[Congressional Record (Bound Edition), Volume 149 (2003), Part 1]
[House]
[Pages 42-45]
[From the U.S. Government Publishing Office, www.gpo.gov]




                    THE DROUGHT AND ITS CONSEQUENCES

  The SPEAKER pro tempore (Mr. Ose). Under the Speaker's announced 
policy of January 7, 2003, the gentleman from Nebraska (Mr. Osborne) is 
recognized for 60 minutes.
  Mr. OSBORNE. Mr. Speaker, I sat here with a great deal of interest 
listening to the previous speakers and the fact that Republicans were 
at cocktail parties and out with lobbyists, and I am a Republican and I 
am still here. I was very interested in the comments that I was 
listening to. I am not a very partisan person. I believe very much in 
fairness and balance. When I heard the President's economic stimulus 
package characterized over and over again as another round of tax 
breaks for the rich, what I was surprised that somebody did not answer 
was that part of the plan is $3.6 billion going to the States that are 
to be distributed in $3,000 increments to the unemployed as they pay 
for transportation and child care and training to get back into the 
workforce.
  Now, the unemployed are not by definition wealthy people. So that 
$3.6 billion does not go to the rich. The child tax credit increases by 
$400 per child. Now, not all children, certainly in the United States, 
are born to the wealthy. So a family of three would have $1,200 
additional money in their pocket, and many of those families will be 
poor families. The marriage tax penalty has been accelerated. For the 
average married couple, that will mean $1,716 that they will receive. 
Certainly, not all married couples in the United States are wealthy. 
Many that I know are not wealthy at all. Mr. Speaker, 92 million tax 
filers this year will receive an average tax cut of $1,083. We 
certainly do not have 92 million tax filers in the United States this 
year that are wealthy people.
  Finally, let me just say this. There has been a lot of mention of the 
dividends and how the dividends were tax breaks for the rich. But what 
most people do not seem to bother to mention is that roughly 40 percent 
of the American population now owns stock. Not all of those 40 percent 
are wealthy people. Many average wage-earners own stock and will 
benefit from any stock dividend reduction.
  So just in the interest of fairness, Mr. Speaker, I thought we might 
mention the fact that there were some things that were not mentioned 
here this evening as we talked about the stimulus package, and I am not 
for sure what it is going to look like. I am not sure how it is going 
to play out. But I do know that it is not targeted only for the upper 5 
percent or only the upper 10 percent of taxpayers. Certainly a good 
number of people will benefit.
  But that is not what I am here for tonight, Mr. Speaker; it is not 
why I came over here. From the previous discussion, one can assume that 
what happens on this floor much of the time is aimed at discussion of 
the economy, tax breaks have been mentioned, a lot of discussion about 
Medicare at times, and certainly the Middle East, what is going on in 
Iraq, what is going on in North Korea. And these are all very, very 
important subjects. But the subject that we very seldom discuss here is 
somewhat amazing to me and that is something that is going on right 
here, right now in the United States; and it involves almost one-half 
of the country, and that is the drought. We almost never hear that 
discussed on the floor of this House. We almost never hear it discussed 
in our major metropolitan areas or in our major metropolitan 
newspapers.
  So, Mr. Speaker, here is the map of the drought. This is what it 
looks like. In August of 2002, at the end of the growing season, this 
is what the drought looked like, and this was the impact that it had on 
our crops in 2002. So what that means, if one looks at the black area, 
that is exceptional drought; and those areas experienced, for the most 
part, drought that exceeded any records that go back over 100 years of 
recorded history of precipitation.

                              {time}  1845

  So we see large areas like this. The red areas would, for the most 
part, exceed the drought that we experienced in the thirties, the Dust 
Bowl, where tons and tons of Earth were blown away and crops were 
totally nonviable; and thousands and thousands of farmers left farming 
and ranching.
  So we can see, Mr. Speaker, that this is a rather drastic picture. 
The bad thing is, it has not improved for the most part. In some areas, 
it is much worse now than it was then. In my home State of Nebraska, 
the month of December which just passed was in most cases the driest 
December ever recorded, so things have not improved at all.
  Let us talk a little bit about why this is. Why do we not hear about 
this more? The reason is, I believe, that there are roughly 2 million 
farmers and ranchers in the United States today. That comprises a 
little bit less, actually, than 1 percent of the total population of 
the United States in farming and ranching. Probably in this drought 
area we have about one-half of the farmers and ranchers in our country, 
so we are talking about one-half of 1 percent that are directly 
impacted by this. Their way of living, their livelihood, is impacted by 
the drought. One-half of 1 percent sometimes does not make much of a 
ripple.
  Mr. Speaker, that is why I have decided not to go to the cocktail 
parties and not to go out with the lobbyists tonight, as we have heard 
earlier was happening with the Republicans. That is why I am here on 
the floor tonight to talk about this, because very few other people are 
talking about it. It is something we need to look at because it has 
huge implications for this country, and for its economy and for its 
well-being.
  Let me talk a little bit about the effects of the drought. Some of 
these areas are forest lands in Wyoming and in Colorado. One thing that 
was interesting, in examining the rings, the growth rings on the trees, 
we can pretty much tell when the droughts occurred. Some of those trees 
are 300 years old. 2002 was the driest year in

[[Page 43]]

many of those areas in the last 300 years. The timber in those forests 
was drier than the lumber in the lumberyard that had been put through a 
kiln, so that shows the impact that the drought had on our forests and 
on our lands.
  The reservoirs in these areas that are stored primarily for 
irrigation are at this time 25, 30 percent, in some cases as low as 15 
or 20 percent, full. The bad thing, Mr. Speaker, is that the inflows 
into those reservoirs are greatly reduced from other years. The 
snowpack even for this winter is way, way below normal, so there is 
almost no chance of any great recovery this year. So we are looking at 
some really reduced irrigation waters for those people who irrigate out 
of those reservoirs.
  Normally, an irrigator could count on somewhere between 90 and 100 
days of water. This year, many of those irrigators have already been 
told that those reservoirs will only provide maybe 20 to 30 days of 
water, which means essentially that they cannot plant, because they 
cannot grow anything on 20 to 30 days of water.
  Also, many people who would receive normally 20 to 24 inches of water 
out of a reservoir this year are going to receive 2 or 3 inches of 
water; so again, those people are having to convert to dry land. They 
are having to put their irrigated land into pastures and other types of 
products, and as a result there is a tremendous financial loss in those 
areas. The pastures in these areas have simply dried up, so there is no 
hay. There is nothing for the cattle to eat. As a result, what has 
happened is a great many of our ranchers have had to sell at least 
part, and in some cases nearly all, of their cattle.
  The problem with that is that when we start reducing the breeding 
stock, and some of these breeding stocks have been put up over 
generations and of course have tremendous value, but when they can no 
longer provide food for them and they have to sell the breeding stock, 
then it is not long before the whole thing unravels, and it will take 
5, 6, 7, or 8 years to rebuild the breeding stock. There has been 
tremendous devastation in these areas, particularly in the livestock 
industry.
  On top of the farmers and ranchers, we also find that the small towns 
that really service those farmers and ranchers are in bad shape, too, 
because the implement dealers, the feed and seed dealers, have no 
money. The merchants, the bankers, all of these people are experiencing 
extreme hardship in these areas.
  Currently, just in my State alone, the State of Nebraska, the 
economic devastation of this particular drought is estimated to be $1.4 
billion. That was as of September or October. My estimation is it will 
probably go closer to $2 billion. If we multiply that by Kansas, South 
Dakota, Montana, Wyoming, Colorado, New Mexico, and Arizona, all of 
these other States, we are talking about a disaster in the range of 15 
to $20 billion. This is huge for this part of the country, and it is 
something that we need to think about and we need to do something 
about.
  In Nebraska, the nonrenewable farm loans this year will increase by 
roughly 400 percent which, if that plays out, and I believe that it 
will, we will probably lose somewhere between 3,000 and 4,000 farmers.
  The most terrifying statistic that we heard recently that the bankers 
gave me was that 25 to 50 percent of the farm loans in the State of 
Nebraska are in serious trouble, and they could not endure another 
2002. They would go under if we do not do any better; and, of course, 
the drought appears to be as bad in the coming year as it was in the 
past year, which would mean that we could lose as many as 15,000 to 
20,000 farmers that would not be able to renew their farm loans.
  So this is a very difficult prospect. It is something that is, I 
believe, unconscionable to not address. This is something that has to 
be done.
  What has been done so far to combat the drought? I think, in fairness 
to the administration, we need to point out the fact that they did 
provide $752 million in livestock compensation this past fall. This was 
taken out of section 32 of USDA. It did not require an act or any 
initiative here in the Congress, but it was done administratively. This 
money was greatly appreciated.
  There was also a livestock feed program that allowed ranchers to get 
vouchers to go down to feed stores and they could purchase some feed. 
Some people purchased their hay up on the Canadian border, and said 
that might help get them through the winter; so it was some help, but 
it is something that was maybe just a stopgap measure. The people in 
the ranching business are still in great difficulty; and the bottom 
line is that nothing so far has been done for the row crops, the people 
who grow wheat and corn and milo and soybeans. They have not received 
any type of aid at all.
  So let us take a look at what has been going on in terms of disaster. 
We see that for Hurricane Andrew and a typhoon $6.4 billion were spent 
by the United States Government; for the 1997 flood of a river, $738 
million. These, of course, are not due to drought.
  We every year give $5.59 billion to Israel, $3.94 billion to Egypt, 
and we give to many, many other countries where we are certainly 
concerned about their welfare. I certainly do not begrudge the money 
given to Israel or Egypt or whatever, but the interesting thing is that 
we do these things, and yet we seem to be at the present time turning 
our backs on a large segment of the United States, which is a little 
bit difficult to understand at this point.
  We say, now, why would we do this? Why do we turn our backs on our 
own people? A memo from the budget office said that a drought really is 
not like a natural disaster such as a flood or a tornado or a hurricane 
because a drought comes on more slowly. Since it comes on more slowly, 
then people have a chance to adjust; so they said a drought really is 
not something like other disasters that get disaster aid. It does not 
quite qualify. This was what somebody in the budget office wrote.
  I would have to believe that that person maybe had not been in 
agriculture, had not been on a farm, did not know much about it. We 
have the input costs to till the soil, buy a tractor, plant the seed; 
we have to fertilize; and after you have spent thousands of dollars to 
get the crop ready, then if you do not get any water, it may only take 
about 3 weeks at the right time and you lose the whole crop.
  So to say it does not come on suddenly, it may not be 15 minutes or 1 
day, but it does not take very long. We have had huge numbers of people 
out there who have simply lost their whole crop, it has occurred fairly 
quickly, and it was beyond their control. There was nothing that they 
could do about it.
  The other thing that I think has caused us to not come forward with 
any disaster aid has been the perception of the new farm bill that was 
passed last year. People would say, how in the world would that affect 
whether we had disaster aid or not? The perception of the new farm bill 
is that it has a huge amount of money in it; and because there is so 
much money in the farm bill, then that should take care of whatever 
disaster we might have.
  I would say that that perception is not accurate. I would like to 
show the Members some information here that I think pretty much 
illustrates this.
  In the last 3 years with the Freedom to Farm, the previous farm bill, 
we spent on average in 1999, in 2000, and 2001 $24.5 billion, $24.5 
billion. The new farm bill that was passed this last year is projected 
to cost a little less than $21 billion in 2002, 2003, 2004, and 2005, 
so actually there will be less money spent in the new farm bill than 
there was in the last 3 years of the old farm bill. So it does not seem 
to be quite as expensive as what we would have been led to believe.
  Now, the reason that the farm bill I think has gotten such a bad rap 
is that many of the urban newspapers really went after the President 
for signing the farm bill. I will read just a few of the editorial 
comments that we saw.
  First of all, in the Las Vegas Review Journal the headline was ``Farm 
Welfare.'' The editorial said, ``The House voted to slide backwards 
some 70 years, choosing socialism and abandoning market-based reforms 
in the Nation's Stalinesque farm policy in voting for a new farm 
bill.''

[[Page 44]]

  The Washington Post, the headline was, ``Cringe for Mr. Bush.'' The 
editorial ran: ``Mr. Bush signed a farm bill that represents a low 
point in his presidency, a wasteful corporate welfare measure that 
penalizes taxpayers and the world's poorest people in order to bribe a 
few voters.'' So the President took a tremendous beating here.
  In the Wall Street Journal, the headline was, ``The Farm State Pig-
out.'' The editorial said, ``That great rooting, snooting noise you 
hear in the distance, dear taxpayers, is the sound of election year 
farm State politics rolling out of the U.S. Congress. This alone 
amounts to one of the greatest urban-to-rural transfers of wealth in 
history, a sort of Farm Belt Great Society.''
  So it is only natural that the administration, after enduring this 
type of reaction, would say that they are very reluctant to step 
forward at this point with any further spending for agriculture. The 
thing we need to understand, however, is that some of the emergency 
payments that were paid to agriculture in 1999, 2000, and 2001 were 
paid out because of low prices. The prices were very low, so to keep 
farmers in business some emergency payments were given.
  For instance, the price of corn during this period, a bushel of corn, 
probably averaged about $1.70, $1.80 a bushel. The cost of production 
was around $2.20 a bushel, so in order to keep people in business some 
emergency payments were made. We are not talking about emergency 
payments anymore. We are not talking about that; we are talking about a 
natural disaster. So this is not because of low prices.
  The next thing we will look at here is what has happened this year. 
This is the projection, the new farm bill for 2002, roughly $19 
billion. Let us see what has actually happened this year with the 
drought.
  What has actually happened, Mr. Speaker, is that the $19 billion 
projected spending has not occurred. Instead, this year the farm bill 
will cost somewhere between $13 billion and $14 billion, a $5 billion 
to $6 billion shortfall. In other words, in the year 2002, we will 
actually spend about one-half of what we spent on average on the farm 
bill in 1999, 2000, and 2001; and yet this is being called the great 
farm State pig-out, that this is a fat bill. Obviously that is not 
true. We are spending roughly one-half of what we spent in the last 3 
years of Freedom to Farm.
  We will say, why did this happen? How could it have happened? What 
happened was the drought. What happened was that in corn production, in 
soybeans, in milo, in rye we are down about 10 or 15 percent because of 
the drought. Some people simply had no crops. When we have less supply, 
then the price goes up. When the price goes up, we have no farm 
supports. When people in Iowa, in Illinois, in Indiana have good crops 
and they have better prices, they get no farm payments because their 
prices are up. So as a result, ``we'' are saving, in quotes, we the 
government, somewhere in the neighborhood of $6 billion on this farm 
bill.

                              {time}  1900

  So the question would be, well, why would we not give some of that $6 
billion back to the people who caused it to happen in the first place, 
the people who had no crops, the people who experienced the drought? 
Because you get no farm payments if you do not have a crop. And that is 
what happened to these people. They have no crop. And so it would make 
sense to a lot of people that, yes, we would return some of that. But 
again we do not seem to be getting any movement in any direction. And 
the staple answer we get is, well, there is so much money in the farm 
bill, just take it out of the farm bill.
  Now, the problem that we have with that as we looked at the map, we 
can see that there was only part of the country that had the drought. 
And so we would have to convince the folks in Iowa, in Illinois, in 
Indiana, in Minnesota, in Texas, in Arkansas and Louisiana that they 
should take payment from their crops to give to South Dakota and North 
Dakota and Nebraska and Kansas and Colorado, and it seems that that is 
rather difficult to get done. People just do not seem to want to do 
that.
  So what has happened is we are between a rock and a hard place. We 
cannot seem to get the administration to say, yes, we will help the 
farmers; and we cannot get many people saying, yes, we ought to go into 
the farm bill, and I can see that too. So as a result we have a lot of 
people who are hurting, who are in bad shape; and I really do not know 
exactly what we are going to do at the present time.
  Let us talk a little bit more about the farm bill. This thing is 
greatly misunderstood. People do not understand why we have a farm 
bill. And so I would like to present one last graphic here, Mr. 
Speaker, and this is rationale as I see it for why we have a farm bill.
  Farming is a little bit different than most other industries. People 
who have WallMart come in their community and the hardware store goes 
broke, they say, nobody helps me. I used to be a football coach and if 
I lost a game nobody protected me and so they say, why should we help 
the farmers? Let me tell you a little bit of the rationale that holds 
up very well.
  First of all, farming is almost totally weather dependent. Now, most 
industries, most businesses in our country do not dissolve if you have 
a 15-minute hailstorm or if it does not rain for 3 weeks or if a strong 
wind comes through and knocks the wheat down. It does not happen that 
way, but farming is totally weather dependent.
  Number two, in farming it is almost impossible to control the 
inventory. You say, well, what does that mean? Well, if General Motors 
has too many automobiles out there and they feel there is a glut what 
they do is shut down an assembly line and they wait until things get in 
balance. But when you are growing wheat around the world, you really 
cannot say, well, Australia, you do not plant this year or, Canada, you 
cut down because you do not know what the worldwide production will be. 
You do not know where the droughts are going to be. You do not know 
what is going to happen so you cannot control the inventory. Now most 
businesses can control the inventory.
  Thirdly, producers do not set the price. If you are going to make a 
suit of clothes you will say, this is worth $500. This is what we will 
price it at. We will make a box of corn flakes. It will be $2.50. If we 
are going to sell a car it will be $30,000. So the manufacturer, the 
producer sets the price. But in farming the farmer does not set the 
price. The price is set for him. It is the local elevator, the Chicago 
Board of Trade that says corn is worth $1.60 a bushel this week, so 
much a pound for beef. And he has no choice. He does not set the price.
  Fourthly, farming is critical to national security. As long as you 
can go down to the grocery store and things are convenient and easy and 
there is plenty there, and you only spend an average of 9 percent of 
your income on food you do not really see a problem. There is no 
problem with national security. But those countries that experienced a 
shortage of food in World War II have a little bit different slant on 
things. And the other thing that we want to point out here in regard to 
national security, somebody mentioned in the previous hour, they were 
talking about petroleum, our dependence on OPEC for oil. Well, what 
happened was about 20 years ago we found that we could buy petroleum 
from OPEC for like $15, $20 a barrel. So we said that is a good deal. 
So we should shut down our own exploration. We shut down our own 
refineries. As a result we are now 60 percent dependent so foreign.
  People say that is still okay because we only pay $12 to $15 a 
barrel. That is no problem. But some economists have put a pencil to it 
and said the Gulf War cost us a lot of money, and the Gulf War was 
about oil. And we are maintaining a fleet and a military presence in 
the Middle East and we are now maintaining an even bigger presence 
which is due largely to oil. And what economists have said was that oil 
really does not cost us $15 a barrel. What it cost was more like $70 to 
$100 a barrel when you add it all in.
  Now, we can do the same thing to our agriculture. We can very quickly 
ship our agriculture to South America, to

[[Page 45]]

Australia, to Canada. And so the question is are we going to protect 
agriculture and are we going to keep it in the United States where we 
know what we have, and we have a secure food supply, and no matter what 
happens around the world we know we have got it here. Is that worth 
something to us? I think it is.
  Fifthly, there is no level playing field worldwide. The European 
Union subsidizes agriculture by more than $300 per acre. Now, again, 
you go back to toward World War II and most people in Europe understand 
the value of a food supply so they subsidize $300 per acre. Japan 
subsidizes agriculture more than $1,000 per acre. In the United States, 
get this, the United States, that fat farm state pig out farm bill 
subsidizes agriculture $45 per acre, roughly one-sixth of what the 
European Union subsidizes their farmers.
  The other thing to remember is that there is great competition from 
South America. In Brazil, for instance, a top grade of land will cost 
$250 per acre, land that would probably cost $2,500 an acre here in the 
United States. Labor costs an average of 50 cents an hour in Brazil. It 
would probably cost $10 an hour in the United States. And there are 
practically no environmental regulations in Brazil where we have a 
great many.
  So what we are saying is that the farm bill is necessary to enable 
our agriculture to be somewhat competitive and we think we are getting 
a pretty good bargain here at $45 per acre. And so is that agriculture 
worth saving? Is that worth some type of investment in terms of 
disaster payment to keep that here, to keep it in the United States, to 
keep these people viable? I guess my slant, Mr. Speaker, is, yes, it 
is. And so that is pretty much my rationale this evening.
  I guess one last comment, some people would say, well, we do not have 
any disaster aid because, number one, the drought is not a natural 
disaster; and of course I think I pretty well disputed that. Secondly, 
they have said the farm bill is too fat; and again I think we have 
offered some information to dispute that.
  But the third argument is this, that, well, that those people who 
have row crops have crop insurance so they do not need any help. Well, 
I think people in the United States need to understand the crop 
insurance program is viable and it is very important. It works very 
well if you have three or four good years, good yields and good 
production, and then all of the sudden you have a drought for 1 year 
and maybe then you have 3 or 4 more good years because the crop 
insurance will at least hold you in there. It will get the input costs 
back, because the most insurance you can buy for crop insurance is 85 
percent. Now, profitability is in the last 10 percent. So on crop 
insurance you do not make money. You probably still lose a little bit. 
But the problem is that when you have multiple years of drought, which 
we have had. Most of these farmers have experienced at least 2, 3, 4, 
some of them 5 years of drought. Every year of drought that you have 
the amount of insurance you can buy goes down because you have to 
average in those years where you had no production.
  So probably most of the farmers in those drought areas are insured at 
a 60, 65 percent level and they have been receiving that now for 2 and 
3 years. So they have been digging into their equity every year and 
some of them are to the point where they no longer have any equity 
left. So insurance is good for a 1-year situation, but when you have 
multiple years of drought which we have had, you have a disaster. And 
so that is where I believe at this point we need to step in.
  So we hope very much that this body, in the House, we hope in the 
Senate and we hope that the administration will begin to see what we 
are up against and the difficulty of the situation. We hope this will 
be treated like a natural disaster, like a hurricane, like a flood, 
like a fire. And typically the United States has stepped forward in 
those situations, and it is difficult to stand back and see a lack of 
responses in this case.
  Mr. Speaker, I appreciate this opportunity.

                          ____________________