[Congressional Record Volume 148, Number 52 (Wednesday, May 1, 2002)]
[House]
[Pages H2002-H2010]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  PROBLEMS WITH THE FARM SECURITY ACT

  The SPEAKER pro tempore (Mr. Boozman). Under the Speaker's announced 
policy of January 3, 2001, the gentleman from Michigan (Mr. Smith) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. SMITH of Michigan. Mr. Speaker, I am going to spend some minutes 
talking about something that I think is very important to this country, 
certainly important to farmers. That is the new farm bill.
  In 1996, we passed farm legislation that was called Freedom to Farm. 
It was actually a program that phased out government farm program 
payments, and the challenge that we are facing in this country, almost 
everybody wants some of those open spaces, almost everybody in America 
would like the opportunity to have fresh products. In America, we 
appreciate the fact that we have the most healthy, the most low-cost 
food in terms of a percentage of our take-home dollar of any country in 
the world.
  The Freedom to Farm Act passed in 1996 gave farmers a farm payment in 
1996. The total payout amounted to about $6 billion. It phased down the 
payment for each of the next 7 years, in a sense, telling farmers in 
the United States that they are going to have to start producing for 
the market, not for government programs. They are going to have to make 
their best guess on how much of what crop to plant based on the 
information they have for the marketplaces. That is the way that the 
system in America has always worked.
  That is why we have surged ahead economically. We had a system when 
our Founders wrote the Constitution, that the people that work hard and 
try and are most efficient and learn, and put that learning to use end 
up better off than those that do not, and that has been part of the 
motivation in our economy. And it has also been part of the reason our 
farm industry has become probably more efficient than any other 
country, and we are competitive in almost every commodity. If there was 
an open playing field, we probably could compete effectively with most 
countries.
  We are now making a dramatic change to make farmers dependent on 
government farm payments, and we do this in a couple of ways. We 
encourage more production which brings down the price of the commodity 
that they sell, and we say to the very huge mega-farms and large 
landowners with 20,000 acres of farmland or 80,000 or 120,000 acres of 
farmlands, the giants, the corporation-type farms, that we will give 
them a government price support check for every bushel of grain that 
they produce and every pound of cotton that they produce.
  What reaction does that have in the marketplace? It is going to mean 
that there is going to be more production, and the challenges are that 
more production is going to result in lower prices. We now find 
ourselves in the midst in a battle for democracy. Even as the President 
works against the undemocratic axis of evil, he may want to take a few 
moments to counter some undemocratic currents in our own Congress.
  At the conclusion of the conference on the farm bill reauthorization 
that was just completed, H.R. 2646, the conference report was filed 
earlier this morning and it is on the floor tomorrow, I think it is 
clear that the conferees have defied the will of both Houses of 
Congress by perpetuating these unlimited farmer subsidies which will 
allow farms to draw millions of dollars in price support payments. By 
giving these very large farms this kind of unlimited guarantee of a 
government price support, they can farm the program rather than farm 
the products of their soil in relation to the marketplace.
  The purpose of subsidies since farm programs began back in 1933 has 
been to protect family farmers. It was a mistake to get into the 
business of subsidizing every single acre and subsidizing every single 
bushel and every single pound of production, regardless of the 
producer's size and income.

    {time}  1600 By providing unlimited payments, we encourage farm 
operations to get bigger and bigger. About 82 percent, Mr. Speaker, 82 
   percent of all farm production subsidies now go to the largest 17 
                           percent of farms.

  I would like to take a moment, Mr. Speaker, to invite any of my 
colleagues, both who support unlimited payments and those that do not 
support unlimited payments, to come to the floor to talk about this 
issue, because tomorrow we are going to have a recommit vote of the 
agriculture bill. We are going to talk about the agriculture bill, and 
then there is going to be a motion to recommit with instructions that 
some of the provisions of limitation apply to that particular farm 
bill. So it is important that we talk about this today, because under 
the rules of the House, there will not be any debate or discussion 
tomorrow on that motion to recommit.
  Mr. Speaker, this policy of giving most of the farm government 
payment subsidies to the largest farms also puts upward pressure on 
land prices and rents, and, as we mentioned, it contributes to 
overproduction because the largest farm operations can get a guaranteed 
government price on unlimited acres. The result is lower commodity 
prices, driving more family farmers off the farm.
  I see the gentleman from Oregon (Mr. Blumenauer) has arrived in the 
Chamber. I want to yield to the gentleman. I was disappointed that the 
gentleman did not have a chance to present his motion to instruct 
because they very quickly brought to the floor their filing of the 
agriculture bill, which preempted your opportunity to give more 
suggestions to the conferees.
  But, on the other hand, when 265 Members of this Chamber, almost two-
thirds of this Chamber, voted the other week to instruct conferees to 
have some kind of real payment limitations, they disregarded it. It 
approaches arrogance when they say we do not care how most of the 
Members of this Chamber vote or, how many, it was 64 to 31 in the 
Senate, that said let us have real payment limitations. Maybe the 
gentleman's amendment would not have accomplished what we hoped it 
would.
  Mr. Speaker, I yield to the gentleman from Oregon.
  Mr. BLUMENAUER. Mr. Speaker, I appreciate the gentleman's courtesy 
and I appreciate his leadership in focusing America's attention on the 
tremendous lost opportunity that is represented by the agriculture bill 
that has been put before us for a vote tomorrow.
  The gentleman is right, there are issues large and small that 
illustrate the problems with the mindset that we have been greeted with 
the Committee

[[Page H2003]]

on Agriculture in the House in terms of its treatment of the desires of 
these Members.
  I had one little tiny provision that I thought would not be 
particularly controversial that dealt with animal fighting, 
cockfighting, really a sort of barbaric practice, where people watch 
chickens that have been trained to maim each other, to fight to the 
death, where you just have a little pile of feathers and blood at the 
end.
  It is cruel and inhumane to the animals, but it is also part of, in 
many States, illegal gambling operations. It leads to illegal 
activities and violence. That is why we had all sorts of law 
enforcement authorities that wanted it to move forward. It is illegal 
in 47 States. Identical provisions passed in the House and Senate to 
make it illegal to at least transport these creatures across State 
lines, and maybe help law enforcement.
  Mr. SMITH of Michigan. Mr. Speaker, reclaiming my time, would the 
gentleman help me remember and understand. I thought we had provision 
in the farm bill at one time?
  Mr. BLUMENAUER. We did. It passed on the floor to put felony 
provisions for people who would transport these fighting birds, and 
also to export fighting dogs.
  What happened in the agriculture conference committee is that the 
penalty provisions that would have closed the loophole were gutted. It 
went back to a misdemeanor, so it would not be enforced, even though 
identical provisions passed both the House and Senate. Even these 
watered-down provisions are not going to go into effect for another 
year.
  Now I use this just as one example, a little tiny example, that shows 
where the will of the House and the Senate, identical provisions, and 
something, frankly, that the American public would have even greater 
penalty provisions in, it would go farther, they read it in. They cut 
it back. They gutted it.
  It is nothing in terms of the damage that would be done as far as the 
American taxpayer is concerned. The gentleman is absolutely correct, 
and I appreciate it and was pleased to join with the gentleman on the 
floor in his efforts to put a cap on those payments here in the House. 
The gentleman is right, 265 Members voted to instruct, to have the 
Senate's $275,000 payment limit.
  Lo and behold, we get a bill back, it is the new $360,000 limit, and 
all sorts of problems and additional aspects to this that actually make 
that illusory.
  We see example after example where this agriculture bill is a missed 
opportunity. We missed an opportunity, and, if time permits, I would 
like to talk in a few minutes about some of the environmental 
provisions. It is a missed opportunity for the American taxpayer to 
rein in costs. It is a missed opportunity in States like mine where 
there are huge problems with specialty crops, where there are people 
that would exercise better conservation practices if they had a little 
help.
  Mr. SMITH of Michigan. Mr. Speaker, I would like to talk about that. 
The fact is if we had real limits that would include what is called the 
generic certificate, which is the end run, the huge megacorporation 
type farms used to have the million dollar payments, then there is no 
question that we would have a lot more money. The estimate is between 2 
and 4 billion additional dollars to do some of those things.
  I yield to the gentleman from Arizona, Mr. Flake, for he has had some 
concern about the tremendous expansion of government programs.
  Mr. FLAKE. Mr. Speaker, I thank the gentleman for yielding. I 
appreciate the gentleman from Michigan's leadership on this issue and 
the others that have spoken.
  This, it has been said, is the largest expansion of the Federal 
Government domestic program since the 1960s, aside from military 
issues. It is a huge expansion of the Federal Government and little is 
being said about it.
  We are expanding the commodity programs to include for the first time 
apples, peanuts, onions, with little discussion about it at all. It 
simply increases dependency out there among our farmers and it goes 
simply the wrong direction, away from the free market.
  I find it ironic that this bill, at a time that we are supposedly 
embracing free markets around the world, this replaces the Freedom to 
Farm Act, it repudiates it, it sets it aside and replaces it with the 
Farm Security Act. We are trading freedom for so-called security that 
is often illusive.
  We need to know who is receiving these subsidies. That is why I 
appreciate the gentleman from Michigan's leadership on this issue, to 
know that most of the subsidies are actually going to well-off farmers, 
or some who are not farmers at all.
  We know, for example, that Scottie Pippen, that well-known farmer 
from Arkansas, when he is not posting up for the Portland Trailblazers, 
apparently he is digging post holes around his farm in Arkansas. He 
received thousands of dollars in subsidies for either growing or 
agreeing not to grow certain crops. Sam Donaldson, Ted Turner, that 
pauper David Rockefeller is also getting subsidies. We know this 
because people are posting on their web sites, getting through Freedom 
of Information those who are receiving subsidies. Now, we had to fight 
back an attempt this year to actually keep that information public. It 
is so embarrassing that a lot of people want it private again so nobody 
can point out how absurd it is that individuals like this are getting 
subsidies from government.
  We have to recognize that the average American family over the next 
10 years will spend about $1,800 in higher taxes simply to pay for the 
subsidy programs in this bill. Worse than that, that same family will 
pay another $2,500 just in the case of increased food prices because of 
the price supports in this system. That is a total of over $4,000 that 
the average American family will spend because of this bill. That 
simply is wrong and we should not go forward with it.
  I appreciate the opportunity to be here and speak on it.
  Mr. SMITH of Michigan. Mr. Speaker, I hope the gentleman from Arizona 
(Mr. Flake) can stay a little longer so we can talk about some of these 
things.
  I just have a chart here following up on the gentleman's mention. 
Farm subsidies to 12 Fortune 500 companies rose by 82 percent, and here 
are farm payments from these big companies that probably bought some 
extra land, and then they sign up this land to get government farm 
payments. Farm policy should be designed to give these to family 
farmers, not John Hancock Mutual Life Insurance, Westvaco Corporation, 
Caterpillar, Chevron, Georgia Pacific, the Mead Corporation, 
International Paper, Archer Daniels Midland, Boise Cascade, Kimberly 
Clark, Eli Lilly, Navistar. These are the kind of companies that are 
making millions of dollars in their venture as a corporation, but still 
in effect robbing some of the money that otherwise could go to some 
more substantial programs, whether it be environmental and 
conservation, whether it be more money for agriculture research, 
whether it be more money for the small farmers that really need help.
  The gentleman from Wisconsin (Mr. Kind) has been a leader in trying 
to have a farm bill that better protects the environment, the 
conservation effort. I would ask the gentleman from Wisconsin (Mr. 
Kind) to give us the latest word on whether he is going to have a 
motion to recommit tomorrow.
  Mr. KIND. First of all, I thank my friend from Michigan for yielding 
to me and securing time the night before one of the most important 
pieces of legislation affecting rural America and our farmers, the 
agriculture sector, will be coming before us.
  I want to commend my other colleagues here, too, the gentleman from 
Arizona (Mr. Flake) and the gentleman from Oregon (Mr. Blumenauer) for 
the leadership they have shown on the issue and the particular insight 
they have brought to this debate.
  In the past, farm bills have been a tricky proposition to put 
together. First of all, half of the Members of Congress, when you think 
about it, do not have a farm in their entire congressional district. So 
it is hard to engage individual Members of Congress on what constitutes 
the farm bill and the impact it is going to have on budgetary, fiscal 
policy and also rural programs, and, ultimately, support for our family 
farmers across the country.
  We have had a conference now that has been meeting for a period of 
time, and they are reporting out a bill. I, as a member of the 
Committee on Agriculture, and the gentleman from

[[Page H2004]]

Michigan (Mr. Smith) is a member of the Committee on Agriculture as 
well, understand how terribly difficult the process is in a place like 
Congress to formulate a coalition to develop a farm bill given the 
competing interests, the different perspectives from different regions 
of the country, each with their own experiences, each with their own 
interests and insight on what should constitute a farm bill.

  But as someone who has been involved in the process now since all of 
last year, the markup in the committee and watching the conference 
committee do their work, I am a little disenchanted in the way the 
process has ultimately worked. Yes, we are in a political season, an 
election year. That has affected the outcome of the decisions being 
made on that.
  But when you look at the details that are just now emerging, the 
actual letter of the law being proposed, and even a lot of that is 
still unclear, and I think USDA should be very concerned that a lot of 
the provisions have not been clearly defined to enable them to 
implement what is in this conference bill, let alone whether it makes 
good policy, but you are talking about a bill that is going to have a 
huge impact on fiscal policy for this Nation for at least the next 10 
years. We are talking about an additional $73 billion of new money on 
top of the roughly $100 billion that has been spent on farm bill 
programs under the old bill. Yet with these $73 billion of new money, 
roughly 75 percent of that is going to get sucked up in just a few 
commodity crop programs that will only benefit less than, less than, 30 
percent of our American farmers in this country.
  Yet it is being hailed as this great safety net for our family 
farmers across the country. But any bill that comes forward that only 
affects roughly 30 percent and excludes, for all practical purposes, 70 
percent of the American producers in this country hardly constitutes a 
safety net, in my book.
  But there are also very troubling implications, too, with the payment 
limitation caps that are alleged under this bill. Those of us on the 
floor here today brought forward a motion to instruct just a week ago, 
setting a payment limitation cap of $275,000 in a given year for an 
individual entity receiving these type of payments. Unfortunately, even 
though it passed with over 260 votes in the House and it received 
majority support in the Senate, the conferees basically ignored the 
wishes of the majority of Members of Congress in regards to the payment 
caps that we passed on a motion to instruct.
  Not only did they ignore it by increasing that to $360,000, but they 
carved out exceptions that would basically blow the lid off of any 
practical cap or limitation. These are mandatory spending programs that 
we are talking about here that are going to explode in the out years 
and have a devastating impact on fiscal policy in this Nation, not to 
mention distorting the marketplace, because we are paying producers not 
based on market conditions, but based on acreage and what they produce, 
which creates an incentive for them to produce more and more and more, 
which leads to oversupply and then a plummeting of these very same 
commodity prices and us getting in this vicious cycle of these 
mandatory payment programs going out, or, even worse, of having to deal 
with multibillion dollar farm relief bills because of an incentive 
program being created encouraging overproduction.

                              {time}  1615

  So the motion to instruct that we passed with 260 votes would place a 
real payment cap of $275,000, which is still pretty generous in regards 
to these subsidy payments, but also using some of the money that would 
be freed up to go into these voluntary and incentive-based conservation 
programs, a little bit more into the agriculture research programs.
  So we are talking about some value added in creating wealth in the 
farm bill, rather than just direct subsidy payments.
  Mr. SMITH of Michigan. Mr. Speaker, let me just briefly review, or 
sort of give the skinny on what I see happening in the farm bill.
  Senator Byron Dorgan, a Democrat of North Dakota and Charles 
Grassley, a Republican of Iowa, were the leaders over in the Senate 
that said, look, for the long run, long-term good of farmers and farm 
programs, let us put a cap on these multimillion dollar payments that 
are going out to some of these huge mega-farm and landowners. They said 
that there is enough votes in the Senate to recommit with instructions 
that we go back to the original Senate language on payment limitations. 
However, the rules are that if the House passes a farm bill prior to 
the Senate having the opportunity to recommit, then the Senate no 
longer has that opportunity to make a motion to recommit if the House 
passes the bill.
  I suspect that that is some of the reason that our leaders in the 
Conference Committee on Agriculture, our chairman, our ranking member, 
decided to bring this up even before CBO has completed their cost 
estimates to file the bill, to bring the bill to a vote tomorrow.
  In the process of recommitting this bill back with specific 
instructions, that first option goes to the Democrats. Normally, the 
ranking member of that particular committee has a lot of decision-
making ability as to how that works.
  The gentleman from Wisconsin (Mr. Kind) has his motion to reconstruct 
that puts payment limitations on. Can the gentleman give us the latest? 
Will we find out later tonight whether or not the gentleman's motion is 
going to be offered?
  Mr. KIND. Mr. Speaker, if the gentleman will yield, I do have some 
additional information. In fact, I was just recently informed by our 
leadership on this side that we will be offering the motion to recommit 
based on the payment limitation caps. So we will have another chance 
tomorrow to effectuate the end product of this debate, so to speak. So 
I think this is going to be a very important motion.
  Mr. SMITH of Michigan. Mr. Speaker, did the gentleman say that he 
will not?
  Mr. KIND. Mr. Speaker, we will be offering the motion to recommit, 
based on, by and large, the motion to instruct, again that passed by 
260 votes just a little over a week ago.
  Because what we have now is a product that is greased to go. It was 
just filed a couple of hours ago. We are trying to pour through the 
details. We all know the devil is in the details in a lot of 
legislation. It is really in the wording, and what exceptions are 
thrown into these bills that can have a tremendous effect on policy. So 
we are trying to pour through that as quickly as possible.
  But given the fact that the Members of the House and now the Senate 
are on record of supporting a 275 payment cap that has already passed, 
I think we have an opportunity with this motion to recommit to send it 
back to the conferees with these instructions again that this is really 
the will of the majority of Members of Congress, and that they need to 
treat it seriously this time, rather than brushing it off as merely an 
advisory type of motion. So we are going to have to get the word out 
between tonight and tomorrow.


                         parliamentary inquiry

  Mr. SMITH of Michigan. Mr. Speaker, I wonder if it is appropriate, 
during a Special Order, to have a parliamentary inquiry. Is there even 
reproductions of the farm bill that are available for the Members to 
read?
  The SPEAKER pro tempore (Mr. Boozman). There is not a printed copy at 
the desk currently; the conference report is being printed by GPO.
  Mr. SMITH of Michigan. I thank the Speaker.
  So here again is a real problem of asking us to vote on something 
that we are not even going to be able to read. If they give it to us at 
the last minute tomorrow morning, it is my guess that we are looking at 
a bill that is 3 or 4 inches thick, almost impossible, even with a 
group of staff, to try to wade through to find really what was stuck 
into this bill at the last minute for whatever reason.
  Mr. KIND. Mr. Speaker, if the gentleman would yield for one final 
point. I want to be perfectly clear on this point. I represent over 
10,600 family farmers in my congressional district alone. What we are 
proposing here should not be perceived for a second to be antifarmer. 
It is rather how can we help effectuate good farm policy for basically 
the next 10 years.
  There is one crucial aspect in regards to these subsidy payments that 
I think

[[Page H2005]]

a lot of our colleagues have ignored or just overlooked, and that is 
the trade implications. I mean historically, a round of trade 
discussions have usually dealt their fatal blows over disputes over 
farm policy. Now we are starting to hear the rest of the world in a 
single chorus cry out against the tremendous amount of subsidies that 
we are piling on in this next farm bill and encouraging retaliation on 
their part, but even more than that, encouraging bad faith negotiation 
in the next round of trade discussions which are important to our 
family farmers, but also important for economic growth in this country.
  So if we do not get this aspect of the farm bill right in regards to 
our WTO obligations and setting up the next round of trade discussions 
for success rather than failure, this is something that is going to 
come back and haunt us for a very long time, not just on agricultural 
exports, but on a whole range of products that we need market access 
to, and it is going to be very hard to accomplish if this is the 
message that we are sending to the rest of the world, that we are going 
to pile on the subsidies here, virtually unlimited, and yet we expect 
them to open up their markets to our products.
  I thank the gentleman again for this time.
  Mr. SMITH of Michigan. I thank the gentleman. Of course, with the 
rush on this bill, there is a lot of work to do in informing our 
Members of what the gentleman's amendment is, and I think most of us in 
this room are cosponsoring it.
  Mr. Speaker, I yield to the gentleman from Arizona (Mr. Flake).
  Mr. FLAKE. Mr. Speaker, I thank the gentleman for yielding. Just to 
the point of the conferees ignoring the will of the House, there was 
another issue that was brought up. There was a vote on a motion to 
instruct which would instruct the House conferees to accept the Senate 
version with regard to private financing of agriculture exports to 
Cuba. One can argue about the policy there, but the House 
overwhelmingly, 2 years ago, said that food and medicine sales to Cuba 
were fine. All this would say is that private banks here in the U.S., 
if they want to take the risk, then they can lend. Right now it has to 
be done on a cash basis. We had a vote, 272 Members supported it, yet 
the conferees ignored that, and they ignored the Senate as well, and 
that provision is out.
  So I appreciate what the Members here have done, and I just wanted to 
point out that that was another issue where the conferees simply 
ignored what the House felt as a whole.
  Mr. SMITH of Michigan. Mr. Speaker, maybe sometimes too much control 
and ability to have it their own way instead of having it the people's 
way. So hopefully in the future it will change. Earlier I used the word 
``arrogant'' in describing the disregard of conferees to seriously 
consider and look at and, at least in part, put in the will of the 
delegation. I saw in one of our leading newspapers a quote about two 
brothers producing sugar benefit in excess of $400 million, I think 
that was a year, from the production program that we have for sugar. 
Here again, we want our sugar beet farmers to survive and our sugarcane 
farmers to survive, but when it goes to $400 million to a set of 
brothers probably does not help our average farmer very much.
  The gentleman from Florida (Mr. Miller) has been a leader in trying 
to get some equity in trying to keep some industry that is related to 
sugar in the United States, and I yield to the gentleman.
  Mr. DAN MILLER of Florida. Mr. Speaker, it is a pleasure to be here 
with my colleagues today, and I commend the gentleman from Michigan, 
someone who is a real farmer here in Congress, and on the Committee on 
Agriculture, to be able to stand up and say, this is a bad bill. Each 
of us come from different districts, whether it is from Wisconsin, 
where there is a lot of small family farmers, and in my area, we have a 
lot of tomato farms, and citrus is a big area. But even though we do 
not know too much about this bill because it is basically a secret bill 
that we will find out about tomorrow, basically it just helps a limited 
number of people in a limited number of States.
  The problem is that this bill is a total reversal of a philosophy 
that those of us that came together, the gentleman from Michigan (Mr. 
Smith), when we came together with a conservative philosophy to say, we 
need to reduce the size and scope and government, and actually in the 
1996 Freedom to Farm bill, we started to do that. It was a glidepath to 
reduce the role of government and to open up the agriculture market. I 
voted for that bill, but this is a total reversal. Not a total reversal 
in the amounts of money and the programs, but the targeting of other 
specialized programs.
  We got rid of the wool, mohair and honey programs back in 1996. They 
are back. Why are we subsidizing wool, mohair and honey? The peanut 
program is going to cost us billions of dollars. Now, I like peanuts, 
but the problem is we do not need to spend billions of dollars on 
peanuts. I do not grow peanuts in my district and I do not think my 
colleagues here on the floor grow peanuts. But if you grow peanuts, you 
will support this bill. So there is bipartisan support, but there is 
also bipartisan opposition.

  We do not really know the full cost of it. I have been trying to find 
that out, and some are saying it is $171 billion, but we really do not 
know. When we passed Freedom to Farm in 1996, it was projected to cost 
$47 billion. It turns out to be costing $123 billion.
  Now, this bill is supposed to be $171 billion to start with, so it is 
a huge increase over what we passed in 1996, and what happened in 1996 
is any indication, we are into a $350 billion bill and program; $350 
billion. Here we are up here getting ready to go through the 
appropriation process figuring out how to get enough money for Pell 
grants, for prescription drugs, how to have enough money for homeland 
security and taking care of the war on terrorism, and here we are going 
to spend $350 billion on these farm programs over the next year.
  Now, the gentleman mentioned the sugar program. The gentleman is 
correct. This program is getting worse. It was a bad program to start 
with and they made it even worse. It is so bad that last year, the 
Federal Government had to buy $500 million worth of sugar and then had 
to store it. Now we are paying to store the sugar, and we are creating 
a program that is going to have an incentive to produce even more sugar 
and the Federal Government is going to buy more sugar. I do not know 
how we are going to store all of this sugar that is going to be bought 
by the Federal Government over the next years.
  Under trade regulations, Mexico is going to be allowed to sell more 
sugar than the United States. So we are going to be flooded with sugar. 
This bill encourages overproduction, and sugar is just one of the 
programs that they claim does not really cost very much money. They 
claim it was not going to cost anything until last year when they had 
to buy the $500 million worth of sugar. Because what it does is it 
costs jobs. The sugar program, what it does is, it sets an artificially 
high price for sugar in the United States, and what it does is, it 
drives jobs out of this country. The gentleman from Michigan, for 
example, talked about the Lifesaver plant in, I think, Holland, 
Michigan.
  Mr. SMITH of Michigan. Mr. Speaker, the Lifesaver plant over in 
Holland, Michigan, producing pretty much all of the Lifesavers produced 
in the world, has now made the decision, because of the price of sugar, 
that they are going to go to Canada.
  Mr. DAN MILLER of Florida. Mr. Speaker, so they are going to Canada 
for jobs. Sugar is a third of the price in Canada than it is in the 
United States.
  So if someone is, especially in the hard candy area and uses a lot of 
sugar, why not move your production over into Canada, and that is 
exactly what is happening.
  Mr. SMITH of Michigan. Mr. Speaker, that might hit our family farmers 
that are producing sugar even more aggressively than the tariff rate 
quotas that we tried to develop to protect them.
  Mr. DAN MILLER of Florida. Mr. Speaker, the gentleman is right. The 
cane growers are some very, very large corporations like the brothers 
the gentleman mentioned. The beet farmers are smaller farmers up in the 
Midwest and the Dakotas and such, and they really are more family 
farmers, but the big farms, these plantations in Florida, they also 
control, for example, most of

[[Page H2006]]

the sugar in the Dominican Republic. But the Dominican Republic, and 
this is how crazy the program is, they sell sugar around the world for 
maybe 6 cents a pound, but they sell it to the United States for the 
United States price, which is about 20 cents a pound. Absolutely crazy, 
and it is still controlled by the same family that grows it in Florida.
  So, you know, in 1996, one of the classic, most important bills we 
passed was welfare reform, and I think it has been a success. We are 
going through the process of reauthorizing it this year. But what we 
are creating is a welfare program for farmers, and that is unfortunate. 
We want to support the small farm; we want to have the life of the 
farmer to continue as we have known in previous generations, but it is 
becoming big business, and what this bill does is just making it harder 
for the family farmers to survive.
  Mr. SMITH of Michigan. Mr. Speaker, the statistic I think, at least 
for last year, is 40 percent of the net income of farmers came in 
government checks. If farmers do not like it, our goal has to be to 
increase production.

                              {time}  1630

  Mr. Speaker, I yield to the gentleman from Oregon (Mr. Blumenauer) 
for an ``out West'' opinion.
  Mr. BLUMENAUER. Mr. Speaker, I thank the gentleman for yielding to 
me.
  One of the things that I wanted to spend a moment on deals with the 
environmental aspects. The gentleman has been speaking earlier, and I 
think very forcefully, and focusing on how bad a deal this is for the 
taxpayers, the costs that are associated with this. We are going to 
hear in the course of this discussion that this 10-year bill represents 
a quantum increase in conservation.
  Well, we are going to find that virtually all the major environmental 
groups are going to come out opposed to this legislation. Yes, it is 
true that there will be a dollar increase over the next 10 years, and 
it will be a significant increase over the next 10 years.
  But this, put in the context of how great the need is and how much 
money we are going to be throwing at all aspects of the agricultural 
program, this actually represents a retreat. We are going to find that 
as a result of this bill, it will represent a lower percentage of the 
total Federal commitment to agriculture than the farm bill of 1996.
  It has been stated, I think very well, by the Defenders of Wildlife: 
``All the talk of the importance of conservation work has, in the end, 
amounted to a hollow shell of the conservation budget that came out of 
the Senate. The conference report will shrink conservation spending as 
a percent of total farm spending.''
  I would like to talk for a moment, if I could, about some of the 
specifics. We have the Environmental Quality Incentives Program. This 
is very important. It is a way to help deal with the real environmental 
problems that are faced by agricultural producers.
  Under current law, the Environmental Quality Incentives Program, the 
EQIP, is limited to small- and medium-sized producers and restricts 
payments to $50,000 over multiple years. When the House and Senate 
opened this to corporate livestock producers, they argued that, well, 
these payment limits would restrict the large factory farms from 
receiving large payments to clean up their waste and from draining 
money out of the program.
  Well, it was not just the overall caps that the negotiators turned 
their backs on. They turned their backs on the small and medium 
producers when they multiplied the current limit nine times over to 
$450,000 for multiple years.
  The current program has a backlog of almost 200,000 applications for 
small and medium producers. The average payment last year was $9,000. 
Now we are opening the door to large factory farms. We are waving large 
checks in front of Smithfield and Tyson Foods, and we are going to have 
the small producers squeezed to the back of the line. It is going to 
put more and more pressure on them to have to either sell out or 
consolidate. It is an important step backwards.
  Mr. SMITH of Michigan. Mr. Speaker, that is sort of a cue to allow me 
to talk a little bit about how we are putting pressure on the small, 
traditional crop farmer in the United States.
  We passed my amendment to put real limits on and get rid of the 
loophole on a vote of 265 to 158, and we did that on April 18. At the 
time the House motion passed, the chairman of the Committee on 
Agriculture was quoted as saying, ``It will have no bearing on the 
conference,'' and true to his word, with the apparent consent of the 
Senate agriculture committee chairman, the conference report that came 
out yesterday keeps that loophole and bows to the interests of mammoth 
farms and giant grain and cotton dealers who want unlimited price 
supports and the resulting increased production.
  If we asked a grain trader such as Cargill, Archer Daniels, any of 
them, they tend to make their money based on the amount of product 
going through their system, so the more product they have, the more 
money they have.
  So these conferees were under tremendous pressure not only from the 
huge farmers in the megafarms, but also from the grain traders and 
cotton traders that have an advantage with having unlimited payments 
and unlimited price support.
  Now, let me tell Members briefly how the loophole works. Nonrecourse 
marketing assistance loans allow a farmer the choice of repaying 
commodity loans at low local market prices. As an alternative, a farmer 
can forgo loans entirely and simply take the difference between the 
loan rates and the low market prices as a direct cash payment. That is 
called a loan deficiency payment, an LDP.
  Both marketing loan and the LDP benefits are capped in current law. 
They are capped in this bill. Many in the agricultural community, I 
will use the word ``hoodwink,'' hoodwink many in this Chamber and many 
Americans by saying, look, we have a cap on payments. But the fact is 
that there is a loophole. That loophole lets the farmer get around the 
limits through the use of commodity certificates.
  Here is how it works: the generic commodity certificate was initially 
an innovation aimed at preventing a buildup of forfeited commodities in 
government warehouses, so with a nonrecourse loan, a farmer can give 
title of that commodity to the government. The government will give a 
loan to that farmer, and the loan will represent the price support that 
is offered through the LDP, or a marketing loan program, so there are 
the same benefits in terms of the money that farmer now has.

  Where we can limit the amount of cash that can be given to the farmer 
with the marketing loan or the loan deficiency payment, we do not 
limit; and the law allows USDA, the U.S. Department of Agriculture, to 
give that farmer a generic certificate to buy other commodities that 
will result in the same price support benefits as if they got a loan 
deficiency payment. So it is a loophole.
  That is why we have so many of these farm operations receiving 
millions of dollars in payments every year at the same time that some 
brag that there are payment limits and payment caps in the proposal.
  The conferees said, well, we will put in language where we will study 
it. Here is what the study is supposed to analyze.
  Number one, what kind of effect will it have on the grain trade and 
the cotton trade? Well, the effect is going to be if we do not 
encourage more production, there is probably going to be less 
production. That means the grain trade is going to have a few less 
bushels and pounds going through their system, so it is probably going 
to have a little negative effect on their trade.
  But what happens to the price farmers get? With lower production, the 
price farmers get goes up, and we can help many of those family farms 
around the United States and that green and open space, as we talk 
about the environment. We can preserve that land and keep it in 
agriculture, instead of paving it over for development and housing 
projects.
  Our goal and our policy in this country should be to help family 
farms, the traditional family farms. It should not be to give a 
disadvantage to those family farms.
  That is what we are doing. We are saying to this huge farmer that has 
a lower cost of production, we will guarantee you a payment that more 
than covers your variable costs. So that

[[Page H2007]]

farmer says, well, look, I have this protection, so I am going to farm 
the farm program as much as I farm the market and the soil, so they end 
up overproducing.
  That overproduction is getting us into real problems because that is 
part, with our current ability to distribute that food around the 
world, that is part of our problem in bringing prices down to the 
farmers. That is why we are working in the bankruptcy bill to make it a 
little easier for farmers to try to re-form their farmland and have the 
provisions of section 12 in the bankruptcy code.
  Mr. Speaker, I yield to the gentleman from Florida (Mr. Dan Miller).
  Mr. DAN MILLER of Florida. Mr. Speaker, as the gentleman was talking 
about the fact that we are really helping the big farmers, there are 
some interesting numbers that came out of the Heritage Foundation, I 
see today. It says, the top 10 percent of the recipients now get 73 
percent of the money. That has increased from 67 percent of the money 
that goes under the agriculture program.
  The bottom 80 percent, and this is where all our family farmers are, 
now instead of getting 16 percent are going to get 12 percent. The 
money overwhelmingly goes to this top 10 percent, which are the very 
large farms, the ones that make the most money. We want to encourage 
the family farm and support that family farm, but all this is going to 
do is make it more difficult for the family farm to compete with the 
big giants, the agriculture giants in this country.
  Mr. SMITH of Michigan. Mr. Speaker, I see also that this is a problem 
of the survival of the future of farm programs. With all of this 
publicity that is going out, and it does not matter what paper we pick 
up, they now realize that there is a loophole; and the Environmental 
Working Group has passed out the information that a lot of these big 
corporate-type farms are getting a lot of the money.
  I think that is going to come back to hurt the average family farm in 
terms of the kind of programs that we can offer here in Washington, 
D.C., because it is bad publicity, so a lot of people start thinking, 
well, farmers are already rich. They are getting these million-dollar 
payments.
  The fact is exactly as the gentleman suggests, that in our efforts to 
appease these large, influential farms, these large landowners, the 
large grain and cotton dealers, we have come up with a program that 
allows those big farmers the incentive to have unlimited production, 
overproduction, really, if you will. That means that the prices are 
going to go down for everybody else, with more pressure on those 
farmers.
  When push comes to shove in the next 10 or 15 years, when we are 
looking at the survival of Social Security and the survival of 
Medicare, and we say, well, are we going to have to cut off some of the 
farm programs because a lot of people in America say we are giving too 
much money to these rich farmers anyway, what do Members think is going 
to happen?
  What is going to happen is we are going to cut down on farm programs. 
At that time, probably we will cut down on the big, large million-
dollar payments to the big farmers, too. But probably it is going to 
jeopardize the effectiveness of the farm programs for the survival of 
the agriculture industry in the United States. That is one of my main 
concerns.
  Mr. BLUMENAUER. If the gentleman will continue to yield, Mr. Speaker, 
I could not agree more. As someone who comes from an agriculture State 
and somebody who is concerned about the relationship of prime 
agricultural land to our cities, this interface, the urban-rural 
interface, is critical to be able to maintain some of the most 
productive farmland in America.
  Right now, we do not have the tools to help preserve it; and sadly, 
what we have been given from the conference committee makes this 
situation worse. It cuts critical conservation programs by almost $3 
billion from the Senate bill and left out national conservation 
priorities. Even though the number of farmland acres lost to sprawl 
doubled, doubled over the last 6 years, the negotiators, in their 
wisdom, cut $1.25 billion out of the only Federal program to help 
farmers curb sprawl.
  The tension between landowners and Federal agency and conservation 
interests over the endangered species issues have split communities all 
over the country. Yet the Wildlife Habitat Incentives Program was cut 
in half, from the Senate level of almost $1.5 billion to $700 million.
  They dropped key language to address national environmental 
priorities, like reducing runoff to the Chesapeake Bay, and, in my 
region of the Pacific Northwest, missed an opportunity to reduce the 
water use in the Klamath Basin, which has been brought to national 
attention.
  These farmers were promised more by the Federal Government over the 
last century than nature can produce. This was an opportunity to help 
solve the problem and protect the farmers. They turned their back. It 
tilted the new grasslands easement program towards short-term contracts 
instead of permanent easements, even though the overwhelming demand for 
producers is for permanent easements.
  They also failed to adopt Senate language that would have ensured 
conservation programs work in every State and do not discriminate 
against farmers and ranchers in areas with high land values. I just 
find it tragic that our conferees turned their backs on a good product 
that came from the Senate that would have helped farmers in all of our 
communities.
  I would just conclude my portion, Mr. Speaker, to commend the 
gentleman from Michigan (Mr. Smith) and the gentleman from Florida (Mr. 
Dan Miller), with whom I look forward again to working on the sugar 
issue.
  But this legislation that we are going to have before us tomorrow 
represents a sad missed opportunity. It was a lost opportunity for the 
environment, as I have outlined. It was a lost opportunity in areas 
like animal welfare, the fighting birds that I mentioned, or being able 
to take downed animals out of the food chain. It is a food safety, as 
well as a humane, issue.
  This is a lost opportunity for those of us who practice agriculture 
in the West. This is not a good bill for Oregon, Washington, and 
California. It hurts, it hurts the majority of farmers who, as the 
gentleman pointed out, need our help.
  I am hopeful, I am hopeful that this House tomorrow will support that 
motion to recommit to reinstate those limits, to redirect the 
priorities so that we can make a little progress on this important bill 
for the future, not just of American agriculture, but for communities 
from coast to coast, border to border.

                              {time}  1645

  Mr. SMITH of Michigan. Well, I would just call to all our colleagues 
and all staff that might be watching. There is not going to be any 
debate allowed on this motion to recommit that sets real limits that 
this House and the Senate has voted for. That motion will come up 
tomorrow. The failure to include real payments limits in the farming 
bill, I think, is an example of entrenched special interests 
frustrating the will of the majority. The conferees, generally the most 
senior Members of the House and Senate Committee on Agriculture have 
chosen to ignore public sentiment and congressional sentiment in both 
the popular vote in both the House and the Senate in favor of serving 
the largest corporate farms and major grain traders.
  They have also slighted I think our President, President Bush, who 
last August noted the plight of medium-sized farms, and he promised, 
and I quote again the President, ``One of the things that we are going 
to make sure of as we restructure the farm program next year is that 
the money goes to the people it is meant to help.''
  Limiting subsidies for any single farmer is an idea whose time has 
come. If we continue with unlimited government payments under the farm 
bill for another 6 years, we will see increasing concern among the 
American people as farmers with huge land holdings with a lower 
marginal cost of production, pocket an ever-increasing share while more 
small and medium-size farms go out of business.
  The decision for extra production by the very large farmers should be 
based on the market, not on a guaranteed government price. The public 
expects farm policy to focus on helping average traditional size family 
farms. Congress should respect that.
  Mr. Speaker, I understand, the gentleman from Florida (Mr. Miller) is

[[Page H2008]]

considering leaving Congress after this next term. He has been a strong 
voice in an area that usually has not had a voice, and so he certainly 
has the appreciation of me and many Members of this Congress in his 
willingness to speak out on some of these tough issues.
  Mr. DAN MILLER of Florida. Mr. Speaker, let me repeat some numbers I 
said just to confirm what you said about not helping small farmers, 88 
percent of the money will flow to the top 20 percent. The bottom 80 
percent of the recipients that receive subsidies will only get 12 
percent of the money. It is overwhelmingly going to the large farmers. 
And really, basically, 90 percent of the money goes to wheat, corn, 
cotton, rice and soy beans.
  So it is very targeted. Obviously, to get votes they throw in the 
peanut program. A few billion here, a few billion for sugar. They also 
have added in small chick peas. I do not know what they do with big 
chick peas, but small chick peas they will now be subsidized, lentils 
and dry peas. Well, I am really excited. We do not do a lot of small 
chick peas business. We get them in cans in my district. Lentils, 
lentils makes good soup. But why is the Federal Government getting into 
the subsidy business? It makes no sense to keep expanding the size and 
scope of the federal government.
  The Heritage Foundation estimates that this bill will cost entire 
taxes to households $1,805, $1,805 per household is the cost to every 
tax-paying household in this country.
  Mr. SMITH of Michigan. Really, that is essentially through taxes, but 
an increase in the cost of their food. If you add to that maybe some 
production that the market is paying more than it otherwise would, than 
there is even additional costs.
  Mr. DAN MILLER of Florida. It is targeted. And I admire these States 
for having the gumption to go out and fight for it, the Dakotas and 
such.
  Florida does not benefit. But I am not saying we should get it 
because I am a fiscal conservative.
  The tomato people do not get it. The cucumber people, the bell pepper 
people in my district, the orange and grapefruit people, they do not 
get any subsidy check. This is an entitlement they are creating for the 
click pea people and the honey people. It is an entitlement. It is not 
even the discretionary appropriations process.
  Now there are some good things in this bill. I support agricultural 
research. When we look at pests that are brought into this country, 
that we need to find ways to solve those problems and we have that 
challenge in our citrus industry. But the problem we have in this bill 
is it is targeted to big rich farmers and to certain crops in Texas 
where they get cotton and rice, and Mississippi benefits from it. So 
for those few States that is their sugar daddy, but it is wrong for the 
American taxpayer.
  Mr. Speaker, I commend the gentleman from Michigan (Mr. Smith) for 
taking a leadership role in trying to let the American people know that 
this is bad for Congress. This is bad as a Republican and it is just 
bad for the taxpayers of this country.
  Mr. Speaker, I insert in the Record the following article entitled 
``Harrowing U.S. Taxpayers with Ill-Designed Farm Bill.''

          Harrowing U.S. Taxpayers With Ill-Designed Farm Bill

       Committees of Congress last week reached an agreement on a 
     farm bill that could cost as much as $100 billion in the next 
     six years and would increase farm subsidies to $191 billion 
     in the next decade.
       The reconciled farm legislation, which still must pass the 
     full House and Senate, is an abandonment of the policy 
     established in the Freedom to Farm bill passed six years ago, 
     designed largely to end farmers' dependence on subsidies and 
     allow free markets to determine what and how much they 
     planted.
       But every year since 1996 as the economy slowed and prices 
     fell, Congress passed special ``emergency'' measures to keep 
     farmers afloat. Subsidy payments swelled last year to $20 
     billion.
       What's most insulting to taxpayers about the new 
     legislation is that the vast majority of the money the 
     government will pay out does not go to save the fabled family 
     farm, but to increase the profits of big agricultural 
     companies, owners of huge tracts of land that will then use 
     the subsidy payments to buy up the little farms next door.
       In December, President Bush told Congress he wanted to see 
     legislation that provides farmers with a safety net based on 
     savings accounts. He wanted fiscally responsible legislation 
     based on free market principles that would expand 
     international trade. The new legislation fails on all counts.
       The subsidy payments contemplated for commodity crops like 
     wheat, corn and cotton will be based on production--the more 
     you grow, the more money you receive. So of course the farms 
     with the largest number of acres under cultivation will 
     benefit most, receiving money to buy the small farms the law 
     is supposed to protect.
       Think of it. The legislation represents an agreement to 
     subsidize farmers' income at a time when grain and cotton 
     prices are at record lows and production is at an all-time 
     high. Not surprisingly, these crops are grown primarily in 10 
     Midwestern and Southern states that are considered key to the 
     midterm elections as well as the presidential race in 2004. 
     The plan amounts to a renewal of corporate welfare to achieve 
     a quick bump in farm state politicians' fortunes.
       Although the Congressional Budget Office estimates the cost 
     of the measure at $171 billion over 10 years, we don't really 
     know the total cost because it depends greatly on the 
     performance of the farm sector. As the Heritage Foundation's 
     Brian Riedl points out, ``If historical patterns hold and 
     actual agriculture spending ends up double the forecasted 
     level, the farm bill's final cost would increase to $342 
     billion.''
       Consider 1996. As Congress contemplated scaling back the 
     subsidies, lawmakers estimated it would cost some $47 billion 
     between 1996 and 2002. But when commodity prices plunged 
     between 1998 and 2000, Congress instead added $27 billion in 
     emergency payments to farmers. The 1996 law ultimately cost 
     $123 billion.
       Despite these scary numbers, consumers are unlikely to feel 
     the cost, spread out as it is among millions of taxpayers. 
     Nevertheless, it is disgusting to contemplate paying out 
     billions to rich farms owned by agricultural companies. It is 
     reckless to contemplate subsidizing already thriving 
     industries.


                    encouraging yet more production

       The farm bill is based on the premise that a surplus of 
     crops caused prices to drop so low that farmers need 
     subsidies to recover lost income. Yet under the legislation 
     the amount of money handed to a farmer depends on how much he 
     grows--thus encouraging yet more production. Inevitably, that 
     will lead to increased subsidy payments.
       Although the conference bill contains a $360,000 limit, 
     there are so many exceptions that the number is little more 
     than symbolic.
       To be sure, there are some worthy aspects of this 
     legislation. Of importance to Florida is a provision that 
     within two years would require a country-of-origin label to 
     mark meats, fish and fruits and vegetables raised or grown in 
     America. And environmental groups should be pleased with the 
     $17 billion earmarked for conservation.
       But those provisions don't justify a bill that perpetuates 
     misguided and outdated policies. If the reconciled measure 
     reaches the president's desk, he should veto it.

  Mr. SMITH of Michigan. Mr. Speaker, and that is bad for farmers. The 
question is how big is a family farm and Members can get into that 
argument. But the average-size farm in the United States is 460 acres. 
The average size commercial farm that does not have other outside 
income has been reported to be 960 acres.
  How big would it be if we reached the limits that we are calling for 
in this motion that we are passing tomorrow? Using average prices for 
the 2002-01 crop year, it would take 27,392 acres of corn to reach the 
payment cap without the loophole. It would take 11,195 acres of cotton, 
2,683 acres of rice, 5,261 acres of soybeans to run up against the 
limit in the House and Senate bills. Wheat and sorghum farmers could 
harvest an unlimited amount of acreage without reaching the limit 
because average harvest prices exceeded the loan price last year.
  The Congressional Research Service, CRS, also calculated the acreage 
needed to branch the proposed cap based on the lower harvest period 
prices. What farmers do is they try to farm the program. So they get 
the largest government benefit when that daily reported price is the 
lowest. So when the market is the lowest, that is when they want to go 
to their USDA office and say this is the day that I want the difference 
between today's local price and the price that you are guaranteeing me 
for this product.
  So that is going to increase the amount that they get from 
government. And then, of course, they try to sell their commodity 
either on contract or a forward pricing arrangement where they try to 
maximize the market price that they get for that product. So most every 
farmer in the United States ends up receiving more per bushel or per 
pound of that commodity than is called for in the loan price, the price 
support subsidy that is given for commodities.
  Limits on payments are popular with both the public, with this House. 
We

[[Page H2009]]

need to move ahead and pass this motion to recommit tomorrow. I hope my 
colleagues will study this issue. Call any of us on the House floor. 
Call any of the 265 members that voted for an identical provision in 
our motion to instruct on April 18.
  Mr. Speaker, I thank my colleagues for participating.
  Mr. Speaker, I also submit for the Record at this time some 
additional details and language of the price limitation provisions.


                                   Republican Study Committee,

                                                      May 1, 2002.

         Quick Facts on the Farm Security Act Conference Report

       1. Cost: Condenses the approximately $75 billion, 10-year 
     cost of the House bill into 6 years.
       2. Future Deficits: The high loan rates will stimulate 
     overproduction, lead to lower prices and force excessive 
     government outlays. This bill will quickly surpass budget 
     estimates and lead to dramatic deficits.
       3. Farm Income: Government payments already represent more 
     than 40 percent of net farm income.
       4. Food Stamps for Legal Immigrants: Reinstates benefits 
     (which many states are already providing) for legal 
     immigrants who have lived in the U.S. for at least five 
     years. Also restores benefits for legal immigrant children 
     and disabled individuals without minimum residency 
     requirements.
       5. TANF: Provides five months of transitional benefits for 
     households leaving Temporary Assistance to Needy Families 
     (TANF).
       6. Across-the-Board Increases in Subsidies: Direct subsidy 
     support payment rates are raised (relative to current law) 
     for all crops and soybeans, and minor oilseeds are 
     established as new contract crops eligible for direct 
     payments.
       7. Milk: Makes permanent the Milk Price Support Program 
     currently set to expire at the end of May 2002.
       8. Dairy: Creates a new 3\1/2\-year National Dairy Program 
     to provide monthly and certain annual payments to all U.S. 
     dairy producers. Not one producer has requested this federal 
     manipulation of the private market.
       9. Country-of-Origin Labeling: Implements a costly, 
     mandatory, country-of-origin labeling program for meat, 
     fruits, vegetables, fish, and peanuts.
       10. Wool and Mohair: Permanently re-institutes the 
     marketing loans and LDPs eliminated in 1996 and only 
     partially and temporarily implemented since then.
       11. Honey: Permanently re-institutes the marketing loans 
     and LDPs eliminated in 1996.
       12. Peanuts: Establishes new fixed payments and counter-
     cyclical payments for peanuts (in the same fashion as such 
     payments for grains, cotton, and oilseeds). There is no such 
     provisions for peanuts in current law. ``Buys out'' peanut 
     farmers at 55 cents-per-pound over five years in exchange for 
     the elimination of peanut quotas.
       13. Apples: Creates a new commodity program.
       14. Onions: Creates a new commodity program.
       15. Sugar: Eliminates the loan forfeiture penalty in 
     current law and the House bill.
       16. McGovern-Dole: Authorizes $100 million to the George 
     McGovern-Robert Dole International Food for Education and 
     Child Nutrition Program, which would permit the President to 
     direct a selected federal agency to provide U.S. agricultural 
     commodities and financial and technical assistance for 
     foreign preschool and school feeding programs to reduce 
     hunger and improve literacy (particularly among girls), and 
     nutrition programs for pregnant and nursing women and young 
     children.
       17. Violations of trade agreements: U.S. trade agreements 
     limit domestic farm supports most likely to distort 
     production and trade to no more than $19.1 billion per year. 
     There is little doubt that under this bill we will exceed 
     these limits: 96 percent of the world's consumers live 
     outside of the United States; agricultural trade is vital for 
     our farmers, and this bill will surely spur our partners to 
     retaliate. For proof, just look at how some of our trading 
     partners are reacting to the new steel tariffs.
       18. Grasslands Reserve Program: Creates a new program to 
     enroll up to two million acres of virgin and improved 
     pastureland at a cost of $254 million over six years.
       19. Farmland Protection Program: Implements a 20-fold 
     increase in the funding for this program committed since the 
     last farm bill.
       20. Wildlife Habitat Incentives Program: Implements a 10-
     fold increase in the funding for this program committed since 
     the last farm bill.
       21. Conservation Security Program: Creates a new national 
     incentive payment program for maintaining and increasing farm 
     and ranch stewardship practices at a whooping cost of $2 
     billion over six years. If you wanted to walk one mile for 
     every dollar committed to this untested program, you could 
     walk between Washington, DC and Los Angeles almost 667,000 
     times!
       22. Market Access Program: More than doubles (to $200 
     million annually) the funding for this program.
       23. Target prices: Re-institutes ``target prices'' 
     eliminated in 1996. [Target prices are the prices per bushel 
     or other appropriate unit of a covered commodity used to 
     determine counter-cyclinal payment rates.]
       24. Loan Deficiency Payments: Expands authority for loan 
     deficiency payments (LDPs) to grazed wheat, oats, barley, 
     triticale, small chickpeas, lentils, and dry peas. 
     [Currently, LDPs can only apply to grains, upland cotton, and 
     oilseeds.]
       25. Nutrition Programs: Increases funding for several 
     nutrition programs, including the Emergency Food Assistance 
     Program and the WIC Farmers' Market Nutrition Program.
       26. Free Food: Implements a pilot program through which 
     fresh fruits and vegetables will be provided for free in 
     schools.
       27. Rural Development Programs: Creates and increases funds 
     for rural development programs, including programs that fund 
     high-speed Internet access and the training of local 
     emergency personnel.
       28. Initiative for Future Agriculture and Food Systems: 
     Gives a 67% increase in funding for this research program. 
     Reauthorizes and establishes new agriculture research 
     programs.
       29. Forest Management: Creates a new $100-million program 
     to assist private, non-industrial forest landowners in 
     adopting sustainable forest management practices.
       30. Bioenergy Programs: Creates 126 million-dollars-worth 
     of new bioenergy programs, including a program to educate 
     government and private fuel consumers about the benefits of 
     biodiesel fuel use.
       31. Opposed by Conferees: Vice Chairman of the House 
     Agriculture Committee, Rep. John Boehner (R-OH), and Rep. Cal 
     Dooley (D-CA)--both conferees on this farm bill--have 
     released statements opposing the conference report.
                                  ____

                                          The Heritage Foundation,
                                   Washington, DC, April 30, 2002.

                     [From Backgrounder, No. 1542]

  Still at the Federal Trough: Farm Subsidies for the Rich and Famous 
                       Shattered Records in 2001

                          (By Brian M. Riedl)

       Members of Congress who are poised to spend at least $171 
     billion on direct farm subsidies over the next decade would 
     be wise to examine newly released statistics detailing who 
     actually receives these subsidies. In 2001, fortune 500 
     companies and large agribusinesses shattered previous farm 
     subsidy records, while small family farmers saw their share 
     of the subsidy pie shrink.
       These subsidy programs tax working Americans toward 
     millions to millionaires and provide profitable corporate 
     farms with money that has been used to buy out family farms. 
     The current farm bills would provide even greater subsidies 
     for large farmers, costing the average household $4,400 over 
     the next 10 years, while facilitating increased consolidation 
     and buyouts in the agricultural industry.


                 how farm subsidies target large farms

       Legislators promoting subsidies take advantage of the 
     popular misconception that farm subsidies exist to stabilize 
     the incomes of poor family farmers who are at the mercy of 
     unpredictable weather and crop prices. If that were the case, 
     the federal government could bring the income of every full-
     time farmer in America up to 185 percent of the federal 
     poverty level ($32,652 for a family of four in 2001) for just 
     $4 billion per year. In reality, however, the government 
     spends nearly $20 billion annually on programs that target 
     large farms and agribusinesses.
       Eligiblity for farm subsidies is determined not by income 
     or poverty standards but by the crop that is grown. Growers 
     of corn, wheat, cotton, soybeans, and rice receive more than 
     90 percent of all farm subsidies, while growers of most of 
     the 400 other domestic crops are completely shut out of farm 
     subsidy programs. Further skewing these awards, the amount of 
     subsidies increase as a farmer plans more crops.
       Thus, large farms and agribusinesses--which not only have 
     the most acres of land, but also, because of their economies 
     of scale, happen to be the nation's most profitable 
     farms--receive the largest subsidies. Meanwhile, family 
     farmers with fewer acres receive little or nothing in 
     subsidies. In other words, far from serving as a safety 
     net for poor family farmers, farm subsidies comprise 
     America's largest corporate welfare program.
       With agricultural programs designed to target large and 
     profitable farms rather than family farmers, it should come 
     as no surprise that farm subsidies in 2001 were distributed 
     overwhelmingly to large growers and agribusiness, including a 
     number of Fortune 500 companies. The top 10 percent of 
     recipients--most of whom earn over $250,000 annually--
     received 73 percent of all farm subsidies in 2001.
       The main losers in 2001 were the bottom 80 percent of farm 
     subsidy recipients, including most family farmers, who saw 
     their collective share of the subsidy pie shrink from 16 
     percent throughout the previous five years to 12 percent in 
     2001. This represents a decline of 25 percent in the share of 
     subsidies received by these farmers.
       At the same time, the number of farms receiving over $1 
     million in farm subsidies in one year increased by 28 percent 
     to a record 69 farms in 2001. Topping the list was Arkansas' 
     Tyler Farms, whose $8.1 million bounty was 90,000 times more 
     than the median farm subsidy of $899--and nearly equal to the 
     total

[[Page H2010]]

     of farm subsidies distributed to all farmers in Massachusetts 
     and Rhode Island combined.


         WHY FARM SUBSIDIES WILL CONTINUE TO TARGET LARGE FARMS

       Although farm subsidies have been of greater help to large 
     farms for decades, the evolution of farm subsidies into a 
     corporate Welfare program has accelerated in recent years for 
     3 reasons: Congress has siphoned record amounts of money into 
     farm subsidies since 1998; and Farm subsidies have helped 
     large corporate farms buy out small farms and further 
     consolidate the industry.
       The big grain and cotton traders benefit from programs that 
     encourage more production.
       Despite an attempt to phase out farm programs in 1996, 
     Congress reacted to slight crop price decreases in 1998 by 
     initiating the first of four annual ``emergency'' payments to 
     farmers. Subsidies increased from $6 billion in 1996 to 
     nearly $30 billion a year in the new farm bill. Predictably, 
     as subsidies increased, the amounts of subsidies for large 
     farms and agribusinesses also increased.
       Although increased subsidies help explain why large farms 
     are receiving more money, however, they do not explain why 
     they are receiving a larger portion of the overall farm 
     subsidy pie. Since 1991, subsidies for large farms have 
     nearly tripled, but there have been no increases in subsidies 
     for small farms. Large farms are grabbing all of the new 
     subsidy dollars from small farms because the federal 
     government is helping them buy out small farms.
       Specifically, large farms are using their massive federal 
     subsidies to purchase small farms and consolidate the 
     agriculture industry. As they buy up smaller farms, not only 
     are these large farms able to capitalize further on economies 
     of scale and become more profitable, but they also become 
     eligible for even more federal subsidies--which they can use 
     to buy even more small farms.
       The result is a ``plantation effect'' that has already 
     affected America's rice farms, three-quarters of which have 
     been bought out and converted into tenant farms. Other farms 
     growing wheat, corn, cotton, and soybeans are tending in the 
     same direction. Consolidation is the main reason that the 
     number of farms has decreased from 7 million to 2 million 
     (just 400,000 of which are full-time farms) since 1935, while 
     the average farm size has increased from 150 acres to more 
     than 500 acres over the same period.
       This farm industry consolidation is not necessarily 
     harmful. Many larger farms and agribusinesses are more 
     efficient, have better technology, and can produce crops at a 
     lower cost than traditional farms; and not all family farmers 
     who sell their property to corporate farms do so reluctantly.
       The issue of concern is not consolidation per se, but 
     whether the federal government should continue to subsidize 
     these purchases through farm subsidies and whether 
     multimillion-dollars agricultural corporations should 
     continue to receive welfare payments. When President Franklin 
     Roosevelt first crafted farm subsidies to aid family farmers 
     struggling through the Great Depression, he clearly did not 
     envision a situation in which these subsidies would be 
     shifted to large Fortune 500 companies operating with 21st 
     century technology in a booming economy.


                       millions for millionaires

       A glance at some of the recipients of farm subsidies in 
     2001 shows that many of those receiving these subsidies 
     clearly do not need them. Table 1 shows that 12 Fortune 500 
     companies received farm subsidies in 2001. Subsidies to the 
     four largest of these recipients--Westvaco, Chevron, John 
     Hancock Mutual Life Insurance, and Caterpillar--shattered 
     their previous record highs.
       Table 2 lists other rich and famous ``farmers'' who 
     received massive farm subsidies in 2001. David Rockefeller, 
     the former chairman of Chase Manhattan and grandson of oil 
     tycoon John D. Rockefeller, for example, received a personal 
     record high of $134,556. Portland Trailblazers basketball 
     star Scottie Pippen received his annual $26,315 payment not 
     to farm land he owns in Arkansas. Ted Turner, the 25th 
     wealthiest man in America, received $12,925. Even ousted 
     Enron CEO and multi-millionaire Kenneth Lay received $6,019 
     for not farming his land. Chart 4 shows how these amounts 
     tower over the amount received by the median farm subsidy 
     recipient, who has received just $899 per year since 1996.
       The Heritage Foundation concludes: The farm bills currently 
     being considered by a House-Senate conference committee would 
     further accelerate the transformation of farm subsidies into 
     corporate welfare programs. Most of their enormous $171 
     billion cost would subsidize highly profitable Fortune 500 
     companies, agribusinesses, and celebrity ``hobby farmers'' 
     and help fund their purchases of small family farms, and the 
     average American family would be left paying $4,400 in taxes 
     and inflated food prices to benefit millionaires--unless 
     Congress or President George W. Bush finally puts and end to 
     this counterproductive waste of taxpayer dollars.

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