[Congressional Record (Bound Edition), Volume 145 (1999), Part 6]
[Senate]
[Page 8979]
[From the U.S. Government Publishing Office, www.gpo.gov]




           AGRICULTURE MARKET FAILURE PROTECTION ACT OF 1999

 Mr. SARBANES. Mr. President, I rise today in support of S. 30, 
the Agricultural Market Failure Protection Act of 1999. The purpose of 
this bill, of which I am co-sponsor, is to protect farmers against 
income loss resulting from severe economic downturns and weather-
related crop losses. In my view this legislation is very timely, 
considering the current status of our nation's agricultural economy.
  We have been experiencing alarming economic conditions in the 
agricultural sector for over two years. A combination of declining crop 
prices, reduced yields, and unfavorable export markets have led to a 
substantial decrease in overall farm incomes. As a nation, we often 
forget how important it is to protect the vitality of our agricultural 
producers. We do not want to wait until farms disappear and our 
supermarkets can no longer stock their shelves to address this 
situation.
  Farmers in my own state of Maryland are not immune to the effects of 
this crisis. Over the past two years, they have been hit hard by low 
commodity prices and a widespread drought that has destroyed a 
significant number of crops. The Maryland Agricultural Statistics 
Service reports that total farm income fell $8.2 million last year to 
$265.4 million overall. This was a 3 percent decline. Since 1996, farm 
incomes in Maryland have fallen 26 percent. Prices for grain, corn, 
soybeans, and hogs are all down, some at 20 to 30 year lows. A recently 
published article from The Baltimore Sun illustrates the impact of this 
crisis on the economy of Maryland.
  In an effort to address this decline, the Agriculture Market Failure 
Protection Act would revise marketing assistance loan rates, authorize 
six-month loan extensions, and amend the Internal Revenue Code to 
temporarily increase the number of years permitted for the carry back 
of net operating losses for certain farmers. In short, it would help 
prevent future income loss by giving farmers a chance to run their 
operations without constantly being at the mercy of the market. With 
these changes to the Agricultural Market Transition Act, farmers will 
be able to spread crop sales throughout the entire season, and 
subsequently allow them to take advantage of higher prices.
  The legislation which Senator Daschle has introduced leaves 
commodities in the hands of farmers, thereby allowing them to make 
their own marketing decisions for the future. I commend him for 
introducing this legislation, and in light of the current state of the 
agricultural economy, I urge all of my colleagues to support S. 30, the 
Agricultural Market Failure Protection Act of 1999.
  I ask to have printed in the Record the Baltimore Sun article.
  The article follows.

 Md. Farm Income Down 3% in 1998; Grain Growers Suffer Big Losses, But 
                     Poultry, Dairy Farmers Do Well

                            (By Ted Shelsby)

       The extra-fat paychecks of poultry farmers and dairymen 
     last year were not enough to offset big losses by grain 
     growers, and the state ended 1998 with a 3 percent decline in 
     net farm income, according to preliminary estimates released 
     yesterday by the Maryland Agricultural Statistics Service.
       Total farm income in Maryland fell $8.2 million last year 
     to $265.4 million.
       It was the second consecutive year that Maryland farmers 
     have been hurt by low commodity prices and drought. Farm 
     income last year was 26 percent lower than in 1996.
       ``This is going to have a serious impact on our rural 
     economy,'' Maryland Department of Agriculture Secretary Henry 
     A. Virts said.
       ``The farm equipment dealers are going to suffer. The feed 
     dealers are going to suffer. The truck dealers, restaurants 
     and furniture stores are going to suffer, too. Anybody who 
     serves the farm industry is going to feel the decline.''
       The drop in farm profit last year was blamed primarily on 
     low commodity prices and a summer drought that destroyed 
     grain crops in Southern Maryland and the Eastern Shore.
       ``Grain prices were down, down, down last year,'' said Ray 
     Garibay, head of statistics services for the Agriculture 
     Department, in releasing his net income estimate. He added 
     that the prospects for prices are no better for this year as 
     a result of large supplies of grain in storage.
       But not all segments of agriculture shared in the hard 
     times.
       Garibay said that 1998 will be remembered fondly by poultry 
     and dairy farmers.
       ``Last year was our best in the past 10 or 12 years,'' said 
     Lewis R. Riley, an Eastern Shore chicken grower and former 
     state agriculture secretary.
       ``Poultry prices stayed healthy throughout 1998, and in 
     most case farmers were paid a price bonus by the 
     processors,'' Riley said.
       He explained that the bonus, which totaled between $5,000 
     and $6,000 for his farm, is like a profit-sharing plan in 
     which the chicken processors pay farmers above their contract 
     price when wholesale poultry prices rise.
       ``It's a windfall for good prices,'' Riley said, ``and it 
     made 1998 a very good year for poultry growers.''
       State dairy farmers also benefited from record milk prices 
     late last year due to a shortage of milk caused by weather 
     problems in Southern California.
       Ed Fry, who operates a dairy farm near Kennedyville, said 
     farmers profited from a shortage of cheese and butter last 
     year. ``High milk prices, coupled with low grain prices, made 
     for a very good year for the dairy industry in general,'' he 
     said.
       Fry noted that the good times are coming to a halt. He said 
     the basic formula price of milk set by the U.S. Department of 
     Agriculture dropped 37 percent last week, and farmers will 
     feel the bite in their milk checks beginning next month.
       Grain farmers have been feeling a financial pinch for more 
     than a year.
       Melvin Baile Jr., past president of the Maryland Grain 
     Producers Association, said corn and soybean growers were 
     lucky to break even last year.
       ``Prices were off 20 percent for corn and the same for 
     soybean,'' said Baile, who farms 700 acres outside New 
     Windsor in Carroll County.
       He said the double whammy of low prices and poor yields was 
     particularly hard on Southern Maryland and Eastern Shore 
     farms that experienced the brunt of last year's 
     drought.

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