[Congressional Record Volume 158, Number 88 (Tuesday, June 12, 2012)]
[Senate]
[Page S3935]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                          Direct Farm Payments

  Mr. NELSON of Nebraska. Mr. President, the amendment I wish to talk 
about today and propose is about fairness. It is about fairness for 
America's farmers and ranchers and fairness to all taxpayers.
  First, I note that one of the key elements of the 2012 farm bill that 
we drafted in the Senate, and is now on the floor, is about reform. In 
particular the bill reforms a program of Federal subsidies that have 
gone to farmers regardless of whether farm prices were high or low.
  These subsidies are known as direct farm payments. They were 
established by the 1996 farm bill as a way to transition producers away 
from a government-controlled system of agriculture to more market-based 
agriculture.
  These direct farm payments, which are outdated government subsidies, 
were supposed to be temporary, and the 2012 farm bill takes the 
necessary step to eliminate them and remove them from the future.
  When this change is enacted, farmers will not be paid for crops they 
are not growing on land they are not planting. Eliminating these direct 
payments will save $15 billion over 10 years, which will be used for 
deficit reduction.
  Producers in my State understand that given our Nation's fiscal 
problems, we have to have shared sacrifice to get the debt and deficit 
under control. If we end these outdated subsidies, the farm bill 
establishes that crop insurance will be the focal point of risk 
management by strengthening crop insurance and expanding access so that 
farmers are not wiped out by a few days of bad weather or bad prices.
  Crop insurance is a shared private-public partnership that maintains 
the safety net we all need to sustain American agriculture. In my 
efforts to identify other areas where shared sacrifice for deficit 
reduction can be pursued, I am proposing an amendment to eliminate 
another set of government subsidies which are unnecessary and should be 
eliminated. These subsidies go to just 2 percent of the Nation's 
livestock producers. They receive substantial taxpayer-paid subsidies 
for grazing on public lands.
  In the interest of fairness to all livestock producers and the 
taxpayers, we need to reform Federal grazing subsidies. My amendment 
would require that ranchers pay grazing fees based more closely on the 
market value for their region when grazing on public lands. Today, the 
2 percent of livestock producers grazing on public lands pay far below 
market value that other market producers are paying.
  Given our huge Federal debt and deficit, we can no longer afford to 
heavily subsidize an elite group of ranchers to graze their cattle on 
public lands at the taxpayers' expense. These ranchers receive a 
special deal--Federal ``welfare'' so to speak--that they don't need, 
most ranchers can't get, and taxpayers should not be paying for.
  It is a matter of fairness to level this playing field, and it will 
help balance the budget as well. This 2 percent of the country's 
ranchers have grazing rights on public lands that cost the government, 
by lost income, $144 million a year to manage. But the government 
collects only about $21 million a year in grazing fees from ranchers, 
according to a 2005 study by the GAO. That leaves a net cost to 
taxpayers of more than $120 million a year. Losing the $120 million of 
tax money per year isn't fair to taxpayers, nor is it fair to producers 
who then are required to subsidize their competition.
  This report also found that the two agencies that manage most of the 
Federal grazing lands--the Bureau of Land Management and the U.S. 
Forest Service--actually reduced grazing fees during years when grazing 
fees on private lands increased. Get that: The Federal Government 
reduced fees on public lands when fees are being raised on private 
lands.
  The GAO found that from 1980 to 2004, BLM and Forest Service fees 
fell by 40 percent. At the same time, grazing fees charged by private 
ranchers rose by 78 percent. By an actuary's term, that is 
disintermediation. One is going one direction and the other another 
direction.
  Furthermore, GAO found if the goals of the grazing fee were to 
recover expenditures, BLM and the Forest Service would charge $7.64 and 
$12.26 per ``animal unit month.'' That is much higher--get this--than 
the current $1.35-per-animal unit ranchers pay to graze on public 
lands. That is not fair.
  The GAO stated that the formula used to calculate the fee includes 
ranchers' ability to pay and is not ``primarily to recover the 
agencies' expenditures or to capture the fair market value of forage.'' 
No kidding. That is what they said and what they think this program is 
all about.
  In Nebraska, it costs livestock producers who get this special deal 
$1.35 per cow to graze on public lands. But it costs other producers 
who don't graze on public land an average of $30 per cow to graze on 
private land just in northwest Nebraska. It costs an average of $38 per 
cow on private land just across all of northern Nebraska. That is 
according to the University of Nebraska's agriculture economics 
department.
  I note that I am aware others before me have tried to reform Federal 
grazing fees, and they are saying to me right now: Good luck. Given 
today's critical need to get our Nation's fiscal house in order, it is 
time to bring grazing costs on public lands more in line with what it 
costs producers to graze on private lands. There is no fairness in this 
disparity.
  I urge my colleagues to join me in working to improve the 2012 farm 
bill reforms by ending unfair and outdated Federal grazing subsidies. 
Doing so would bring fairness to all livestock producers and have the 
added benefit of saving taxpayers more than $2 billion over the next 
decade--savings that could help pay down the national debt and reduce 
our deficit in the meantime.
  With that, I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Michigan is 
recognized.