[Congressional Record Volume 154, Number 70 (Wednesday, April 30, 2008)]
[House]
[Pages H2924-H2930]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
MOTION TO INSTRUCT CONFEREES ON H.R. 2419, FOOD AND ENERGY SECURITY ACT
OF 2007
Mr. FLAKE. Mr. Speaker, I have a motion to instruct at the desk.
The SPEAKER pro tempore. The Clerk will report the motion.
The Clerk read as follows:
Mr. Flake of Arizona moves that the managers on the part of
the House at the conference on the disagreeing votes of the
two Houses on the Senate amendment to the bill H.R. 2419 (an
Act to provide for the continuation of agricultural programs
through fiscal year 2012) be instructed to agree to the
provisions contained in section 1703(b)(2) of the Senate
amendment (relating to a $40,000 limitation on direct
payments).
{time} 1915
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Arizona (Mr. Flake) and the gentleman from Minnesota (Mr. Peterson)
each will control 30 minutes.
The Chair recognizes the gentleman from Arizona.
Mr. FLAKE. I thank the Chair.
This motion to instruct conferees is simple. It would simply urge
farm bill conferees to accept the Senate provision on the payment
limits for annual direct payments, which is the same as current law.
Again, we are simply asking to accept current law, rather than increase
payments limitations. Let me explain.
Under current law, farmers and eligible landowners can receive
$40,000 per person in direct payments per year, not including a
loophole that currently exists that enables that amount to be doubled.
The House-passed farm bill seeks to raise this limit to $60,000 per
person, while the Senate passed bill keeps the limit at the $40,000
level as in current law. In essence, this motion to instruct conferees
would simply say, retain current law. Don't increase the limit on how
much a farmer or landowner can receive in direct payments.
Direct payments are one of the three primary subsidy programs
available for commodity crops, along with countercyclical payments and
marketing loan payments. Direct payments are paid to farmers and
eligible landowners that have had so-called base acreage that was
historically farmed for program crops like wheat or cotton or corn.
Direct payments go to farmers and landowners whether the whether they
farm or not on the property and are independent of crop prices. Simply
put, these checks are in the mail to eligible recipients, no matter
what the price of commodities.
While these payments were originally intended to transition farmers
away from subsidies, it is unfortunate that they have come to take a
permanent place in the entitlement spending landscape and that Congress
is on the verge of upping the limits on how much recipients can
receive.
These payments cost taxpayers more than $5 billion a year, under the
last farm bill, that is, and while the bill under consideration might
cut them by a minuscule amount, taxpayers will still foot a staggering
bill.
These handouts are often distributed to landowners who don't farm. I
have even heard anecdotes about rice farmers who later subdivide the
land for mini-mansions even, and realtors will advertise that direct
payments will come to the new landowners. Lucky them. Get a house on
land that was previously a rice farm. You are going to be getting
direct payments. How is that? How can we countenance a situation like
that continuing?
According to a recent analysis by the Environmental Working Group,
with the present loopholes that are available to recipients, ``a total
of 1,234 recipients collected direct payment subsidies worth $120,000
or more, costing taxpayers $226 million total. One hundred forty-nine
recipients got more than $250,000 in direct payments. The top 10
percent of direct payment subsidy recipients in 2007 collected about 60
percent of this government money.'' These are the payments on which the
House-passed bill would increase the limit by 50 percent.
We have a strong agricultural economy at present. Unlike the
countercyclical and marketing loan programs, which, if you have a good
agricultural economy, don't get paid out, this program keeps paying out
no matter what. These are independent of crop prices.
It is unfathomable that U.S. farmers that are enjoying historically
low debt-to-asset ratios and consistently high cash receipts and robust
farm export values, under this scenario the conferees would need to
increase the limit on direct payments beyond the current $40,000
limits. It is unfortunate. It looks like the 2007 farm bill will be a
missed opportunity to reform the wasteful farm subsidy programs, like
the one I have spoken about.
As approved by the House, the best that can be achieved in terms of
reform is a reduction in the income cap for payment eligibility
programs from $2.5 million to $1 million or $2 million for married
folks. Even though the administration has sought a $200,000 income cap,
both the House and the Senate it seems, and it seems the conferees,
appear content to continue to allow millionaires to receive farm
payments. While acting as if real reform had been made on the income
cap, the House-passed farm bill actually relaxes the limits on how much
a recipient can receive in farm payments.
We simply cannot go in this direction. We have been told again and
again and again by both sides of the aisle that we won't have a farm
bill that has the generous subsidy payments that we have had before,
that there has to be reform. This is not reform.
Some people may try to sell it and say we are getting rid of a
loophole there, so we will have to increase this, and then we will
phase it out at some other time. That is probably what we will hear.
When you hear that, hold on to your wallet.
[[Page H2925]]
You have to remember that this program that we are talking about,
this direct payment program was instituted in the nineties as a way to
transition farmers away from subsidies. Yet here it is still, a decade
later, and we are talking about increasing it. So if anybody tells you
we are increasing it so we can actually phase it out easier or somehow
lessen payments that will go out, don't believe it. Don't believe it.
Let's vote for this motion to instruct.
I reserve the balance of my time.
Mr. PETERSON of Minnesota. Mr. Speaker, I yield myself such time as I
may consume.
The conference committee is close to wrapping up work on the bill and
we will have significant reform in the final package that comes out of
the conference committee. I can assure people of that. Apparently the
issue that is before us today is one small part of that whole package.
Frankly, the discussion has not really focused that much on this part
of the payment limit issue. It has been more on the AGI issue.
But just so folks understand what happened here, we in our bill that
passed the House made the most significant reform in this area that has
been made in a long time, and that is to get rid of the triple entity
rule and to require direct attribution. If you had told people 2 years
ago that you were going to accomplish that, they would have thought you
were crazy. So we did that in our bill. We are going to do that in the
conference report.
The reality of how this all works, with the limits, the internal
limits that we have in the House-passed bill, $60,000 on direct
payments, $65,000 on countercyclical, it keeps the direct payment level
for folks that had a triple entity at the same amount that it is under
the previous system. So I will agree that we did in certain cases keep
the direct payment limits the same as what they were in the past before
we eliminated triple entity. And there are other factors in here, like
limitations on countercyclical payments and so forth. So there is a lot
of disagreement about how this should be done and so forth.
There are a lot of statistics put out about who is getting what and
what percentage they are of farmers. I would just like people to know
that according to USDA, we have 2.1 million farmers in the country. But
people would be surprised to find out what it takes to qualify as a
farmer under USDA rules. It says that all you have to do is have $1,000
of income from farming. Well, it doesn't even say that. It just says
you have to be able to have had $1,000 of income. So you don't even
have to sell $1,000. If you could have sold $1,000, you would qualify
as a farmer.
So all of these statistics are based off of 2.1 million farmers, when
the reality is the true commercial farmers that produce 90 percent of
the food in this country amount to 350,000. So you have a lot of folks
in this system that really aren't farmers. You have got a lot of people
that are hobby farmers, that farm on the weekend, and they are all
being counted and they are all being used in these statistics that
people like Mr. Flake and others use.
That is fine. But what we have tried to do in the Agriculture
Committee is focus on the real farmers, the people that farm every day,
that are commercial farmers that produce 85 to 90 percent of the food
in this country, and to provide them a safety net where they can get a
loan from the bank in the spring and they can survive the bad years and
keep farming. And that is not an easy thing. It is a very risky
business, and it costs a lot of money to be in this business on a
commercial scale.
So we have, unfortunately in my opinion, and others will disagree
with this, we got this system put on us in 1996 under a thing called
Freedom to Farm, which I opposed as a member of the Agriculture
Committee. The idea was we were going to have direct payments that were
not tied to any production and that were based on past history because
prices were good and the WTO wanted us to do this, and this was
ideology run amuck.
I said at the time that this is not going to work, this is a bad
idea, that these prices are going to go down and we are going to have
to rescue farmers, and that is exactly what happened.
We spent $30 billion 2 years in a row to bail out farmers. That is
more than the entire cost of these direct payments over 5 years. We
spent that every year for 2 or 3 years to bail farmers out in 1998,
1999 and 2000. So we get to the 2002 bill and people figured out, well,
we have to put the safety net back. And they kept the direct payments.
So now we went back to the old system, but we kept the direct payments.
Well, if I had to do it, I would do it different. But that is the
system we have, and that is the system that people want, especially in
the South, because it is in their financial structure and it is how
they organize everything. If I had my way, we would take those direct
payments, we would raise the loan rates, we would raise the
countercyclical target prices, we would have a stronger safety net. But
the consensus is that we do some of each. So these direct payments
serve as a base for farmers to go get a loan at the bank.
For those folks that are concerned about food prices going up, the
folks that have been pushing payment limits, what the effect of that
will be is to raise food prices. So if that is what you want to do, you
know, that is probably not going to be real popular. But whenever you
get the government mucking around and deciding how big a farm should
be, which is what you are doing, you are going to make the farms more
inefficient and you are going to drive up the cost of farming. That is
what you are going to do. And it is going to increase the cost of goods
to consumers.
So we have considered this. The committee had looked at it. We are
looking at the limitation on direct payments, and there will be some
changes in that area. But we have had this debate on the floor of the
House. They have had it in the Senate. We appreciate Mr. Flake's input,
but we think that what we are doing here now in the conference
committee will be a better outcome that will provide a better situation
for our farmers.
Mr. Speaker, I yield 5 minutes to Mr. Neugebauer from Texas, a member
of my committee.
Mr. NEUGEBAUER. I thank the chairman.
My friend from Arizona and I agree many times on many issues, but
this is one on which I must disagree.
There has been a lot of discussion about reform in the farm bill. I
think before I go down and list some of the reform that is being
considered in this current farm bill, I think we have to step back and
look at what has transpired with the 2002 farm bill.
The 2002 farm bill actually cost $25 billion less than what it was
originally projected to cost. Let me repeat that. This is a Federal
program that actually came in $25 billion less than what it was
budgeted. I would ask my friend from Arizona; name me another mandatory
program in the last 5 years that has come in under what was originally
projected.
Additionally, the Congressional Budget Office projection for what
farm policy will cost has imposed for the baseline going forward a $60
billion reduction over what was originally planned in 2002. The reason
that that reduction is in place and the reason that this bill came in
$25 billion less than what it was projected is because it was working
the way it was supposed to.
{time} 1930
And it was designed when commodity prices were low for there to be a
safety net so that we could preserve that farm infrastructure. When the
commodity prices are high, then the safety net was not available
because there was no need for that safety bill. So when you look at the
reform, $60 billion sounds like a lot of reform to me. Now I don't know
about out in Arizona, but $60 billion in Texas is a lot of money.
Additionally, one of the things, and I think the chairman alluded to
this, is that both in the House and the Senate bill, the three-entity
rule has been eliminated bringing some transparency; in other words,
being able to boil it down, who is actually farming, and making sure
that the farm safety net is actually available to those people that are
involved, actively engaged in farming.
The other thing that is going on here is that with the elimination of
that three-entity rule, it is estimated that some 50 percent reduction
will be affected, some of the operations that are
[[Page H2926]]
currently under this bill. So that is a fairly good reduction when you
look at 50 percent for some of those operations.
Compared to the House and the Senate version, quite honestly, a
$10,000 reduction has been on the table over the original House
version. As the chairman mentioned, these discussions are still under
way and we don't know what that final number is going to be.
The other thing, and the chairman also alluded to this, because there
has been a lot of discussion about are these payments going to
millionaire farmers. And so one of the things that we have taken is
steps to materially reduce the adjusted gross income figure, some 70
percent reduction.
Now I think the point that the chairman was trying to make, and it is
a very important point, 30, 40, years ago farmers across America could
farm a small piece of land and make a good living. Today, in a global
economy where they are competing with producers all over the world,
what they are faced with is, how do they get to a size that makes sense
with today's cost of production and with today's cost of tractors and
all the equipment necessary. And the days of a small farm being able to
support a family are gone. So today, many farmers in my district, for
example, are farming 3,000 and 4,000 and 5,000 acres, and this is still
a family farm. This is not a company that has a lot of employees; this
is a family farm. And so when you look at those numbers, it takes a lot
of money, it takes a lot of capital and investment for them to produce
this many acres.
Farmers are taking a big risk today. Yes, the commodity prices are
up, and that is a good thing for farmers and producers. The bad news
for them, though, is that their costs are up as well. Looking across
fuel and fertilizer and all of those, in just the last few years
production costs for commodities is up almost 25 percent.
One of the things that, as we look at this farm bill, I think we have
to step back and look at it and I think sometimes I get kind of amused.
As we talk about this farm bill, only about 12 percent, Mr. Speaker, 12
percent of this farm bill actually has anything to do with production
of agriculture. A good portion of this farm bill has to do with food
stamps and nutrition programs and conservation programs. While those
may be worthy, I am not here to debate those, when we look at the
production of the agriculture part, the part that actually allows
American agriculture to produce food and fiber for Americans, we are
talking about 12 percent of this bill having anything to do with that.
So when you step back, why is that important to America? Why should
America be concerned about having a good, strong agricultural industry
in this country? Well, I will tell you why, Mr. Speaker. Right now, we
are watching with amazement as we look at people, Americans across
America having to pay $3.50 a gallon for gasoline. We have seen
tremendous increases. This country today is energy dependent. That
means that we wake up every morning looking for some other country to
furnish the energy that it takes to run our country's economy. It is,
quite honestly, a security risk to our country as well as an economic
security risk to our country. And so how did we get in that situation
is because we let America's infrastructure for producing energy fall to
the wayside. We did not make it a priority.
My greatest fear here today is that, as we move forward, if we begin
to undermine American agriculture, who will then feed and clothe
Americans in the future? Do the American people want to wake up every
morning and wonder where we are going to get our next meal? What
country is going to feed us?
The SPEAKER pro tempore. The time of the gentleman from Texas has
expired.
Mr. PETERSON of Minnesota. I yield the gentleman an additional 2
minutes.
Mr. NEUGEBAUER. Because we let American agriculture infrastructure
fall to the wayside. Our producers are competing on an unlevel playing
field. I wish the playing field was level. If the playing field was
level, we wouldn't need any of these programs, because American
producers can compete with anybody in the world on a level playing
field.
Unfortunately, the WTO discussions that we have been involved in have
not yielded much fruit. Many countries that our producers are competing
with all across the world are competing against other countries that
provide subsidies at a much greater level than we are providing under
this underlying bill.
So while I appreciate the gentleman from Arizona's concern about
being fiscally responsible, I understand that he would like to see some
reforms. I am here tonight to tell him that there are a lot of reforms
in this bill. But at the same time, it is important to have a balanced
bill to make sure that we have a strong agricultural economy in this
country from this point forward so that when Americans wake up every
morning, they are not going to worry about who is going to feed or
clothe them.
Mr. FLAKE. Before yielding to the gentleman from Wisconsin, let me
simply say that we are not talking about the food stamp program here.
We are not talking about nutrition programs or conservation programs.
We are talking about direct payments. This is a different program. This
is simply an effort to say, let's not increase the amount of money
going to direct payments at a time when commodity prices are so high
and when the farm community is doing so well. It just not make sense to
reform by increasing the subsidy.
I yield 5 minutes to the gentleman from Wisconsin (Mr. Kind).
Mr. KIND. I thank the gentleman from Arizona for yielding me this
time, and I commend him for this motion to instruct.
Mr. Speaker, let me be clear: We need a farm bill, and we need one as
soon as possible. It is planting season back home in the upper Midwest
and the district I represent in western Wisconsin, and our farmers need
some predictability. They need to know what the rules are that they are
going to be operating under and producing under in the coming fiscal
year and in the coming 5 years.
But we also need a good farm bill, not a bad farm bill, one that is
responsible to the American taxpayer and one that does well by the
American farmer. And those of us who have been talking about much
overdue and needed reforms under the commodity title, these subsidy
payments to a handful of commodity producers in this country, have been
saying, let's give farmers help when they need it but let's not when
they don't.
And the market conditions today are something we have never seen
before. They are talking about $10 corn by this summer. Soybean, wheat,
rice at an all-time high in the marketplace. Yet instead of trying to
tighten up these subsidy programs and rein them in for some possible
savings so we can address the other priorities in the farm bill, what
is being proposed, to our understanding, and we haven't been privy to
the conference negotiations that have been going on, is actually
expanding direct payments from the current maximum level of $40,000 up
to $60,000, and allowing dual entities operating on the same farm to
qualify for the same amount of these direct payments.
And to be clear, the direct payments bear no relationship to
commodity prices, no relationship to production. They are something
that go out automatically regardless of the marketplace. And, quite
frankly, it is the least justifiable aspect of this farm bill today in
light of the record commodity prices that exist.
But we also need a farm bill that this President is comfortable in
signing, and the administration has been clear from the beginning that
they feel there is more room for reform under these commodity programs.
We are not talking about the two other subsidy programs, the loan
deficiency program or the countercyclical program, although there too
they are ramping up the target price and the loan rates under those
programs. We are only talking about the direct payments right now, that
which goes out automatically to only five principal commodity crops at
the expense of everything else that we are trying to accomplish in this
farm bill, having a strong conservation title in light of the increased
pressure that crop production is placing on sensitive and highly
erodible land. And we are seeing that now with a lot of CRP acreage
being taken out of CRP and put back into production.
[[Page H2927]]
And what does that mean to the average person? That is going to
affect quality water supplies throughout the Nation, it's going to
affect habitat, wildlife populations, all of which depend on good land
stewardship of these lands and knowing what land is highly erodible and
what isn't. And that was the whole basis behind CRP to begin with, and
yet that now is in jeopardy because of increased commodity prices.
I don't begrudge, and I don't think anyone here begrudges family
farmers getting a decent price finally in the marketplace. But where I
am from in Wisconsin and talking to my producers, for years they kept
saying: We don't like these subsidy programs, either. We wish we didn't
have to rely on it. And if we could only get a decent price in the
marketplace, we wouldn't have to. Well, guess what. That day has come.
And now is an opportunity, never better in the history of the Congress,
to start reforming these commodities subsidy programs right now so that
at the end of the day we are not painting this big bull's eye on the
back of our farmers with more subsidy payments that are going to be
challenged through the WTO and possibly taken away through the WTO
challenges, just as Brazil has done with the cotton challenge that they
successfully prevailed on. And this is only the beginning.
Instead, we could redirect funding for what are called green box
payments, conservation payments that also go to family farmers to help
them be good land stewards but do not distort the marketplace and they
do not distort trade policy, and it doesn't get us into trouble by
these outside challenges that we may be facing in the future.
So that is why I think this gentleman's motion to instruct is
important. We understand it is in the 11th hour. I appreciate the hard
work that the chairman and everyone involved in the conference has been
doing. Putting together a farm bill is probably one of the toughest
things to do in this place given the parochial interests, given the
different ideas and opinions that go into deliberations. But we have an
opportunity right now of maintaining an important safety net for family
farmers in case things do go south in the commodity market, but at the
same time starting to reform these subsidy programs so we are more
responsible to the taxpayer but also helping our farmers modernize so
they can be more competitive both domestically and abroad. Otherwise,
again, we are setting them up for future challenges by loading up these
subsidy programs to the extent that they have been occurring.
I would be happy to yield to my friend from Arizona.
Mr. FLAKE. I will yield the gentleman an additional 5 minutes, if he
would like, as long as he wants.
Mr. KIND. I probably won't need that much time. But, again, hard
negotiations. We are getting into the final details of it. There is
still an opportunity of producing a bill that the President feels
comfortable with in signing, and that way the farmers know what they
are operating under.
But, again, these direct payments are probably the least justifiable
program going forward today in light of what the marketplace is
producing. And the futures market right now is looking astounding when
it comes to these commodity crops, and that is going to be good for
farm income and debt-to-asset ratio. For family farms, it has never
been better. And that again speaks to what we think is a reasonable and
justifiable goal of trying to reform these commodity programs so we can
deal with the other priorities and still maintain an important safety
net to the family farmer.
Again, I thank my friend from Arizona for offering the motion.
Mr. PETERSON of Minnesota. Mr. Speaker, before I recognize the
gentleman from Arkansas, I would just like folks to know that these
prices that everybody talks about, if you are a real farmer out there
and goes to your elevator, you cannot get a contract at these prices.
And if you really want to do something here on this floor that will do
some good, it would be to keep this Wall Street hedge fund money out of
the commodity market, which has run these prices up and created a
bubble.
People need to remember that these direct payments came about because
of high prices, quote, back in 1996. We heard the same speeches. That
is how we got these direct payments in the first place. And what
happened? It collapsed. And I will tell you one thing that I know about
farming, is that whenever you have good prices, farmers are very good
at creating low prices, and they will do it again. And that is why we
need a safety net.
I yield to the gentleman from Arkansas such time as he may consume.
Mr. BERRY. Mr. Speaker, I too want to recognize Chairman Peterson and
Speaker Pelosi for the hard work and the dedication that they have
exhibited as they have pursued this farm bill and the great job that
they have done and continue to do to get us a farm bill.
As I listened to these discussions, and I have heard them year after
year, we go through this when we do the appropriations, we always have
those that consider that they are more knowledgeable than the people
that are actually in the business and have to make these businesses
work and make them profitable. They know more about how to make this
happen than the people that really do make it happen.
One thing that we know, the only reason for a farm bill and a farm
bill is to guarantee adequate production and processing capacity so
that our people have a reasonably priced food and fiber supply.
In a global marketplace, and we are certainly in a global marketplace
in agriculture today, every country that has food security has a
stronger farm bill than we do.
{time} 1945
They have a better safety net than we do in this country.
We absolutely know, just like the chairman said, these prices come up
and they go down. Right now the price that you can see on the Chicago
Board of Trade is in some cases 25 percent higher than a farmer can
actually receive. And even then the prices that are available to them
aren't too bad.
But as the gentleman from Texas recognized, production costs, when
some of these numbers were put in this bill or in the other bills that
we have had, diesel fuel was 30 cents a gallon. It is $4 a gallon
today, or over $4. You can say that about all of the production costs
that a farmer has to face. The cost of machinery has gone up a great
deal in the last couple of years. All of these things are necessary to
have efficient production of food and fiber in this country. The same
thing can be said about a farm bill. Without a farm bill as a safety
net, this system cannot continue to function. And I offer as evidence
that it has functioned successfully for a long time, that the American
people feed themselves for a lot less of their disposable income than
people in any other country in the world.
Now you can't pick up a newspaper today or hear a broadcast news
story for very long that doesn't talk about the high price of food. If
you really want to see some catastrophic prices, just keep doing what
these guys have tried to do over and over, year after year and continue
to chip away at this safety net.
Like the chairman said, I believe, or maybe it was the gentleman from
Texas, they want the government to decide how big your farm can be.
They don't even want you to be able to decide that I will farm part of
it, my son will farm part of it. They want to use every tool that there
is to try to mix that up and make it less efficient.
In the South, in rice and cotton country, 2,000 acres is no longer a
viable economic unit. You cannot be prepared to put in a crop on 2,000
acres with a million dollars worth of machinery and another nearly
million dollars worth of fuel and fertilizer and seed and chemicals.
And there are those who don't think you ought to use fertilizer, and
there are those who don't think you ought to use chemicals. But if you
do those things, just be ready to produce whatever you are going to eat
and your family is going to eat in your own backyard because we are not
going to have the efficient production machine that we have in this
country today that farm bills have made possible.
And these people may have huge dollars invested, but they don't make
huge profits. This is a very dangerous thing. We all know the damage
that
[[Page H2928]]
high fuel costs and high energy costs are bringing to our economy
today. That is going to be an insignificant event when we lose the
ability to be the most efficient producers of food and fiber that has
ever existed in the history of the world.
The American farmer doesn't have to take a second place to anybody in
their ability to feed our people. They do it. It is the hardest work in
the world. All they ask is a fair chance. All they ask is enough safety
net so that they can get a loan from the bank and continue to do what
they love to do and what they are really, really good at.
We should be doing more to allow these wonderful entrepreneurs to do
what they have to do to be successful and to produce food that is
inexpensive enough for us to buy it. There is no shortage of food in
the United States of America today. But what these proposals will do is
create a shortage that you can't fix. It will create a situation that
you cannot take care of in any kind of a short time frame. You just get
one crop a year.
So I would ask this Congress, and I would ask the gentlemen, I know
they have good intentions, unfortunately they have got bad ideas. This
is something that we should not gamble with. We have got a system that
we know works. I think it is inadequate, but at least give us this so
that our producers can have the ability to continue to be successful.
I once again thank the chairman for all of his hard work.
Mr. FLAKE. Sometimes I think we are just talking completely in a
vacuum here, that inside the Beltway here in Washington, that we see it
somehow differently than the rest of the country. To hear the debate on
the other side, you would think it was just one crazy guy from Arizona
and another crazy guy from Wisconsin who think that we are out of
bounds here. That is hardly the case, and I will read some of what the
rest of the country is saying later.
I yield 2 minutes to the gentleman from Wisconsin (Mr. Kind).
Mr. KIND. I thank the gentleman for yielding.
I have great respect for the gentleman from Minnesota, chairman of
the Agriculture Committee, and my friend from Arkansas and their depth
of knowledge when it comes to farm policy in this country. They have
invested their careers in trying to understand these programs and how
they work.
But I have as much respect and admiration for my family farmers back
home in Wisconsin, too. The gentleman from Arkansas is exactly right;
these are hardworking individuals playing by the rules in a market that
is set out for them. But when I have producers in my district in
western Wisconsin coming up to me and saying, Ron, why are we still
receiving these direct payments when the market prices are so good
right now?
I say, You know, you're right. We should be looking at this anew.
The gentleman from Minnesota pointed out that the first time direct
payments were introduced in a farm bill was back in 1996 as a
transitional program to get away from these direct subsidy payments to
the farmers.
Now we are into the third farm bill, and instead of at least holding
them constant, as the gentleman's motion would have us do, we are
talking about increasing the reliance on these direct payments over the
next 5 to 10 years.
In my conversations with farm experts from Australia and New Zealand,
they said they heard the same arguments down there when they weaned
their producers off direct government subsidies for agricultural
production, that this would spell disaster for the entire farming
community in Australia and New Zealand. And now you would be hard-
pressed to go down to either one of those countries and find one farmer
who wants to go back to the government-subsidized system that they were
operating under all these years. They say that with a change of those
subsidy programs, it has made them more efficient and more competitive,
especially in the global marketplace.
And whether we like it not, that day has arrived for our producers.
The world is at our doorstep, and I don't think we are doing them any
more favors by propping them up with these artificial subsidy programs
with the strong market prices they are receiving, and at the same time
telling them that you can go out and compete with everyone else around
the globe.
There is a better way of doing this while still maintaining a safety
net, and I think that is what the gentleman is trying to get at with
this motion.
Mr. FLAKE. I appreciate the words of the gentleman from Wisconsin. I
too have traveled to Australia and New Zealand, and I talked to the
farmers there. They heard the same horror stories there. They worried
about the same thing when they got rid of subsidies in New Zealand.
As the gentleman from Wisconsin mentioned, you would be hard-pressed
to find anybody who wants to go back to that system because, just as
the gentleman from Arkansas just mentioned, they don't like the
government telling them what they can and can't farm.
A main element of this program we are talking about right now is that
if you are to receive these direct payments, you can't farm specialty
crops. You have to farm corn or wheat or rice. You can't do specialty
crops. So for all of the talk about we don't want government telling us
what we can and can't plant, that is a central element of this program
that you accept those restrictions. There is something wrong with that
argument when we say we don't want government to tell us; but yes, you
can tell us as long as we can collect these direct payments.
The gentleman from Arkansas said that prices are up high now, but
they will go down. Yes, they will; but these direct payments will
remain the same. That is the problem here. These aren't a safety net,
these are just a direct subsidy in many cases whether you farm or not.
That's the problem with this.
And we aren't saying get rid of it. I would like to, frankly, if it
were up to me. But we're not saying that. All we are saying is keep it
the same. Don't increase it. Yet we are hearing the argument that
somehow all of the family farms are going to go away unless we increase
a direct payment that bears no relationship to crop prices at all.
There is something wrong with that argument. So we are competing here
in a vacuum.
Mr. KIND. Would the gentleman yield?
Mr. FLAKE. I yield to the gentleman from Wisconsin.
Mr. KIND. One of the things that I have noticed back home in
Wisconsin with the direct payments and the overall subsidy programs
that exist for these commodity crops is that it is leading to greater
consolidation. We know these subsidies have been primarily skewed to
the larger entities, and they are using them to gobble up smaller
family farms around them. And they are also driving up land values by
artificially inflating these land values with the subsidy guarantees
that attach to them, and it is making it virtually impossible for newer
or beginning farmers to have the capital in order to invest in order to
enter this very honorable work and profession.
So that is the unintended consequences that these subsidy programs
have brought in, putting the squeeze on smaller family farmers
throughout America.
I think it would be reasonable as well, although we can't address it
in this motion, to have some reasonable means testing attaching to
these direct subsidy programs. It is tough to justify to the American
taxpayer that if someone is earning $900,000 in adjusted gross income,
that is profit, that is after you back out the expenses and all of the
deductions of doing business, that you would still qualify for subsidy
payments.
I understand in the course of negotiations there has been some
movement, and hopefully that is a good thing; but nevertheless, that is
a pretty hefty adjusted gross annual income for anyone. And then to say
they still qualify for American-taxpayer subsidies at the end of the
day, that is pretty tough to explain back home.
Mr. FLAKE. I thank the gentleman.
I mentioned that it is often said on the other side that it is just a
couple of guys who don't know what they are talking about, and the rest
of the country feels differently. Let me tell you what some people
around the country are saying about this farm bill.
The Minneapolis Star-Tribune wrote: ``The Senate passed a $286
billion farm
[[Page H2929]]
bill that makes only minor changes to the bloated agricultural subsidy
system that rewards rich farmers for being farmers.''
The Burlington, Vermont, Free Press: ``The farm bill making its way
through Congress is a good example of what's wrong with the way major
legislation gets passed in Washington.''
The Boston Globe: ``That kind of calculation is just the sort of
special-interest politicking that is making voters nationwide question
what was gained by giving the Democrats power.''
The East Brunswick, New Jersey, Home News Tribune: ``The farm bill is
the sort of confounding public policy document that too often wins
approval in Washington; it's stuffed full of pork and misdirected at
the same time.''
This is not a Republican issue or a Democrat issue. The Republicans
passed, I thought, what was a far too generous, bloated farm bill back
in 2002, and I believe the gentleman from Arkansas and I had a debate
at that time.
{time} 2000
So this isn't a partisan debate at all. This is a debate about what
taxpayers should be required to pay.
The Orlando Florida Sentinel: ``The system those lawmakers would
perpetuate dumps billions of dollars a year in taxpayer subsidies on
the farmers of a few crops, whether they need it or not. The largest
commercial farms reap the bulk of the subsidies, while most growers get
little or nothing.''
The Charleston South Carolina Post Courier: ``So far the impulse to
reform has been overwhelmed by the efforts of those representing the
beneficiaries of farm program largesse.''
The Winston-Salem, North Carolina Journal: ``The legislation that was
designed to put American family farms back on their feet has now become
the massive giveaway program to mega corporations that manage family
farms. The farm bill is hopelessly bloated and outdated.''
The Pittsburgh Pennsylvania Tribune-Review: ``The U.S. Senate has
once again failed to slow the nonstop pigout in multi-billion dollar
family farm subsidies.''
The Bismarck, North Dakota Tribune said: ``The provision that would
get wide agreement would require that government payments be attributed
to an actual, named person, rather than to shadow entities that might
even belong to people who do no farming themselves.'' We call that
reform.
The Lewiston, Maine Sun Journal wrote: ``The prospect of starving
constituents is unpalatable. What's worse, though, is using them as
chattel to negotiate subsidies for wealthy farmers.''
As the gentleman from Wisconsin said, we're hardly talking about
payments to those who are just getting by. In some cases, payments are
going to those with adjusted gross incomes nearing $1 million. Yet
we're saying, well, there are large expenses that farmers have. Yes.
That's adjusted gross income after expenses are already backed out.
So we're not a couple of guys here who are seeing things differently.
I think we're seeing it as the rest of the country does. I think that
this place is in a bubble sometimes when we discuss continuing a
program to subsidize people who, in many cases, aren't farming, and
having subsidies tied not to crop prices at all, not a safety net, mind
you, but payments that go and go and go, regardless of whether or not
crop prices are high or low.
With that, I reserve the balance of my time.
Mr. PETERSON of Minnesota. I have no more speakers, so if they're
ready to wrap up, I am, I guess.
Mr. FLAKE. May I inquire as to who has the final word.
The SPEAKER pro tempore (Mr. Braley of Iowa). The gentleman from
Arizona has the right to close.
Mr. FLAKE. I will go ahead and reserve until the gentleman has
closed.
Mr. PETERSON of Minnesota. I will just say very briefly that, as I
said earlier, we get kind of off on tangents here on talking about
small farmers and so forth. But the effect of a lot of these different
proposals on reform, the effect of them are going to be to raise food
prices for people in this country and around the world, and if that's
what you want to do, you know, you can talk to your voters about that.
But 23 percent of the farms in this country have more than $50,000 of
sales. But they do 90 percent of the business. They produce 90 percent
of the food and they get 81 percent of the payments. So we already have
changed things.
But the point is $50,000, I think my good friend from Arkansas will
agree, in our part of the world is not a real farm. You can't make a
living on $50,000 of gross income on a farm. It's just not realistic.
So when you get up to a realistic commercial size farm, they produce
just about all the food in this country. Now there's some small farms
that are developing that are doing pretty well, and I've been
supporting that and we're supporting that for the first time in this
farm bill; and that is people producing organic, people producing local
foods, getting out of the commercial system.
So there is a place for small farmers in these niche markets, and
they're growing, and that's a good thing. But you go to those niche
markets and you're finding you're paying a lot more money for that type
of food. And a lot of people want that and that's great.
If we get involved in this and screw up this system, the gentleman
from Arkansas is correct, we're going to endanger the national security
of this country. If we ever get in a position in this country with this
food that we're at with oil, we've got significant problems.
And this isn't a perfect system. When it was established, I voted
against it. If I had my way, as I said earlier, I would not do it this
way. But this is the consensus of people in the business of
agriculture, the system that we have, that works so they can get
financing and they can stay in business.
And you hear about the WTO. One of the biggest objections to what I
want to do, the direction I'd like to go with farm policy, is that we
can't do that because the WTO would object. And we've got the World
Bank out there getting these developing countries to adopt these free
market ideas like some people have done in this country, and the effect
of that has been to not help the people. It's made them more food
insecure.
So we're never going to settle this debate. As my friend from
Arkansas said, we've argued about this for how long.
We are going to produce a farm bill here pretty quick. It's going to
have a lot of reform in it. It's going to have a lot of new initiatives
that we haven't done before in organic, in energy. There's a lot of
money in there for conservation. We're going to have $10 billion of new
spending above the baseline. After we took a $58 billion hit in the
commodity title, we added $10 billion not in the commodity title. We
added it into nutrition. So we're adding $10 billion of spending, and
10.261 of that, more than we've added to the bill, is going to
nutrition to help people to cope with these high food prices.
So we're doing, we think, the right things, putting in the right kind
of initiatives in this farm bill. It's not going to satisfy everybody,
but it's moving in what we think is the right direction for the
country.
I would encourage my colleagues to oppose this motion to instruct and
continue to support the work of the Agriculture Committee.
I yield back the balance of my time.
Mr. FLAKE. I've enjoyed this back-and-forth. Let me just say that
it's implied again that we don't know what we're talking about somehow,
that somehow we're divorced from the farming community and we don't
know what they go through.
Let me just say, if you look at the end of my right index finger,
it's gone. I left it in an alfalfa field at age 5.
I don't know all the ins and outs. I've been away from farming on a
real basis for a while. But it's not a complete alien world to me, and
certainly not to my family and relatives.
But let's get back to what we're talking about with this motion to
instruct. We're talking about not a safety net at all. We're talking
about direct payments, in many cases to farmers who don't farm at all,
that is not tied to crop prices, whether they're high or low. This is a
relic of reform attempts in the 1990s when we were trying to wean
farmers away from subsidies that didn't happen. But these subsidies
still remain, despite the fact that the other subsidy programs came
back.
And all we're saying here is that, let's keep the limit at current
law, at
[[Page H2930]]
$40,000 per person, not increase it to $60,000 per person. Yet we're
being accused of trying to completely dismantle the family farm by not
increasing the subsidies that are being paid out right now. We're
simply saying they should remain where they are in current law.
So despite all the talk about stable food prices for citizens of the
United States, or whatever else, remember, this motion to instruct has
nothing to do with that. This simply has to do with a program that
gives direct payments to people who, in many cases, do not farm at all,
that has no tie to crop prices, whether they're high or whether they're
low.
Let me simply say also that the administration said this week, this
plan would result, talking about the current iteration of the farm
bill, this plan would result in the continuation of farm subsidy
payments to individuals with extremely high incomes.
The administration also said, this is not reform, and does not move
Congress closer to a farm bill that the President would sign.
I certainly hope that the President sticks with that commitment. We
need a farm bill that honors our commitment to have some fiscal
responsibility here. Upping the limit of direct payments, increasing it
by 50 percent, is not fiscally responsible.
So I would encourage my colleagues to join us in voting for this
motion to instruct. Discount the debate that doesn't have anything to
do with this debate on whether or not the conferees should accept the
current subsidies or increase them.
With that, I thank the gentleman from Wisconsin for his words and for
all those who have participated. I would encourage a vote in favor of
the motion to instruct.
I yield back the balance of my time.
The SPEAKER pro tempore. Without objection, the previous question is
ordered on the motion to instruct.
There was no objection.
The SPEAKER pro tempore. The question is on the motion to instruct
offered by the gentleman from Arizona (Mr. Flake).
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Mr. FLAKE. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this question will be postponed.
____________________