[Congressional Record (Bound Edition), Volume 146 (2000), Part 1]
[Senate]
[Pages 796-799]
[From the U.S. Government Publishing Office, www.gpo.gov]



                     ``DON'T BE DOWN ON THE FARM''

  Mr. DASCHLE. Mr. President, last week I joined several of my 
Democratic colleagues at a hearing on the agriculture crisis that is 
forcing many family farmers out of operation. We heard a number of 
witnesses tell compelling stories about how the 1996 ``Freedom to 
Farm'' Act has failed them and their communities.
  Lori Hintz, a registered nurse and farm wife, talked about the impact 
of the '96 farm bill on her community in Beadle County, South Dakota. 
She emphasized that farmers are not the only ones in her area that are 
struggling.
  When farm prices are depressed in a rural community--like they are in 
Lori's--small businesses, health clinics and schools also feel the 
pinch. Lori spoke eloquently about the urgent need to invest in rural 
communities and promote a healthy farm economy, thereby reducing out-
migration and preserving the way of life that built and still defines 
the Midwest.
  I believe I speak for all Democratic Senators who participated in 
last week's hearing when I say that the testimony presented by each 
witness was both powerful and thought-provoking. That testimony only 
strengthened our determination to address the agriculture crisis facing 
this country.
  Few people have a better appreciation for the problems confronting 
our family farmers, and for what we in the

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Senate need to do to fix those problems, than my close friend and 
colleague, Senator Byron Dorgan. Senator Dorgan has stood throughout 
his public career as an effective and tireless advocate for America's 
family farmers and ranchers, and his perspective on the economic 
difficulties felt by many rural residents merits the undivided 
attention of policymakers in Congress and the Administration.
  Today, I would like to express my gratitude and appreciation to 
Senator Dorgan for an article published in a recent edition of the 
Washington Monthly that presents a poignant and persuasive argument for 
the family farm. I commend this article, entitled ``Don't Be Down on 
the Farm,'' to my colleagues' attention.
  Senator Dorgan knows this topic as well as anyone. We have all 
learned from Senator Dorgan's entreaties, many of which have been 
delivered in this chamber, about the economic challenges facing the 
people to whom we entrust the safe and abundant production of our 
nation's food and fiber supply. We have listened to Senator Dorgan's 
impassioned oratory about conditions in rural North Dakota, and how the 
economic survival of many communities in his state depends on 
successful family farms. His words resonate deeply in me, because they 
often evoke similar scenarios in my state.
  In his article, Senator Dorgan makes a number of important 
observations--things we know to be true, but that too often are 
recklessly discounted in the crafting of farm policy. He reminds us of 
the proven efficiency of family farms, and how viable family farms 
translate into robust, successful communities. He also asks a question 
to which we still have not received a persuasive answer. What does 
society gain by replacing family farms with corporate farming 
operations?
  Senator Dorgan also reminds us of the social costs that we may all 
have to bear for the emergence of corporate agriculture, including the 
challenge of waste disposal, the threat of related environmental 
degradation and the loss of a valued way of life.
  Finally, Senator Dorgan asks whether we will take steps necessary to 
ensure the survival of family farms and ranches for the future. That is 
a question of interest to many members in this chamber, and one to 
which we simply must find the right answer.
  The eloquence and urgency of Senator Dorgan's message reinforces the 
views of the many Senators who want to secure a strong future for our 
country's family farms. I appreciate both the effort and conviction 
evident in the article, and thank Senator Dorgan for his commitment to 
this vital issue.
  I ask unanimous consent that Senator Dorgan's article be printed in 
the Record.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

               [From the Washington Monthly, Sept. 1999]

                       Don't Be Down on the Farm


             What we can do to preserve a national treasure

                       (By Senator Byron Dorgan)

       A Traveler through Western Europe these days observes 
     something unusual to American eyes. Family-based agriculture 
     is thriving there. The countryside is dotted with small, 
     prosperous farms, and the communities these support are 
     generally prosperous as well. The reason, of course, is that 
     Europe encourages its family-scale agriculture, while America 
     basically doesn't care. The difference was apparent at the 
     World Trade Organization meetings in Seattle. The European 
     representatives were talking about families and communities, 
     while the Americans talked about markets. You listen to the 
     speeches, as I did, and a question looms up in your mind. If 
     American trade representatives think these European values 
     represent the problem, just what do they think represents the 
     solution? If prosperous rural economies are not a worthy goal 
     then what is?
       The question is of great urgency among U.S. farmers these 
     days. Out beyond the prosperity of Wall Street and Silicon 
     Valley, the producers in America's food economy are 
     struggling for survival. The weather has been miserable. 
     Prices for some commodities are at Depression-era levels. 
     Imports are soaring, and giant agribusiness firms are 
     squeezing out farmers for a bigger share of the food dollar. 
     In this setting, farm auctions have become a grim daily 
     counterpoint to the Wall Street boom.
       The stories are wrenching beyond description. I received a 
     letter from a woman whose son refused to get out of bed the 
     day the family farm was auctioned off. His dream was to 
     become a farmer like his dad, and he couldn't bear to watch 
     that dream get sold off by a bank. Suicides among farmers are 
     now three times the rate of the nation as a whole. One Iowa 
     farmer left a note that said, ``Everything is gone, wore out 
     or shot, just like me.''
       Many in the opinion class offer an obligatory regret and 
     then wonder why we should care. Family farmers are just 
     poignant footnotes to the bright new economy, they say, like 
     the little diners that got left behind on Route 1 when the 
     interstates came in. ``The U.S. no longer needs agriculture 
     and is rapidly outgrowing it,'' said Steven Blank, an 
     economist at the University of California at Davis. In his 
     view, farms, like steel mills and television factories can 
     move to low-cost climes abroad, and should. ``It is the 
     improvement in the efficiency of the American economy.''
       Most express themselves in more diplomatic terms. But 
     that's basically the expert view. An economy is just a 
     mathematical equation and efficiency, narrowly defined, is 
     the ultimate value. If family-based agriculture disappears, 
     so be it. This view isn't just distasteful. It is 
     shortsighted and wrong.
       The fact is, family-based agriculture is not unproductive 
     or inefficient, even by the narrow calculus of the economies 
     profession. (I'll go into that a little later.) First off, if 
     we care about food, we will not welcome an economy in which 
     control of the food chain lies in a few corporate hands. 
     Monsanto-in-the-Fields is not everyone's idea of the food 
     economy they want. But the basic issue here goes far beyond 
     food. It speaks to us as citizens rather than just as 
     shoppers; ultimately it concerns the kind of country we are 
     going to be. The family farm today is a sort of canary in the 
     mine shaft of the global economy. It shows in stark terms 
     what happens to our lives, our communities, and our values 
     when we prostrate ourselves before the narrow and myopic 
     calculus of international finance. So doing, it raises what 
     is probably the single most important economic question 
     American faces: What is an economy for?
       For decades the nation has listened to a policy 
     establishment that views the economy as a kind of ``Stuff 
     Olympics.'' The gold medal goes to the nation that 
     accumulates the most stuff and racks up the biggest GDP. 
     Enterprise is valued only to the extent it serves this end. 
     But what happens when we produce more stuff than we need but 
     less of other things, such as community, that we need just as 
     much? Do we continue our efforts to produce more of what we 
     already have a glut of? Or do we ask a different question? If 
     Americans say we need stronger families and better 
     communities, then we need to question whether our economic 
     arrangements are contributing to those ends. If we really 
     believe in traditionally family values, then should we not 
     support the form of agriculture--and business generally--
     based upon those values?
       There's a way to save our family-based agriculture. Harry 
     Truman had the answer more than fifty years ago. Put simply, 
     Truman wanted to confine the agricultural support system to 
     the family-sized unit. This would promote a modern and 
     productive farm economy and healthy rural communities too. It 
     would begin to align our economic policies with our 
     traditional family values and social ideals. But in order to 
     see the value of this approach, we have to put off the 
     mythologies and ideological blinders that dominate the debate 
     today.


                             Over The Edge

       These mythologies start with the assumption that the 
     struggles of family farmers are Darwinian proof of their own 
     unfitness to survive. The fact is, family farmers are in a 
     bind today because of deliberate actions and inactions here 
     in Washington. An impartial market didn't decree their 
     difficulties. Policy makers did. Yes, there has been lousy 
     weather, an expensive dollar, and the collapse of crucial 
     markets in Asia. These come with the territory. Since the New 
     Deal, the federal government has sought to help farmers get 
     through such tough times.
       What's different now is that government has tried instead 
     to push family-based producers over the edge. The push 
     started with the trade agreements that opened the U.S. wide 
     to foreign production. Advocates of NAFTA and GATT promised 
     American producers vast new markets, yet today America's 
     trade deficit has reached record levels, and the balance of 
     agricultural trade is heading in the same direction. You need 
     that right. The coal is pouring into Newcastle. By the 
     sublime logic of the global economy, a nation that has 
     depressed prices of durum wheat is importing durum wheat, 
     fruit, poultry, and meat as well.
       This did not happen because American farmers are backward 
     or inefficient. It happened because of a high dollar, which 
     works against exports; and because American trade negotiators 
     have been more attentive to the needs of corporate food 
     processors than to the farmers who grow the food. The U.S. 
     trade agreement with Canada is a prime example. Before that 
     agreement the U.S. imported virtually no durum wheat from 
     Canada. (Durum is the kind used in pasta.) The

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     U.S. trade representative at the time, Clayton Yeutter, 
     assured Congress in writing that the agreement would have no 
     effect on grain. Yet durum was pouring across the northern 
     border almost from the moment the agreement took effect. 
     Today, Canadian imports comprise nearly 25 percent of U.S. 
     processed durum. These imports nearly doubled in the first 
     five months of 1999 alone.
       Some call this the Invisible Hand. But it has a lot more to 
     do with something called the Canadian Wheat Board, a 
     government agency that handles every bushel of wheat produced 
     in Canada. The Wheat Board publishes no price information, so 
     the workings of the Canadian market are inscrutable to U.S. 
     farmers. There are subsidies for grain handling and 
     transportation that give Canadian producers a further edge. 
     Canada is not an exception. Most nations try to protect their 
     own food production, and understandably so. They have long 
     memories of wars that made food a precious commodity; and as 
     true conservatives they value their rural traditions and 
     cultures.
       So tough luck you say: The consumer is king, and cheap 
     imports mean low prices at the supermarket. This degradation 
     of the producer was not what Jefferson and others had in mind 
     when they founded our republic. But that aside, if you think 
     the farmer's travail has been the consumer's gain, you might 
     check your local supermarket. Somehow, those Depression-level 
     prices on the farm haven't shown up on the bar codes. Prices 
     of hamburger and bread have inched up, even as farm prices 
     have plummeted.
       Someone is getting the spread, and that someone is the food 
     processing and packing industry, which has scored big off the 
     misery of U.S. farmers. The big four cereal manufacturers 
     have returns on equity of upwards of 29 percent even as 
     farmers go bankrupt. From a loaf of bread that costs $1.59 at 
     the store, the wheat farmer gets about five to six cents. In 
     1981 the wheat farmer got about double that. The processors 
     can reap where the farmer sows, in large part because the 
     industry has become so concentrated in recent years. When 
     Ronald Reagan become president, the top four beef processors 
     controlled about 36 percent of the market. Today the figure 
     is over 80 percent. A wheat farmer today is dealing with a 
     grain industry in which the top four firms control 62 percent 
     of the business. This means a marketplace with the power to 
     say, ``take it or leave it.''
       The antitrust laws are supposed to prevent this kind of 
     bullying. But decades of erosion at the hands of 
     ideologically-disposed economists and judges have reduced 
     these laws to mere ``husks of what they were intended to 
     be,'' as the late Justice Douglas put it. Moreover, budget 
     cuts during the Reagan-Bush years crippled antitrust 
     enforcement just as the current merger wave was gaining 
     momentum. Even after modest increases under Clinton, the 
     antitrust budget has fallen in real terms since the late 
     1970s. The Microsoft trial has gotten a lot of headlines. But 
     when Cargill, the nation's number one grain exporter and the 
     largest privately-held company, can buy the grain operations 
     of Continental, which is number two, with barely a peep from 
     Washington, then the cops aren't exactly walking tall on the 
     antitrust beat.
       There is a pattern here. The U.S. government has undertaken 
     to remake the world in the image of the multinational 
     corporation--an image in which all economic problems get 
     reduced to mathematics. Family-based production has stubborn 
     loyalties to locality and place. It provides a buffer against 
     the ruthless--and often misleading--mathematics of the 
     market. Therefore the government seeks to engineer it out of 
     existence and to replace it with the corporation that has no 
     such inconvenient human tendencies. This was the implicit 
     logic of the Farm Bill of 1996.


                           failing the farms

       The Farm Bill of 1996 was touted as a radical break from 
     the past. Proponents said that it would ``free'' farmers from 
     the stifling bureaucracy of the federal government and enable 
     them to make their fortunes in the global marketplace. They 
     called the bill--with mordant irony--the Freedom to Farm Act. 
     It seemed plausible in the flush times of the mid-'90s. But 
     the agricultural marketplace soon cratered, and farmers found 
     out quickly what the bill really left them free to do--Get 
     Out of Farming Fast.
       Put simply, the bill phases out the federal-price support 
     program over a period of seven years. During that time, it 
     doles out between $5 billion and $6 billion a year in 
     transition payments, supposedly to wean farmers off the 
     federal supports. These go to all agricultural entities, 
     regardless of size and regardless of need. The bigger you 
     are, the more you get--no matter how much money you have 
     sitting in the bank.
       It sounds like a parody of a government program. Yet that's 
     how the bill works--or, more accurately, doesn't work. A year 
     after the bill took effect, Congress was enacting 
     ``emergency'' relief to help undo the damage it had just 
     done. Congress just enacted another emergency measure this 
     year. There is no end in sight. Congress buys a little quiet 
     while the nation's family-based producers twist slowly in the 
     wind.


                         community matters too

       From the time Franklin Roosevelt established the first 
     farm-support programs during the Depression, a central 
     question has gone unresolved: What is the farm program really 
     for? People in Washington have always wrung their hands over 
     hard-pressed family farmers. But the programs they've enacted 
     have favored the biggest farmers and hastened the demise of 
     the smaller ones. In its many permutations, the farm program 
     has proceeded on the assumption that the mode and scale of 
     production don't matter, and all that counts is a given 
     quantity of beef or grain. This view dominates the policy and 
     media establishments and the result is a facile cynicism 
     regarding efforts to help the family-based producer. We need 
     to reexamine this assumption. The embrace of text-book 
     orthodoxies tends to blind reporters to economic reality, and 
     to the social dimension of economic enterprise.
       In reality, a family-based enterprise such as a farm 
     produces much more than corn or wheat. It also produces a 
     community. One might say it has a social product as well as a 
     material product. This social product is invisible to 
     economists and policy experts because they see only what they 
     can count in money. But it is crucial in a nation that has 
     more stuff than it knows what to do with but less community 
     and stability than it needs.
       This is not rural romanticism. I'm talking about the 
     opposite--the ways that family-based enterprise provides a 
     matrix for community life. A small town cafe, for example, 
     contributes much more to the life of a rural community than 
     its financial balance sheet would suggest. It is a hub of 
     social interaction, a crossroads where people meet in person 
     rather than just as blips on a computer screen. It serves to 
     reinforce the formal organizations in the town, from the 
     volunteer fire department to the PTA. Cafes are so important 
     to small-town life that in Havana, North Dakota, (pop. 124) 
     folks actually volunteer at the local cafe to keep it open.
       Family-based agriculture is a prolific source of social 
     product. Study after study has documented this effect. The 
     most famous was that of Walter Goldschmidt of the University 
     of California, comparing two California farm communities in 
     the 1940s. One was comprised of small and medium sized family 
     farms; the other of large scale producers. The localities 
     were similar in other significant respects. Goldschmidt found 
     that the family farms produced a measurably stronger social 
     unit. People showed ``a strong economic and social interest 
     in their community. Differences in wealth among them are not 
     great, and the people generally associate in those 
     organizations which serve the community.'' The locality with 
     larger farms, by contrast, had a more pronounced class 
     structure, less stability, and less civic participation.
       This will come as no surprise to people who grew up in such 
     settings. The family and community values that people give 
     speeches about in Washington are a fact of daily life. I 
     remember a farmer in my home town of Regent, North Dakota, a 
     fellow named Ernest, who had a heart attack around harvest 
     time. His neighbors took their combines and harvested his 
     grain. The economics textbooks call these farmers 
     ``competitors,'' and if they were corporations they would 
     behave that way. But because they are real people they acted 
     like neighbors and friends.
       The social dimension of enterprise is crucial even in 
     conventional economic terms. Francis Fukuyama, the respected 
     writer on social dynamics, developed this subject in his book 
     Trust. ``Virtually all serious observers understand,'' he 
     wrote, ``that liberal political and economic institutions 
     depend on a healthy and dynamic civil society for their 
     vitality.'' Society needs enterprise but enterprise also 
     needs a society.
       Jefferson was right. The kind of agriculture we choose 
     affects the kind of communities we have and the kind of 
     nation we are going to be. A nation that tries to divorce the 
     processes of production from larger social concerns--as 
     policy experts do--eats its own seed corn. Neglect the social 
     product of private enterprise, and we create the conditions 
     for our own decline.


                       small farms are efficient

       Against this, we have to ask what's to gain by displacing 
     family-based farming with corporate agribusiness firms. The 
     answer is, very little.
       The supposed efficiency of corporate-scale operations has a 
     large dose of hype. Farms can reach peak efficiency at well 
     within the range of a family operation. Michael Duffy, an 
     agricultural economist at Iowa State University, has found 
     that corn and soybean producers in that state reach the low 
     point on the production cost curve at between 300 and 500 
     acres. The top 10 percent of pig producers, based on cost of 
     production, averaged 164 sows.
       Wheat farmers reach lowest costs at a somewhat larger 
     scale, but still well within a family-sized operation. The 
     belief that bigger corporate operations mean more productive 
     agriculture is just a ``bunch of crapolla,'' Duffy says.
       The claims of efficiency, moreover, ignore the costs that 
     sprawling agribusiness operations impose upon the rest of us. 
     Partly these costs are social. When there are no neighbors to 
     drive Aunt Ella a hundred miles to the clinic, she has to use 
     a taxpayer-funded van instead. But the biggest costs may be

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     environmental. Corporate pig factories, for example, have 
     become a nightmare for their neighbors. They foul local water 
     supplies and emit a colossal stink into the air.
       A county in Illinois actually had to reduce property 
     assessments by 30 percent in the vicinity of such a plant. In 
     North Carolina, which has emerged as a pig factory haven in 
     recent years, Hurricane Floyd caused massive flooding of the 
     huge lagoons that hold the wastes. The sludge spread over the 
     countryside and leached into the groundwater. Residents were 
     advised to drink bottled water and even to have their wells 
     redrilled. That might be efficiency for the corporation. But 
     it's not for the neighbors, nor for the society as a whole.
       I see an economist scowling in the back row. If people want 
     social product, he mutters, then they would demand it in the 
     market.
       But that's precisely the problem. Americans can't speak 
     through the market unless the market gives them an effective 
     choice, and under current arrangements they don't have one. 
     When we buy pasta or pork chops at the supermarket there's 
     nothing on the label to tell us the kind of farm it came 
     from.
       Markets are the best means we have for allocating 
     resources, when people have both information and choices and 
     when all costs are accounted for. But they don't work so well 
     when information and choice are lacking the costs get shifted 
     into others, and that's what happens with agricultural 
     production today. Farmers aren't getting full compensation 
     for their production, including social product. They should. 
     The question is how.


                            the brannan plan

       After his improbable reelection in 1948 President Harry 
     Truman introduced a farm bill that had a truly far-sighted 
     provision to limit federal farm supports to the family-sized 
     unit. Farmers could become bigger if they wished. They could 
     produce as much as they thought they could sell. But they 
     couldn't expect the federal government to support all their 
     ambitions.
       The Brannan Plan as it was called--after then Secretary of 
     Agriculture Charles Brannan--would have made it the policy of 
     the United States that scale and social impact matter, in 
     agriculture at least. Not surprisingly, the larger farm 
     interests opposed the Brannan Plan (though mostly on other 
     grounds) and it died a quick legislative death.
       In the 50 years since, the farm program has gone from one 
     extreme to the other--from supporting everything in sight to 
     hitching the nation's farmers to a market ideology in a world 
     that doesn't always buy it. We've shed crocodile tears over 
     family farmers while promoting their demise. Now the 
     congressional majority is in a quandary. Republicans know 
     they have to do something. But many on that side can't bring 
     themselves to face the implications. So they heap more blame 
     on government, rail at the Federal Reserve Board and the 
     government's failure to open more foreign markets, and hope 
     the problem will just go away.
       To be sure, the Federal Reserve Board is a deserving 
     target. When you hand the management of the economy over to 
     money center bankers, then farmers, who rely heavily on 
     credit, are going to get shortchanged. But it's not enough to 
     rail at the Fed. We need to put someone on the Fed who 
     understands the value of family-based farms and who can 
     provide some balance to the economists and bankers who run 
     the place now.
       It is good too that Republicans want to open up foreign 
     markets, but we've also got to develop new domestic markets. 
     Since people can eat only so much, that means new uses for 
     farm products. Ethanol barely scratches the surface. There 
     are many materials, from plastics and building materials to 
     paper and inks, that are being made from crops. In Minnesota, 
     farmers are getting from $20 to $50 an acre for selling the 
     right to capture the wind energy from their land. David 
     Morris of the Institute for Local Self Reliance has sketched 
     out the possibilities in a report called, suggestively, ``The 
     Carbohydrate Economy.''
       Farmers need more bargaining power in the market too, not 
     just more points of access to it. Senator Paul Wellstone of 
     Minnesota and I have proposed a moratorium on mergers in 
     agriculture-related industries, and a complete review of the 
     antitrust laws as they affect this part of the economy. The 
     measure failed to pass this fall, but we will introduce it 
     again.
       But by far the most important issue is the economic safety 
     net. No matter what else you do, farmers are going to 
     confront bad years. There has to be a support structure of 
     some kind, and it should advance the social values of this 
     country rather than undermine them. Harry Truman had the 
     right idea. There should be a support price for an amount of 
     production that is within the range of a family-scale 
     operation. (This would vary by crop and region of the 
     country, of course.)
       Beyond that, producers would be on their own. If they 
     wanted to exceed the support range and take their chances in 
     the world market, then more power to them. But we wouldn't 
     ask the taxpayers to support a scale of operation from which 
     there is no social benefit and for which there is no economic 
     need.
       This approach would not encourage overproduction, since 
     there would be built-in limits on the amount of production 
     that was supported. The caps would be enough to sustain a 
     family-sized operation in bad years, but they would not make 
     anyone rich. This approach would begin to compensate farmers 
     for their contribution to rural communities--a form of 
     production for which the global market provides no monetary 
     return. It would recognize that the efficient destruction of 
     community in America is not the kind of efficiency the 
     government should encourage.
       If this country can subsidize a public-housing program for 
     millionaire athletes and billionaire owners called pro-sports 
     stadiums, then surely it can provide a safety net for the 
     family-scale agriculture that contributes so much to this 
     nation. Anyone who thinks big corporations are less likely 
     than small enterprises to ask for government help hasn't been 
     paying much attention. Big companies, not little ones, get 
     bailed out in America. Already, the corporate pig factories 
     in North Carolina have asked for millions of dollars from 
     Congress to help upgrade their waste lagoons.
       An economy is supposed to provide for human need. At a time 
     of material abundance but social scarcity, shouldn't we 
     encourage forms of enterprise that meet the needs of our 
     dwindling communities? If we truly believe in traditional 
     family values, shouldn't we support the forms of enterprise 
     that embody those values, including the family farm?
       The crisis in the Farm Belt is one problem America knows 
     how to solve. We have both the means and the resources; the 
     question is whether we will use them.

                          ____________________