     Corzine
     Daschle
     Dayton
     Dodd
     Durbin
     Edwards
     Feingold
     Feinstein
     Fitzgerald
     Graham
     Gregg
     Harkin
     Hollings
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerry
     Kohl
     Landrieu
     Leahy
     Levin
     Lieberman
     Lincoln
     Mikulski
     Miller
     Murray
     Nelson (FL)
     Reed
     Reid
     Rockefeller
     Sarbanes
     Schumer
     Smith (NH)
     Snowe
     Specter
     Stabenow
     Torricelli
     Warner
     Wellstone
     Wyden

                                NAYS--45

     Allard
     Allen
     Baucus
     Bennett
     Bond
     Brownback
     Bunning
     Burns
     Campbell
     Cochran
     Conrad
     Craig
     Crapo
     DeWine
     Domenici
     Dorgan
     Ensign
     Enzi
     Frist
     Gramm
     Grassley
     Hagel
     Hatch
     Helms
     Hutchinson
     Hutchison
     Inhofe
     Kyl
     Lott
     Lugar
     McCain
     McConnell
     Murkowski
     Nelson (NE)
     Nickles
     Roberts
     Santorum
     Sessions
     Shelby
     Smith (OR)
     Stevens
     Thomas
     Thompson
     Thurmond
     Voinovich
  The motion was agreed to.
  Mrs. BOXER. I move to reconsider the vote.
  Mr. REID. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. The question is on agreeing to the amendment, 
as modified.
  The amendment (No. 2533), as further modified, was agreed to.
  Mr. SARBANES. I move to reconsider the vote, and I move to lay that 
motion on the table.
  The motion to lay on the table was agreed to.


                           Amendment No. 2839

  The PRESIDING OFFICER. On the next question----
  Mr. BYRD. Mr. President, I urge the Chair to insist on order in the 
Senate.
  The PRESIDING OFFICER. The Senate will be order.
  Senators will clear the well.
  Mr. BYRD. Mr. President, I hope this is not being charged against the 
2 minutes.
  The PRESIDING OFFICER. The time is not charged.
  There are 2 minutes equally divided prior to the vote in relation to 
the Baucus amendment.
  Who yields time?
  The Senator from Indiana.
  Mr. LUGAR. Mr. President, I would mention that emergency programs are 
not new to agriculture. From 1989, that fiscal year, to the present 
time, over $40 billion has been expended in this way.
  During the last 3 years, we have had expenditures of $26.62 billion, 
$14.99 billion, and $11.17 billion. There appears to be a very strong 
trend to try to get outside the so-called baseline, plus whatever else 
occurs in the farm bill for additional expenditures.
  The Baucus amendment calls for $2.4 billion outside the $73.5 billion 
for the 10 years of additional spending in the farm bill or the 
baseline. For that reason, I oppose it. At the proper time I will raise 
a point of order under section 205, but I will wait until we have had 
the 2 minutes expire.
  The PRESIDING OFFICER. The Senator's time has expired.
  Who yields time?
  The Senator from Montana.
  Mr. BAUCUS. Mr. President, people can always use figures. It is true 
that over the entire period of the farm bill that number of dollars has 
been spent. It is also true that some disaster assistance has been 
provided to farmers in the past. But it is not true that we spent $11 
billion this prior year on disasters. Frankly, the last payment was 
only $5 billion, and it was not disaster payments; it was supplemental 
payments because Freedom to Farm was failing.
  This is the first time it applies only to 2001. It would be disaster 
assistance to farmers who suffered disasters in 2001. It is only fair. 
It is only appropriate.
  I might add, there is an $80,000 payment limitation--you can't get 
disaster payments of more than $80,000--which is very low, I might add, 
compared to a lot of disasters that occurred across our country. It is 
only disasters, and very small in comparison to the problems we have 
been facing.
  I urge Senators to support the amendment.
  The PRESIDING OFFICER. The time of the Senator has expired.
  Mr. LUGAR. Mr. President, has all time expired?
  The PRESIDING OFFICER (Mr. Edwards). All time has expired.
  Mr. LUGAR. Mr. President, the Baucus amendment contains an emergency 
designation. Under section 2035 of H. Con. Res. 290, the fiscal year 
2000 budget resolution, I raise a point of order against the amendment.
  Mr. BAUCUS. Mr. President, pursuant to section 904 of the 
Congressional Budget Act of 1974, I move to waive the applicable 
sections of that act for the purposes of the pending amendment, and I 
ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The question is on agreeing to the motion. The clerk will call the 
roll.
  The assistant legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from New Mexico (Mr. 
Domenici) is necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The yeas and nays resulted--yeas 69, nays 30, as follows:

                      [Rollcall Vote No. 25 Leg.]

                                YEAS--69

     Akaka
     Allard
     Baucus
     Bayh
     Bennett
     Biden
     Bingaman
     Bond
     Boxer
     Breaux
     Burns
     Byrd
     Campbell
     Cantwell
     Carnahan
     Cleland
     Clinton
     Cochran
     Collins
     Conrad
     Corzine
     Craig
     Crapo
     Daschle
     Dayton
     Dodd
     Dorgan
     Durbin
     Edwards
     Enzi
     Feinstein
     Graham
     Grassley
     Hagel
     Harkin
     Hatch
     Hollings
     Hutchinson
     Inhofe
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerry
     Kohl
     Landrieu
     Leahy
     Levin
     Lieberman
     Lincoln
     Mikulski
     Miller
     Murray
     Nelson (FL)
     Nelson (NE)
     Reed
     Reid
     Rockefeller
     Sarbanes
     Schumer
     Smith (OR)
     Snowe
     Stabenow
     Thomas
     Torricelli
     Voinovich
     Warner
     Wellstone
     Wyden

                                NAYS--30

     Allen
     Brownback
     Bunning
     Carper
     Chafee
     DeWine
     Ensign
     Feingold
     Fitzgerald
     Frist
     Gramm
     Gregg
     Helms
     Hutchison
     Kyl
     Lott
     Lugar
     McCain
     McConnell
     Murkowski
     Nickles

[[Page S610]]


     Roberts
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Specter
     Stevens
     Thompson
     Thurmond

                             NOT VOTING--1

       
     Domenici
      
  The PRESIDING OFFICER. On this vote, the yeas are 69, the nays are 
30. Three-fifths of the Senators duly chosen and sworn having voted in 
the affirmative, the motion is agreed to. The point of order falls.
  Mr. LUGAR. Mr. President, I move to reconsider.
  Mr. REID. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
2839.
  The amendment (No. 2839) was agreed to.
  Mr. REID. Mr. 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.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, we are on the farm bill now. Having 
completed our votes on all these amendments, the Senator from Kentucky, 
Mr. McConnell, is here to offer an amendment. He said he would take 5 
or 10 minutes. There is work being done by the managers to see whether 
or not that amendment would be acceptable. They will work on that 
during the party recesses. When Senator McConnell finishes his remarks, 
I ask unanimous consent that the Senator from New Mexico, Mr. Bingaman, 
be recognized for up to 10 minutes to speak as in morning business, and 
then following that we would stand in recess for the party conferences.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Kentucky.


                Amendment No. 2845 to Amendment No. 2471

  Mr. McCONNELL. Mr. President, I have an amendment at the desk, No. 
2845. I call it up and ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows.

       The Senator from Kentucky [Mr. McConnell] proposes an 
     amendment numbered 2845 to amendment No. 2471.

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

 (Purpose: To reduce certain commodity benefits and use the resulting 
                savings to improve nutrition assistance)

       On page 128, after line 8, add the following:

     SEC. 1____. REDUCTION OF COMMODITY BENEFITS TO IMPROVE 
                   NUTRITION ASSISTANCE.

       (a) Income Protection Prices for Counter-Cyclical 
     Payments.--Section 114(c) of the Federal Agriculture 
     Improvement and Reform Act of 1996 (as amended by section 
     111) is amended by striking paragraph (2) and inserting the 
     following:
       ``(2) Income protection prices.--The income protection 
     prices for contract commodities under paragraph (1)(A) are as 
     follows:
       ``(A) Wheat, $3.4460 per bushel.
       ``(B) Corn, $2.3472 per bushel.
       ``(C) Grain sorghum, $2.3472 per bushel.
       ``(D) Barley, $2.1973 per bushel.
       ``(E) Oats, $1.5480 per bushel.
       ``(F) Upland cotton, $0.6793 per pound.
       ``(G) Rice, $9.2914 per hundredweight.
       ``(H) Soybeans, $5.7431 per bushel.
       ``(I) Oilseeds (other than soybeans), $0.1049 per pound.''.
       (b) Loan Rates for Marketing Assistance Loans.--
       (1) In general.--Section 132 of the Federal Agriculture 
     Improvement and Reform Act of 1996 (as amended by section 
     123(a)) is amended to read as follows:

     ``SEC. 132. LOAN RATES.

       ``The loan rate for a marketing assistance loan under 
     section 131 for a loan commodity shall be--
       ``(1) in the case of wheat, $2.9960 per bushel;
       ``(2) in the case of corn, $2.0772 per bushel;
       ``(3) in the case of grain sorghum, $2.0772 per bushel;
       ``(4) in the case of barley, $1.9973 per bushel;
       ``(5) in the case of oats, $1.4980 per bushel;
       ``(6) in the case of upland cotton, $0.5493 per pound;
       ``(7) in the case of extra long staple cotton, $0.7965 per 
     pound;
       ``(8) in the case of rice, $6.4914 per hundredweight;
       ``(9) in the case of soybeans, $5.1931 per bushel;
       ``(10) in the case of oilseeds (other than soybeans), 
     $0.0949 per pound;
       ``(11) in the case of graded wool, $1.00 per pound;
       ``(12) in the case of nongraded wool, $.40 per pound;
       ``(13) in the case of mohair, $2.00 per pound;
       ``(14) in the case of honey, $.60 per pound;
       ``(15) in the case of dry peas, $6.78 per hundredweight;
       ``(16) in the case of lentils, $12.79 per hundredweight;
       ``(17) in the case of large chickpeas, $17.44 per 
     hundredweight; and
       ``(18) in the case of small chickpeas, $8.10 per 
     hundredweight.''.
       (2) Adjustment of loans.--
       (A) In general.--The amendment made by section 123(b) is 
     repealed.
       (B) Applicability.--Section 162 of the Federal Agriculture 
     Improvement and Reform Act of 1996 (7 U.S.C. 7282) shall be 
     applied and administered as if the amendment made by section 
     123(b) had not been enacted.
       (c) Food Stamp Program.--
       (1) Simplified resource eligibility limit.--Section 5(g)(1) 
     of the Food Stamp Act of 1977 (7 U.S.C. 2014(g)(1)) is 
     amended by striking ``a member who is 60 years of age or 
     older'' and inserting ``an elderly or disabled member''.
       (2) Increase in benefits to households with children.--
     Section 5(e) of the Food Stamp Act of 1977 (7 U.S.C. 2014(e)) 
     is amended by striking paragraph (1) and inserting the 
     following:
       ``(1) Standard deduction.--
       ``(A) In general.--Subject to the other provisions of this 
     paragraph, the Secretary shall allow a standard deduction for 
     each household that is--
       ``(i) equal to the applicable percentage specified in 
     subparagraph (D) of the income standard of eligibility 
     established under subsection (c)(1); but
       ``(ii) not less than the minimum deduction specified in 
     subparagraph (E).
       ``(B) Guam.--The Secretary shall allow a standard deduction 
     for each household in Guam that is--
       ``(i) equal to the applicable percentage specified in 
     subparagraph (D) of twice the income standard of eligibility 
     established under subsection (c)(1) for the 48 contiguous 
     States and the District of Columbia; but
       ``(ii) not less than the minimum deduction for Guam 
     specified in subparagraph (E).
       ``(C) Households of 6 or more members.--The income standard 
     of eligibility established under subsection (c)(1) for a 
     household of 6 members shall be used to calculate the 
     standard deduction for each household of 6 or more members.
       ``(D) Applicable percentage.--For the purpose of 
     subparagraph (A), the applicable percentage shall be--
       ``(i) 8 percent for each of fiscal years 2002 through 2004;
       ``(ii) 8.5 percent for each of fiscal years 2005 through 
     2007;
       ``(iii) 9 percent for each of fiscal years 2008 through 
     2010; and
       ``(iv) 10 percent for each fiscal year thereafter.
       ``(E) Minimum deduction.--The minimum deduction shall be 
     $134, $229, $189, $269, and $118 for the 48 contiguous States 
     and the District of Columbia, Alaska, Hawaii, Guam, and the 
     Virgin Islands of the United States, respectively.''.
       (3) Effectiveness of certain provisions.--Sections 413 and 
     165(c)(1) shall have no effect.

  Mr. McCONNELL. Mr. President, this amendment is being looked at on 
the other side, and I am optimistic it will be agreed to and thereby 
hopefully not require a rollcall vote.
  Mr. President, we have made progress in the Food Stamp Program during 
this debate and I rise today to propose two further improvements to 
that worthwhile program.
  President Bush has called for the standard deduction in the Food 
Stamp Program to reach 10 percent of the poverty level in his new 
budget proposal. In other words, if the 10-percent deduction were in 
effect for 2002 a family of four would receive an additional $16 a 
month.
  The present language in the Senate bill does not meet the goal set 
forth in President Bush's 2003 budget.
  I am not asking for increased overall spending levels in the farm 
bill. The offset to my proposed increase in the Food Stamp Program 
would come out of a small cut in price supports and loan rates.
  I am asking that we consider reductions of less than one cent--less 
than one cent per bushel--to the price support payments and marketing 
loan rates in this bill, so that we can continue to address the needs 
of our Nation's poor and disabled.
  We need to complete the task of overhauling the Food Stamp Program's 
standard income deduction.
  The standard income deduction policy affects the eligibility and 
benefit determination of every food stamp applicant. For the last 
several years, the standard deduction has been fixed at $134 for every 
family, regardless of size and regardless of inflation and the 
fluctuating levels of the national poverty level.

[[Page S611]]

  As I mentioned at the outset, we've made some progress on this issue 
during the farm bill debate. The nutrition title as it now stands 
adopts the basic policy model recommended by President Bush in his 
budget and introduced in committee by my colleague Senator Lugar--that 
is, it links the income deduction for basic family living expenses to 
annual poverty levels. By doing so, the amount is indexed by family 
size and reflects annual economic changes.
  As the provision is implemented, food stamp benefits increase 
modestly. The Dorgan-Grassley amendment took the important step of 
phasing in the proposal more quickly, and I applaud them for that.
  I ask, however, that we finish the job and achieve the goal set forth 
by President Bush to raise the standard deduction to 10 percent of the 
poverty level in this farm bill. That is precisely what my amendment 
will do.
  Under my amendment, over the next 10 years, there will be an 
additional $500 million in the hands of needy families with children. 
That's $50 million more per year.
  Let us remember that half the gains from this change would go to low-
wage working families. In addition, over 99 percent of the gains would 
go to families with children.
  The second Food Stamp Program change in my amendment would remedy an 
inconsistency in the rules that apply to the elderly and disabled. It 
would apply the same assert rule to both populations.
  Given the special needs of our elderly and disabled citizens, Program 
eligibility rules are somewhat more generous in this area. For example, 
these families are allowed to deduct excess medical expenses in the 
calculation of net income.
  With respect to food stamp asset rules, however, the elderly and 
disabled are subject to different policies. Food stamp eligibility for 
households with an elderly member allows assets equal to $3,000, but 
asseets for the disabled can't exceed $2,000.
  There seems no good reason for such an inconsistency. Both kinds of 
families face special needs. Further, the distinction for only this 
policy creates confusion for low-income families and increases the risk 
of errors for States.
  I ask our colleagues to support these improvements to the Food Stamp 
Program. The total cost of both provisions is $500 million over 10 
years. This is a small price to pay to help the neediest families in 
our Nation.
  My amendment is supported by leading nutrition groups such as the 
Kentucky Task Force on Hunger, the Center on Budget and Policy 
Priorities, the Food Reseaerch and Action Center, and Second Harvest.
  The farm bill is an important safety net for our farmers. Likewise, 
the Food Stamp Program is an important safety net for our country.
  I hope the amendment will be subsequently cleared on both sides.
  The PRESIDING OFFICER. Under the previous order, the Senator from New 
Mexico is recognized.


                           Amendment No. 2842

  Mr. BINGAMAN. Mr. President, I thank the assistant majority leader 
for his help in providing me time to explain a vote we cast fairly 
recently.
  Senator Reid proposed a second-degree amendment to the farm bill 
which I supported. The amendment would be a substitute to the water 
conservation provision contained in section 215 of the underlying bill. 
I have reviewed the amendment that Senator Reid offered and that the 
Senate adopted. I believe it is good law, it is good policy, and it is 
a substantial improvement over the original proposal. So I did support 
it. I think it is a constructive proposal.

  Section 215, as originally conceived, sought to provide direct 
Federal assistance to farmers by allowing the Federal Government to 
lease or acquire water rights on a willing seller basis to use as part 
of a plan to protect and recover certain species and certain habitat. 
That is a worthy goal, but as in all water-related issues--and we know 
this in New Mexico perhaps better than in most parts of the country--
the devil is in the details.
  On close review, valid concerns were raised. No. 1 was whether the 
program would be conducted pursuant to all applicable State law; No. 2, 
what would be the implications of Federal ownership of Federal water 
rights; No. 3, what was the correct linkage between the Conservation 
Reserve Program and the Endangered Species Act.
  So to address these problems, we agreed--this was before Christmas, 
before the end of the session last year--to prohibit the application of 
the section 215 water conservation program in any State in which the 
Governor had not formally agreed to the program being used.
  This change, however, although it was a substantial step forward--I 
thought, again, it was a constructive way to proceed--it was considered 
insufficient to address the needs of some States, such as my State--
States that wanted to make use of the program but were still concerned 
about the issues I have mentioned--these concerns about Federal 
ownership of water, in particular. Fortunately, Senator Reid was 
agreeable to making changes in that language and we were able to adopt 
a much-improved version of the amendment just in the last few minutes.
  The amendment that has now been adopted addresses many of the same 
conservation goals by utilizing two State-based water conservation 
programs. The first program, which is a water conservation reserve 
program, would fund States that submit proposals seeking to enroll land 
in a conservation reserve or to acquire water rights to advance the 
goals of Federal, State, tribal, or local plans to conserve and protect 
fish and wildlife.
  The second of the two programs that are provided for in Senator 
Reid's new amendment is a water benefits program under which 
participating States can develop a plan where willing water users are 
offered assistance or compensation for several different water savings 
options, such as irrigation efficiency improvements, converting from 
water-intensive to less water-intensive crops, leasing or selling water 
rights--again, not to the Federal Government, but to the State. Quite 
simply, the original concept has been converted into two programs that 
are State based and State controlled.
  Under the new amendment, there is no possibility of the Federal 
Government buying or leasing water rights. That is prohibited. The 
remaining Federal role is to review the State proposal to ensure that 
they fulfill certain general purposes and to prioritize funding between 
competing proposals in order to get a State plan implemented.
  I think it is appropriate that the Federal Government try to provide 
some assistance to States and to the agricultural community to address 
these difficult needs that arise when the water needs of farmers 
compete with the needs of fish and wildlife. This is particularly true 
where the conflict is exacerbated by Federal laws, such as the 
Endangered Species Act. There are situations all over the West--in the 
Rio Grande Valley in my State, in the Colorado River, all the way to 
the Columbia River--where States, local water users, Indian tribes, and 
other interested parties are sitting down together and jointly working 
out water allocation issues for the benefit of all involved.

  There is no easy solution. In all of those cases where solutions are 
developed, they cost money. Let me mention a specific situation we have 
in New Mexico. The Pecos River flows southeast through New Mexico to 
the Texas border. That major river basin is, unfortunately, close to a 
number of issues that include endangered species needs, drought, and 
the interstate compact with Texas that is the subject of existing U.S. 
Supreme Court orders.
  For all these reasons, our State has had in place a limited program 
to conserve and protect river flows, similar to that contemplated in 
the amendment Senator Reid offered. The situation now, however, is so 
severe that local water users, with the help of the State, with the 
State facilitation, have agreed to new measures, including retiring 
water rights to ensure compliance with existing legal obligations, and 
to avoid having water cut off that is being used for municipal and 
agricultural needs.
  Let me emphasize that this is a locally driven process. The Federal 
Government has not even participated in the discussions. But the 
reality of the new plan, which has been developed locally, is that it 
is going to cost an estimated $68 million. It is unclear and unlikely 
that our State can put together that level of funding. It is quite 
possible that, through the programs we

[[Page S612]]

have included in this amendment, we could provide a very useful tool to 
New Mexico and to the Pecos River Basin. Stakeholders in the basin have 
shown they are willing to make tough decisions to avoid even tougher 
times in the future. The least we can do is try to provide creative 
ways to bring real resources to the table in support of those efforts. 
That is a reason I supported Senator Reid's amendment.
  I know my colleague expressed his dismay that I would agree to 
provide the option for New Mexico to participate in these programs. In 
my view, it would be foolhardy for our State not to have that option to 
participate. There is no mandate that we participate. There is no 
mandate in any of this legislation that any farmer or water user 
participate. But having the option to access these resources, in my 
view, makes a great deal of sense.
  In sum, the amendment Senator Reid proposed, and the Senate adopted, 
may prove to be a very effective tool in helping our constituents to 
deal with the serious water issues they now face. Moreover, the 
amendment addresses the problems identified by the Farm Bureau and 
other entities regarding the existing section 215.
  First and foremost, there will be no Federal ownership of State-based 
water rights as part of the program. Second, the amendment is 
absolutely clear that the program will be implemented as a State 
program, and only implemented if the State chooses for it to be 
implemented. There will have to be complete compliance with the 
substantive and procedural requirements of State water law. Finally, 
although the State may choose to use its program to help alleviate 
endangered species conflicts, this is not the sole basis or the 
application of the program.
  Other wildlife and habitat improvement programs are also allowable, 
and because any water acquisition will be done by the State, Federal 
actions are limited--something that should alleviate a significant 
number of the concerns I mentioned before.

  I believe the statutory language protects the State's laws and 
prerogatives. I believe it protects the prerogatives and rights of 
individual water users. I believe it can be a very useful tool for my 
State of New Mexico. And if there are still problems with specific 
aspects of the language, I am certainly willing to consider working on 
modifications. But it is my strong impression that this is a program 
that could be of great benefit to many States in the West, and we 
should have the option to participate if the State so chooses.
  Mr. President, I yield the floor.
  Mr. REID. Mr. President, I ask unanimous consent that the prior order 
be amended to allow Senator Lugar to speak on the McConnell amendment, 
and when he finishes, we would go into recess for the party 
conferences.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The PRESIDING OFFICER. The Senator from Indiana.
  Mr. LUGAR. Mr. President, I rise in support of the McConnell 
amendment. For a very small reduction in the planned increases to price 
support and loan guarantee rates, two meaningful improvements to the 
Food Stamp Program become possible. A savings, of about $500 million 
over 10 years, is created by reducing rates less than a cent per bushel 
or pound across all crops.
  The application of this savings to the Food Stamp Program fulfills a 
bipartisan goal to further expand the standard deduction provision in 
the current Senate farm bill. In determining the amount of family 
income available for food purchases, all applicant households get the 
same standard deduction for basic living expenses. As my colleague, 
Senator McConnell points out, the amount, $134 per month, doesn't vary 
by family size and hasn't changed in value for a number of years. Since 
the size of the standard deduction affects eligibility and benefit 
decisions, current policy has resulted in an erosion of benefits.
  There is both widespread and bipartisan support for making 
improvements in this policy area. The administration's new budget, the 
Senate Agriculture Committee bill, the House nutrition title, my own 
farm bill proposal, as well as legislation introduced last year by 
Senators Kennedy, Specter, Leahy, Jeffords, Graham, Clinton, Daschle, 
Chafee, and Corzine all propose to tie the standard deduction to a 
percentage of the Federal poverty line.
  Under the Senate farm bill, the standard deduction only reaches 9 
percent of the poverty line, even when fully phased in. The Bush, Lugar 
and Kennedy-Specter proposals, in contrast, take the standard deduction 
to 10 percent of the poverty line over 10 years. The result is a small 
benefit increase. A food stamp family of four would get an additional 
$6 per month compared to the current Senate bill.
  The second food stamp improvement the McConnell amendment makes is to 
modestly expand benefit access among low-income disabled persons. 
Specifically, the amendment would raise the asset ceiling for low-
income families with a disabled member from $2,000 to $3,000.
  Three thousand dollars is the asset limit for families with an 
elderly member. Since both the elderly and disabled face limited 
opportunities to replace assets, it is reasonable to have the same 
ceiling apply. This provision reduces the need for low-income disabled 
persons to spend down savings before becoming eligible for food stamp 
benefits.
  Voting for this amendment is a small gesture that makes a positive 
difference for many and takes a modest step toward repairing the impact 
of substantial budget cuts sustained by the Food Stamp Program in the 
mid-1990s.
  I yield the floor.

                          ____________________