[Congressional Record (Bound Edition), Volume 148 (2002), Part 9]
[House]
[Pages 12454-12455]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        EQUITY IN FARM SUBSIDIES

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Michigan (Mr. Smith) is recognized for 5 minutes.
  Mr. SMITH of Michigan. Madam Speaker, today I rise to discuss the 
farm bill that will be up in full Committee on Appropriations tomorrow, 
and I suspect the plans are to bring

[[Page 12455]]

that legislation before this Chamber next week.
  I would like to discuss my and many others' beliefs that a great 
inequity exists in our farm policy that has been passed in the farm 
bill, and the fact that we have a chance to correct that inequity in 
this appropriations bill.
  This is not a new topic in Congress and, as well, it is not a new 
topic on the floor of the House. As a farmer and a former administrator 
of farm programs at USDA, as a member of the Committee on Agriculture, 
I, like most of us, know the importance of providing help to our family 
farms. The inequity of farm subsidies, because there is no limit on 
price support subsidy guarantees, results in giving the very large 
farmers a greater advantage. That means they have price protection on 
all of the total acreage of the particular crops that they grow that 
were subsidized by the farm program. That means that we encourage more 
production and that means that the smaller farmers have a harder time 
surviving and that means that the larger farmers tend to buy out the 
smaller farmers.
  While reasonable limits have been set for direct price support 
payments to farmers, these limits are meaningless to large or corporate 
farms. Why? Because of the creative use of generic certificates. Certs, 
as they were called, were introduced in 1999 as an amendment to the 
1996 farm bill.

                              {time}  1700

  They are negotiable certificates which CCC, the Commodity Credit 
Corporation, exchanges for a commodity owned or controlled by CCC. They 
were designed to let producers receive the price support subsidy rather 
than forfeit their crop to the government, but it gives that farmer a 
loophole, an end run, if Members will, to have the same price supports 
even though in the farm bill we were told that there are limits of 
$75,000 on price support payments. But the fact is that there is no 
limit on that larger farm that owns whatever, 40, 50, 60,000 acres, 
because he can end up receiving certificates that end up giving that 
particular landowner the same value as the rest of the price support 
loans that are subject to the $75,000 limitation.
  Sadly, farmers quickly figure out the loophole in the use of 
certificates that allows these unlimited price supports on the crops 
that a farmer grows. The more land one farms, the more certificates one 
can purchase, bypassing any limits that are otherwise existing in the 
farm bill in current law. The availability of this creative mechanism 
to bypass limits encourages overproduction and, as I mentioned, the 
buying up of land from smaller farms.
  This is the acquisition of as much land as possible to maximize 
payments from the government, and I think the bottom-line request is, 
why should 17 percent of the farms in America get over 80 percent of 
the commodity payments?
  I understood this principle long ago. I understood how forfeitures 
and certificates became literally overnight methods to circumvent 
payment limits. I introduced the reform of farm subsidy payments during 
the House debate on the farm bill last October; however, our farm 
policy, driven by our agricultural committee leadership favors the 
certificates that can be used as the loophole or end run to those very 
large farms.
  The Senate, however, successfully implemented reasonable payment 
limits and curtailed the unlimited use of generic certificates by a 
vote of 66 to 31.
  Then the farm bill came to conference, and on April 18, after days of 
stonewalling and nonresolution, I introduced a successful motion to 
instruct farm bill conferees to accept real subsidy payment limitations 
like the Senate had and limit the unbridled use of generic 
certificates; and a bipartisan majority of the House overwhelmingly 
passed that motion by a vote of 265 to 158. It was ignored in 
conference, and I am still working with Senator Grassley.
  Tomorrow, when the Committee on Appropriations meets to discuss this 
bill, I hope they will look at the effects on the small farmers, the 
traditional family-size farms, and have some kind of a payment 
limitation when this bill comes to the floor next week.

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