[Congressional Record (Bound Edition), Volume 154 (2008), Part 5]
[House]
[Pages 7347-7353]
[From the U.S. Government Publishing Office, www.gpo.gov]




MOTION TO INSTRUCT CONFEREES ON H.R. 2419, FOOD AND ENERGY SECURITY ACT 
                                OF 2007

  Mr. FLAKE. Mr. Speaker, I have a motion to instruct at the desk.
  The SPEAKER pro tempore. The Clerk will report the motion.
  The Clerk read as follows:

       Mr. Flake of Arizona moves that the managers on the part of 
     the House at the conference on the disagreeing votes of the 
     two Houses on the Senate amendment to the bill H.R. 2419 (an 
     Act to provide for the continuation of agricultural programs 
     through fiscal year 2012) be instructed to agree to the 
     provisions contained in section 1703(b)(2) of the Senate 
     amendment (relating to a $40,000 limitation on direct 
     payments).

                              {time}  1915

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Arizona (Mr. Flake) and the gentleman from Minnesota (Mr. Peterson) 
each will control 30 minutes.
  The Chair recognizes the gentleman from Arizona.
  Mr. FLAKE. I thank the Chair.
  This motion to instruct conferees is simple. It would simply urge 
farm bill conferees to accept the Senate provision on the payment 
limits for annual direct payments, which is the same as current law. 
Again, we are simply asking to accept current law, rather than increase 
payments limitations. Let me explain.
  Under current law, farmers and eligible landowners can receive 
$40,000 per person in direct payments per year, not including a 
loophole that currently exists that enables that amount to be doubled. 
The House-passed farm bill seeks to raise this limit to $60,000 per 
person, while the Senate passed bill keeps the limit at the $40,000 
level as in current law. In essence, this motion to instruct conferees 
would simply say, retain current law. Don't increase the limit on how 
much a farmer or landowner can receive in direct payments.
  Direct payments are one of the three primary subsidy programs 
available for commodity crops, along with countercyclical payments and 
marketing loan payments. Direct payments are paid to farmers and 
eligible landowners that have had so-called base acreage that was 
historically farmed for program crops like wheat or cotton or corn. 
Direct payments go to farmers and landowners whether the whether they 
farm or not on the property and are independent of crop prices. Simply 
put, these checks are in the mail to eligible recipients, no matter 
what the price of commodities.
  While these payments were originally intended to transition farmers 
away from subsidies, it is unfortunate that they have come to take a 
permanent place in the entitlement spending landscape and that Congress 
is on the verge of upping the limits on how much recipients can 
receive.
  These payments cost taxpayers more than $5 billion a year, under the 
last farm bill, that is, and while the bill under consideration might 
cut them by a minuscule amount, taxpayers will still foot a staggering 
bill.
  These handouts are often distributed to landowners who don't farm. I 
have even heard anecdotes about rice farmers who later subdivide the 
land for mini-mansions even, and realtors will advertise that direct 
payments will come to the new landowners. Lucky them. Get a house on 
land that was previously a rice farm. You are going to be getting 
direct payments. How is that? How can we countenance a situation like 
that continuing?
  According to a recent analysis by the Environmental Working Group, 
with the present loopholes that are available to recipients, ``a total 
of 1,234 recipients collected direct payment subsidies worth $120,000 
or more, costing taxpayers $226 million total. One hundred forty-nine 
recipients got more than $250,000 in direct payments. The top 10 
percent of direct payment subsidy recipients in 2007 collected about 60 
percent of this government money.'' These are the payments on which the 
House-passed bill would increase the limit by 50 percent.
  We have a strong agricultural economy at present. Unlike the 
countercyclical and marketing loan programs, which, if you have a good 
agricultural economy, don't get paid out, this program keeps paying out 
no matter what. These are independent of crop prices.
  It is unfathomable that U.S. farmers that are enjoying historically 
low debt-to-asset ratios and consistently high cash receipts and robust 
farm export values, under this scenario the conferees would need to 
increase the limit on direct payments beyond the current $40,000 
limits. It is unfortunate. It looks like the 2007 farm bill will be a 
missed opportunity to reform the wasteful farm subsidy programs, like 
the one I have spoken about.
  As approved by the House, the best that can be achieved in terms of 
reform is a reduction in the income cap for payment eligibility 
programs from $2.5 million to $1 million or $2 million for married 
folks. Even though the administration has sought a $200,000 income cap, 
both the House and the Senate it seems, and it seems the conferees, 
appear content to continue to allow millionaires to receive farm 
payments. While acting as if real reform had been made on the income 
cap, the House-passed farm bill actually relaxes the limits on how much 
a recipient can receive in farm payments.
  We simply cannot go in this direction. We have been told again and 
again and again by both sides of the aisle that we won't have a farm 
bill that has the generous subsidy payments that we have had before, 
that there has to be reform. This is not reform.
  Some people may try to sell it and say we are getting rid of a 
loophole there, so we will have to increase this, and then we will 
phase it out at some other time. That is probably what we will hear. 
When you hear that, hold on to your wallet.
  You have to remember that this program that we are talking about, 
this direct payment program was instituted in the nineties as a way to 
transition farmers away from subsidies. Yet here it is still, a decade 
later, and we are talking about increasing it. So if anybody tells you 
we are increasing it so we can actually phase it out easier or somehow 
lessen payments that will go out, don't believe it. Don't believe it.
  Let's vote for this motion to instruct.
  I reserve the balance of my time.
  Mr. PETERSON of Minnesota. Mr. Speaker, I yield myself such time as I 
may consume.
  The conference committee is close to wrapping up work on the bill and 
we will have significant reform in the final package that comes out of 
the conference committee. I can assure people of that. Apparently the 
issue that is before us today is one small part of that whole package. 
Frankly, the discussion has not really focused that much on this part 
of the payment limit issue. It has been more on the AGI issue.
  But just so folks understand what happened here, we in our bill that 
passed the House made the most significant reform in this area that has 
been made in a long time, and that is to get rid of the triple entity 
rule and to require direct attribution. If you had told people 2 years 
ago that you were going to accomplish that, they would have thought you 
were crazy. So we did that in our bill. We are going to do that in the 
conference report.
  The reality of how this all works, with the limits, the internal 
limits that we have in the House-passed bill,

[[Page 7348]]

$60,000 on direct payments, $65,000 on countercyclical, it keeps the 
direct payment level for folks that had a triple entity at the same 
amount that it is under the previous system. So I will agree that we 
did in certain cases keep the direct payment limits the same as what 
they were in the past before we eliminated triple entity. And there are 
other factors in here, like limitations on countercyclical payments and 
so forth. So there is a lot of disagreement about how this should be 
done and so forth.
  There are a lot of statistics put out about who is getting what and 
what percentage they are of farmers. I would just like people to know 
that according to USDA, we have 2.1 million farmers in the country. But 
people would be surprised to find out what it takes to qualify as a 
farmer under USDA rules. It says that all you have to do is have $1,000 
of income from farming. Well, it doesn't even say that. It just says 
you have to be able to have had $1,000 of income. So you don't even 
have to sell $1,000. If you could have sold $1,000, you would qualify 
as a farmer.
  So all of these statistics are based off of 2.1 million farmers, when 
the reality is the true commercial farmers that produce 90 percent of 
the food in this country amount to 350,000. So you have a lot of folks 
in this system that really aren't farmers. You have got a lot of people 
that are hobby farmers, that farm on the weekend, and they are all 
being counted and they are all being used in these statistics that 
people like Mr. Flake and others use.
  That is fine. But what we have tried to do in the Agriculture 
Committee is focus on the real farmers, the people that farm every day, 
that are commercial farmers that produce 85 to 90 percent of the food 
in this country, and to provide them a safety net where they can get a 
loan from the bank in the spring and they can survive the bad years and 
keep farming. And that is not an easy thing. It is a very risky 
business, and it costs a lot of money to be in this business on a 
commercial scale.
  So we have, unfortunately in my opinion, and others will disagree 
with this, we got this system put on us in 1996 under a thing called 
Freedom to Farm, which I opposed as a member of the Agriculture 
Committee. The idea was we were going to have direct payments that were 
not tied to any production and that were based on past history because 
prices were good and the WTO wanted us to do this, and this was 
ideology run amuck.
  I said at the time that this is not going to work, this is a bad 
idea, that these prices are going to go down and we are going to have 
to rescue farmers, and that is exactly what happened.
  We spent $30 billion 2 years in a row to bail out farmers. That is 
more than the entire cost of these direct payments over 5 years. We 
spent that every year for 2 or 3 years to bail farmers out in 1998, 
1999 and 2000. So we get to the 2002 bill and people figured out, well, 
we have to put the safety net back. And they kept the direct payments. 
So now we went back to the old system, but we kept the direct payments.
  Well, if I had to do it, I would do it different. But that is the 
system we have, and that is the system that people want, especially in 
the South, because it is in their financial structure and it is how 
they organize everything. If I had my way, we would take those direct 
payments, we would raise the loan rates, we would raise the 
countercyclical target prices, we would have a stronger safety net. But 
the consensus is that we do some of each. So these direct payments 
serve as a base for farmers to go get a loan at the bank.
  For those folks that are concerned about food prices going up, the 
folks that have been pushing payment limits, what the effect of that 
will be is to raise food prices. So if that is what you want to do, you 
know, that is probably not going to be real popular. But whenever you 
get the government mucking around and deciding how big a farm should 
be, which is what you are doing, you are going to make the farms more 
inefficient and you are going to drive up the cost of farming. That is 
what you are going to do. And it is going to increase the cost of goods 
to consumers.
  So we have considered this. The committee had looked at it. We are 
looking at the limitation on direct payments, and there will be some 
changes in that area. But we have had this debate on the floor of the 
House. They have had it in the Senate. We appreciate Mr. Flake's input, 
but we think that what we are doing here now in the conference 
committee will be a better outcome that will provide a better situation 
for our farmers.
  Mr. Speaker, I yield 5 minutes to Mr. Neugebauer from Texas, a member 
of my committee.
  Mr. NEUGEBAUER. I thank the chairman.
  My friend from Arizona and I agree many times on many issues, but 
this is one on which I must disagree.
  There has been a lot of discussion about reform in the farm bill. I 
think before I go down and list some of the reform that is being 
considered in this current farm bill, I think we have to step back and 
look at what has transpired with the 2002 farm bill.
  The 2002 farm bill actually cost $25 billion less than what it was 
originally projected to cost. Let me repeat that. This is a Federal 
program that actually came in $25 billion less than what it was 
budgeted. I would ask my friend from Arizona; name me another mandatory 
program in the last 5 years that has come in under what was originally 
projected.
  Additionally, the Congressional Budget Office projection for what 
farm policy will cost has imposed for the baseline going forward a $60 
billion reduction over what was originally planned in 2002. The reason 
that that reduction is in place and the reason that this bill came in 
$25 billion less than what it was projected is because it was working 
the way it was supposed to.

                              {time}  1930

  And it was designed when commodity prices were low for there to be a 
safety net so that we could preserve that farm infrastructure. When the 
commodity prices are high, then the safety net was not available 
because there was no need for that safety bill. So when you look at the 
reform, $60 billion sounds like a lot of reform to me. Now I don't know 
about out in Arizona, but $60 billion in Texas is a lot of money.
  Additionally, one of the things, and I think the chairman alluded to 
this, is that both in the House and the Senate bill, the three-entity 
rule has been eliminated bringing some transparency; in other words, 
being able to boil it down, who is actually farming, and making sure 
that the farm safety net is actually available to those people that are 
involved, actively engaged in farming.
  The other thing that is going on here is that with the elimination of 
that three-entity rule, it is estimated that some 50 percent reduction 
will be affected, some of the operations that are currently under this 
bill. So that is a fairly good reduction when you look at 50 percent 
for some of those operations.
  Compared to the House and the Senate version, quite honestly, a 
$10,000 reduction has been on the table over the original House 
version. As the chairman mentioned, these discussions are still under 
way and we don't know what that final number is going to be.
  The other thing, and the chairman also alluded to this, because there 
has been a lot of discussion about are these payments going to 
millionaire farmers. And so one of the things that we have taken is 
steps to materially reduce the adjusted gross income figure, some 70 
percent reduction.
  Now I think the point that the chairman was trying to make, and it is 
a very important point, 30, 40, years ago farmers across America could 
farm a small piece of land and make a good living. Today, in a global 
economy where they are competing with producers all over the world, 
what they are faced with is, how do they get to a size that makes sense 
with today's cost of production and with today's cost of tractors and 
all the equipment necessary. And the days of a small farm being able to 
support a family are gone. So today, many farmers in my district, for 
example, are farming 3,000 and 4,000 and 5,000 acres, and this is

[[Page 7349]]

still a family farm. This is not a company that has a lot of employees; 
this is a family farm. And so when you look at those numbers, it takes 
a lot of money, it takes a lot of capital and investment for them to 
produce this many acres.
  Farmers are taking a big risk today. Yes, the commodity prices are 
up, and that is a good thing for farmers and producers. The bad news 
for them, though, is that their costs are up as well. Looking across 
fuel and fertilizer and all of those, in just the last few years 
production costs for commodities is up almost 25 percent.
  One of the things that, as we look at this farm bill, I think we have 
to step back and look at it and I think sometimes I get kind of amused. 
As we talk about this farm bill, only about 12 percent, Mr. Speaker, 12 
percent of this farm bill actually has anything to do with production 
of agriculture. A good portion of this farm bill has to do with food 
stamps and nutrition programs and conservation programs. While those 
may be worthy, I am not here to debate those, when we look at the 
production of the agriculture part, the part that actually allows 
American agriculture to produce food and fiber for Americans, we are 
talking about 12 percent of this bill having anything to do with that.
  So when you step back, why is that important to America? Why should 
America be concerned about having a good, strong agricultural industry 
in this country? Well, I will tell you why, Mr. Speaker. Right now, we 
are watching with amazement as we look at people, Americans across 
America having to pay $3.50 a gallon for gasoline. We have seen 
tremendous increases. This country today is energy dependent. That 
means that we wake up every morning looking for some other country to 
furnish the energy that it takes to run our country's economy. It is, 
quite honestly, a security risk to our country as well as an economic 
security risk to our country. And so how did we get in that situation 
is because we let America's infrastructure for producing energy fall to 
the wayside. We did not make it a priority.
  My greatest fear here today is that, as we move forward, if we begin 
to undermine American agriculture, who will then feed and clothe 
Americans in the future? Do the American people want to wake up every 
morning and wonder where we are going to get our next meal? What 
country is going to feed us?
  The SPEAKER pro tempore. The time of the gentleman from Texas has 
expired.
  Mr. PETERSON of Minnesota. I yield the gentleman an additional 2 
minutes.
  Mr. NEUGEBAUER. Because we let American agriculture infrastructure 
fall to the wayside. Our producers are competing on an unlevel playing 
field. I wish the playing field was level. If the playing field was 
level, we wouldn't need any of these programs, because American 
producers can compete with anybody in the world on a level playing 
field.
  Unfortunately, the WTO discussions that we have been involved in have 
not yielded much fruit. Many countries that our producers are competing 
with all across the world are competing against other countries that 
provide subsidies at a much greater level than we are providing under 
this underlying bill.
  So while I appreciate the gentleman from Arizona's concern about 
being fiscally responsible, I understand that he would like to see some 
reforms. I am here tonight to tell him that there are a lot of reforms 
in this bill. But at the same time, it is important to have a balanced 
bill to make sure that we have a strong agricultural economy in this 
country from this point forward so that when Americans wake up every 
morning, they are not going to worry about who is going to feed or 
clothe them.
  Mr. FLAKE. Before yielding to the gentleman from Wisconsin, let me 
simply say that we are not talking about the food stamp program here. 
We are not talking about nutrition programs or conservation programs. 
We are talking about direct payments. This is a different program. This 
is simply an effort to say, let's not increase the amount of money 
going to direct payments at a time when commodity prices are so high 
and when the farm community is doing so well. It just not make sense to 
reform by increasing the subsidy.
  I yield 5 minutes to the gentleman from Wisconsin (Mr. Kind).
  Mr. KIND. I thank the gentleman from Arizona for yielding me this 
time, and I commend him for this motion to instruct.
  Mr. Speaker, let me be clear: We need a farm bill, and we need one as 
soon as possible. It is planting season back home in the upper Midwest 
and the district I represent in western Wisconsin, and our farmers need 
some predictability. They need to know what the rules are that they are 
going to be operating under and producing under in the coming fiscal 
year and in the coming 5 years.
  But we also need a good farm bill, not a bad farm bill, one that is 
responsible to the American taxpayer and one that does well by the 
American farmer. And those of us who have been talking about much 
overdue and needed reforms under the commodity title, these subsidy 
payments to a handful of commodity producers in this country, have been 
saying, let's give farmers help when they need it but let's not when 
they don't.
  And the market conditions today are something we have never seen 
before. They are talking about $10 corn by this summer. Soybean, wheat, 
rice at an all-time high in the marketplace. Yet instead of trying to 
tighten up these subsidy programs and rein them in for some possible 
savings so we can address the other priorities in the farm bill, what 
is being proposed, to our understanding, and we haven't been privy to 
the conference negotiations that have been going on, is actually 
expanding direct payments from the current maximum level of $40,000 up 
to $60,000, and allowing dual entities operating on the same farm to 
qualify for the same amount of these direct payments.
  And to be clear, the direct payments bear no relationship to 
commodity prices, no relationship to production. They are something 
that go out automatically regardless of the marketplace. And, quite 
frankly, it is the least justifiable aspect of this farm bill today in 
light of the record commodity prices that exist.
  But we also need a farm bill that this President is comfortable in 
signing, and the administration has been clear from the beginning that 
they feel there is more room for reform under these commodity programs. 
We are not talking about the two other subsidy programs, the loan 
deficiency program or the countercyclical program, although there too 
they are ramping up the target price and the loan rates under those 
programs. We are only talking about the direct payments right now, that 
which goes out automatically to only five principal commodity crops at 
the expense of everything else that we are trying to accomplish in this 
farm bill, having a strong conservation title in light of the increased 
pressure that crop production is placing on sensitive and highly 
erodible land. And we are seeing that now with a lot of CRP acreage 
being taken out of CRP and put back into production.
  And what does that mean to the average person? That is going to 
affect quality water supplies throughout the Nation, it's going to 
affect habitat, wildlife populations, all of which depend on good land 
stewardship of these lands and knowing what land is highly erodible and 
what isn't. And that was the whole basis behind CRP to begin with, and 
yet that now is in jeopardy because of increased commodity prices.
  I don't begrudge, and I don't think anyone here begrudges family 
farmers getting a decent price finally in the marketplace. But where I 
am from in Wisconsin and talking to my producers, for years they kept 
saying: We don't like these subsidy programs, either. We wish we didn't 
have to rely on it. And if we could only get a decent price in the 
marketplace, we wouldn't have to. Well, guess what. That day has come. 
And now is an opportunity, never better in the history of the Congress, 
to start reforming these commodities subsidy programs right now

[[Page 7350]]

so that at the end of the day we are not painting this big bull's eye 
on the back of our farmers with more subsidy payments that are going to 
be challenged through the WTO and possibly taken away through the WTO 
challenges, just as Brazil has done with the cotton challenge that they 
successfully prevailed on. And this is only the beginning.
  Instead, we could redirect funding for what are called green box 
payments, conservation payments that also go to family farmers to help 
them be good land stewards but do not distort the marketplace and they 
do not distort trade policy, and it doesn't get us into trouble by 
these outside challenges that we may be facing in the future.
  So that is why I think this gentleman's motion to instruct is 
important. We understand it is in the 11th hour. I appreciate the hard 
work that the chairman and everyone involved in the conference has been 
doing. Putting together a farm bill is probably one of the toughest 
things to do in this place given the parochial interests, given the 
different ideas and opinions that go into deliberations. But we have an 
opportunity right now of maintaining an important safety net for family 
farmers in case things do go south in the commodity market, but at the 
same time starting to reform these subsidy programs so we are more 
responsible to the taxpayer but also helping our farmers modernize so 
they can be more competitive both domestically and abroad. Otherwise, 
again, we are setting them up for future challenges by loading up these 
subsidy programs to the extent that they have been occurring.
  I would be happy to yield to my friend from Arizona.
  Mr. FLAKE. I will yield the gentleman an additional 5 minutes, if he 
would like, as long as he wants.
  Mr. KIND. I probably won't need that much time. But, again, hard 
negotiations. We are getting into the final details of it. There is 
still an opportunity of producing a bill that the President feels 
comfortable with in signing, and that way the farmers know what they 
are operating under.
  But, again, these direct payments are probably the least justifiable 
program going forward today in light of what the marketplace is 
producing. And the futures market right now is looking astounding when 
it comes to these commodity crops, and that is going to be good for 
farm income and debt-to-asset ratio. For family farms, it has never 
been better. And that again speaks to what we think is a reasonable and 
justifiable goal of trying to reform these commodity programs so we can 
deal with the other priorities and still maintain an important safety 
net to the family farmer.
  Again, I thank my friend from Arizona for offering the motion.
  Mr. PETERSON of Minnesota. Mr. Speaker, before I recognize the 
gentleman from Arkansas, I would just like folks to know that these 
prices that everybody talks about, if you are a real farmer out there 
and goes to your elevator, you cannot get a contract at these prices. 
And if you really want to do something here on this floor that will do 
some good, it would be to keep this Wall Street hedge fund money out of 
the commodity market, which has run these prices up and created a 
bubble.
  People need to remember that these direct payments came about because 
of high prices, quote, back in 1996. We heard the same speeches. That 
is how we got these direct payments in the first place. And what 
happened? It collapsed. And I will tell you one thing that I know about 
farming, is that whenever you have good prices, farmers are very good 
at creating low prices, and they will do it again. And that is why we 
need a safety net.
  I yield to the gentleman from Arkansas such time as he may consume.
  Mr. BERRY. Mr. Speaker, I too want to recognize Chairman Peterson and 
Speaker Pelosi for the hard work and the dedication that they have 
exhibited as they have pursued this farm bill and the great job that 
they have done and continue to do to get us a farm bill.
  As I listened to these discussions, and I have heard them year after 
year, we go through this when we do the appropriations, we always have 
those that consider that they are more knowledgeable than the people 
that are actually in the business and have to make these businesses 
work and make them profitable. They know more about how to make this 
happen than the people that really do make it happen.
  One thing that we know, the only reason for a farm bill and a farm 
bill is to guarantee adequate production and processing capacity so 
that our people have a reasonably priced food and fiber supply.
  In a global marketplace, and we are certainly in a global marketplace 
in agriculture today, every country that has food security has a 
stronger farm bill than we do.

                              {time}  1945

  They have a better safety net than we do in this country.
  We absolutely know, just like the chairman said, these prices come up 
and they go down. Right now the price that you can see on the Chicago 
Board of Trade is in some cases 25 percent higher than a farmer can 
actually receive. And even then the prices that are available to them 
aren't too bad.
  But as the gentleman from Texas recognized, production costs, when 
some of these numbers were put in this bill or in the other bills that 
we have had, diesel fuel was 30 cents a gallon. It is $4 a gallon 
today, or over $4. You can say that about all of the production costs 
that a farmer has to face. The cost of machinery has gone up a great 
deal in the last couple of years. All of these things are necessary to 
have efficient production of food and fiber in this country. The same 
thing can be said about a farm bill. Without a farm bill as a safety 
net, this system cannot continue to function. And I offer as evidence 
that it has functioned successfully for a long time, that the American 
people feed themselves for a lot less of their disposable income than 
people in any other country in the world.
  Now you can't pick up a newspaper today or hear a broadcast news 
story for very long that doesn't talk about the high price of food. If 
you really want to see some catastrophic prices, just keep doing what 
these guys have tried to do over and over, year after year and continue 
to chip away at this safety net.
  Like the chairman said, I believe, or maybe it was the gentleman from 
Texas, they want the government to decide how big your farm can be. 
They don't even want you to be able to decide that I will farm part of 
it, my son will farm part of it. They want to use every tool that there 
is to try to mix that up and make it less efficient.
  In the South, in rice and cotton country, 2,000 acres is no longer a 
viable economic unit. You cannot be prepared to put in a crop on 2,000 
acres with a million dollars worth of machinery and another nearly 
million dollars worth of fuel and fertilizer and seed and chemicals. 
And there are those who don't think you ought to use fertilizer, and 
there are those who don't think you ought to use chemicals. But if you 
do those things, just be ready to produce whatever you are going to eat 
and your family is going to eat in your own backyard because we are not 
going to have the efficient production machine that we have in this 
country today that farm bills have made possible.
  And these people may have huge dollars invested, but they don't make 
huge profits. This is a very dangerous thing. We all know the damage 
that high fuel costs and high energy costs are bringing to our economy 
today. That is going to be an insignificant event when we lose the 
ability to be the most efficient producers of food and fiber that has 
ever existed in the history of the world.
  The American farmer doesn't have to take a second place to anybody in 
their ability to feed our people. They do it. It is the hardest work in 
the world. All they ask is a fair chance. All they ask is enough safety 
net so that they can get a loan from the bank and continue to do what 
they love to do and what they are really, really good at.
  We should be doing more to allow these wonderful entrepreneurs to do

[[Page 7351]]

what they have to do to be successful and to produce food that is 
inexpensive enough for us to buy it. There is no shortage of food in 
the United States of America today. But what these proposals will do is 
create a shortage that you can't fix. It will create a situation that 
you cannot take care of in any kind of a short time frame. You just get 
one crop a year.
  So I would ask this Congress, and I would ask the gentlemen, I know 
they have good intentions, unfortunately they have got bad ideas. This 
is something that we should not gamble with. We have got a system that 
we know works. I think it is inadequate, but at least give us this so 
that our producers can have the ability to continue to be successful.
  I once again thank the chairman for all of his hard work.
  Mr. FLAKE. Sometimes I think we are just talking completely in a 
vacuum here, that inside the Beltway here in Washington, that we see it 
somehow differently than the rest of the country. To hear the debate on 
the other side, you would think it was just one crazy guy from Arizona 
and another crazy guy from Wisconsin who think that we are out of 
bounds here. That is hardly the case, and I will read some of what the 
rest of the country is saying later.
  I yield 2 minutes to the gentleman from Wisconsin (Mr. Kind).
  Mr. KIND. I thank the gentleman for yielding.
  I have great respect for the gentleman from Minnesota, chairman of 
the Agriculture Committee, and my friend from Arkansas and their depth 
of knowledge when it comes to farm policy in this country. They have 
invested their careers in trying to understand these programs and how 
they work.
  But I have as much respect and admiration for my family farmers back 
home in Wisconsin, too. The gentleman from Arkansas is exactly right; 
these are hardworking individuals playing by the rules in a market that 
is set out for them. But when I have producers in my district in 
western Wisconsin coming up to me and saying, Ron, why are we still 
receiving these direct payments when the market prices are so good 
right now?
  I say, You know, you're right. We should be looking at this anew.
  The gentleman from Minnesota pointed out that the first time direct 
payments were introduced in a farm bill was back in 1996 as a 
transitional program to get away from these direct subsidy payments to 
the farmers.
  Now we are into the third farm bill, and instead of at least holding 
them constant, as the gentleman's motion would have us do, we are 
talking about increasing the reliance on these direct payments over the 
next 5 to 10 years.
  In my conversations with farm experts from Australia and New Zealand, 
they said they heard the same arguments down there when they weaned 
their producers off direct government subsidies for agricultural 
production, that this would spell disaster for the entire farming 
community in Australia and New Zealand. And now you would be hard-
pressed to go down to either one of those countries and find one farmer 
who wants to go back to the government-subsidized system that they were 
operating under all these years. They say that with a change of those 
subsidy programs, it has made them more efficient and more competitive, 
especially in the global marketplace.
  And whether we like it not, that day has arrived for our producers. 
The world is at our doorstep, and I don't think we are doing them any 
more favors by propping them up with these artificial subsidy programs 
with the strong market prices they are receiving, and at the same time 
telling them that you can go out and compete with everyone else around 
the globe.
  There is a better way of doing this while still maintaining a safety 
net, and I think that is what the gentleman is trying to get at with 
this motion.
  Mr. FLAKE. I appreciate the words of the gentleman from Wisconsin. I 
too have traveled to Australia and New Zealand, and I talked to the 
farmers there. They heard the same horror stories there. They worried 
about the same thing when they got rid of subsidies in New Zealand.
  As the gentleman from Wisconsin mentioned, you would be hard-pressed 
to find anybody who wants to go back to that system because, just as 
the gentleman from Arkansas just mentioned, they don't like the 
government telling them what they can and can't farm.
  A main element of this program we are talking about right now is that 
if you are to receive these direct payments, you can't farm specialty 
crops. You have to farm corn or wheat or rice. You can't do specialty 
crops. So for all of the talk about we don't want government telling us 
what we can and can't plant, that is a central element of this program 
that you accept those restrictions. There is something wrong with that 
argument when we say we don't want government to tell us; but yes, you 
can tell us as long as we can collect these direct payments.
  The gentleman from Arkansas said that prices are up high now, but 
they will go down. Yes, they will; but these direct payments will 
remain the same. That is the problem here. These aren't a safety net, 
these are just a direct subsidy in many cases whether you farm or not. 
That's the problem with this.
  And we aren't saying get rid of it. I would like to, frankly, if it 
were up to me. But we're not saying that. All we are saying is keep it 
the same. Don't increase it. Yet we are hearing the argument that 
somehow all of the family farms are going to go away unless we increase 
a direct payment that bears no relationship to crop prices at all. 
There is something wrong with that argument. So we are competing here 
in a vacuum.
  Mr. KIND. Would the gentleman yield?
  Mr. FLAKE. I yield to the gentleman from Wisconsin.
  Mr. KIND. One of the things that I have noticed back home in 
Wisconsin with the direct payments and the overall subsidy programs 
that exist for these commodity crops is that it is leading to greater 
consolidation. We know these subsidies have been primarily skewed to 
the larger entities, and they are using them to gobble up smaller 
family farms around them. And they are also driving up land values by 
artificially inflating these land values with the subsidy guarantees 
that attach to them, and it is making it virtually impossible for newer 
or beginning farmers to have the capital in order to invest in order to 
enter this very honorable work and profession.
  So that is the unintended consequences that these subsidy programs 
have brought in, putting the squeeze on smaller family farmers 
throughout America.
  I think it would be reasonable as well, although we can't address it 
in this motion, to have some reasonable means testing attaching to 
these direct subsidy programs. It is tough to justify to the American 
taxpayer that if someone is earning $900,000 in adjusted gross income, 
that is profit, that is after you back out the expenses and all of the 
deductions of doing business, that you would still qualify for subsidy 
payments.
  I understand in the course of negotiations there has been some 
movement, and hopefully that is a good thing; but nevertheless, that is 
a pretty hefty adjusted gross annual income for anyone. And then to say 
they still qualify for American-taxpayer subsidies at the end of the 
day, that is pretty tough to explain back home.
  Mr. FLAKE. I thank the gentleman.
  I mentioned that it is often said on the other side that it is just a 
couple of guys who don't know what they are talking about, and the rest 
of the country feels differently. Let me tell you what some people 
around the country are saying about this farm bill.
  The Minneapolis Star-Tribune wrote: ``The Senate passed a $286 
billion farm bill that makes only minor changes to the bloated 
agricultural subsidy system that rewards rich farmers for being 
farmers.''
  The Burlington, Vermont, Free Press: ``The farm bill making its way 
through Congress is a good example of what's wrong with the way major 
legislation gets passed in Washington.''

[[Page 7352]]

  The Boston Globe: ``That kind of calculation is just the sort of 
special-interest politicking that is making voters nationwide question 
what was gained by giving the Democrats power.''
  The East Brunswick, New Jersey, Home News Tribune: ``The farm bill is 
the sort of confounding public policy document that too often wins 
approval in Washington; it's stuffed full of pork and misdirected at 
the same time.''
  This is not a Republican issue or a Democrat issue. The Republicans 
passed, I thought, what was a far too generous, bloated farm bill back 
in 2002, and I believe the gentleman from Arkansas and I had a debate 
at that time.

                              {time}  2000

  So this isn't a partisan debate at all. This is a debate about what 
taxpayers should be required to pay.
  The Orlando Florida Sentinel: ``The system those lawmakers would 
perpetuate dumps billions of dollars a year in taxpayer subsidies on 
the farmers of a few crops, whether they need it or not. The largest 
commercial farms reap the bulk of the subsidies, while most growers get 
little or nothing.''
  The Charleston South Carolina Post Courier: ``So far the impulse to 
reform has been overwhelmed by the efforts of those representing the 
beneficiaries of farm program largesse.''
  The Winston-Salem, North Carolina Journal: ``The legislation that was 
designed to put American family farms back on their feet has now become 
the massive giveaway program to mega corporations that manage family 
farms. The farm bill is hopelessly bloated and outdated.''
  The Pittsburgh Pennsylvania Tribune-Review: ``The U.S. Senate has 
once again failed to slow the nonstop pigout in multi-billion dollar 
family farm subsidies.''
  The Bismarck, North Dakota Tribune said: ``The provision that would 
get wide agreement would require that government payments be attributed 
to an actual, named person, rather than to shadow entities that might 
even belong to people who do no farming themselves.'' We call that 
reform.
  The Lewiston, Maine Sun Journal wrote: ``The prospect of starving 
constituents is unpalatable. What's worse, though, is using them as 
chattel to negotiate subsidies for wealthy farmers.''
  As the gentleman from Wisconsin said, we're hardly talking about 
payments to those who are just getting by. In some cases, payments are 
going to those with adjusted gross incomes nearing $1 million. Yet 
we're saying, well, there are large expenses that farmers have. Yes. 
That's adjusted gross income after expenses are already backed out.
  So we're not a couple of guys here who are seeing things differently. 
I think we're seeing it as the rest of the country does. I think that 
this place is in a bubble sometimes when we discuss continuing a 
program to subsidize people who, in many cases, aren't farming, and 
having subsidies tied not to crop prices at all, not a safety net, mind 
you, but payments that go and go and go, regardless of whether or not 
crop prices are high or low.
  With that, I reserve the balance of my time.
  Mr. PETERSON of Minnesota. I have no more speakers, so if they're 
ready to wrap up, I am, I guess.
  Mr. FLAKE. May I inquire as to who has the final word.
  The SPEAKER pro tempore (Mr. Braley of Iowa). The gentleman from 
Arizona has the right to close.
  Mr. FLAKE. I will go ahead and reserve until the gentleman has 
closed.
  Mr. PETERSON of Minnesota. I will just say very briefly that, as I 
said earlier, we get kind of off on tangents here on talking about 
small farmers and so forth. But the effect of a lot of these different 
proposals on reform, the effect of them are going to be to raise food 
prices for people in this country and around the world, and if that's 
what you want to do, you know, you can talk to your voters about that.
  But 23 percent of the farms in this country have more than $50,000 of 
sales. But they do 90 percent of the business. They produce 90 percent 
of the food and they get 81 percent of the payments. So we already have 
changed things.
  But the point is $50,000, I think my good friend from Arkansas will 
agree, in our part of the world is not a real farm. You can't make a 
living on $50,000 of gross income on a farm. It's just not realistic.
  So when you get up to a realistic commercial size farm, they produce 
just about all the food in this country. Now there's some small farms 
that are developing that are doing pretty well, and I've been 
supporting that and we're supporting that for the first time in this 
farm bill; and that is people producing organic, people producing local 
foods, getting out of the commercial system.
  So there is a place for small farmers in these niche markets, and 
they're growing, and that's a good thing. But you go to those niche 
markets and you're finding you're paying a lot more money for that type 
of food. And a lot of people want that and that's great.
  If we get involved in this and screw up this system, the gentleman 
from Arkansas is correct, we're going to endanger the national security 
of this country. If we ever get in a position in this country with this 
food that we're at with oil, we've got significant problems.
  And this isn't a perfect system. When it was established, I voted 
against it. If I had my way, as I said earlier, I would not do it this 
way. But this is the consensus of people in the business of 
agriculture, the system that we have, that works so they can get 
financing and they can stay in business.
  And you hear about the WTO. One of the biggest objections to what I 
want to do, the direction I'd like to go with farm policy, is that we 
can't do that because the WTO would object. And we've got the World 
Bank out there getting these developing countries to adopt these free 
market ideas like some people have done in this country, and the effect 
of that has been to not help the people. It's made them more food 
insecure.
  So we're never going to settle this debate. As my friend from 
Arkansas said, we've argued about this for how long.
  We are going to produce a farm bill here pretty quick. It's going to 
have a lot of reform in it. It's going to have a lot of new initiatives 
that we haven't done before in organic, in energy. There's a lot of 
money in there for conservation. We're going to have $10 billion of new 
spending above the baseline. After we took a $58 billion hit in the 
commodity title, we added $10 billion not in the commodity title. We 
added it into nutrition. So we're adding $10 billion of spending, and 
10.261 of that, more than we've added to the bill, is going to 
nutrition to help people to cope with these high food prices.
  So we're doing, we think, the right things, putting in the right kind 
of initiatives in this farm bill. It's not going to satisfy everybody, 
but it's moving in what we think is the right direction for the 
country.
  I would encourage my colleagues to oppose this motion to instruct and 
continue to support the work of the Agriculture Committee.
  I yield back the balance of my time.
  Mr. FLAKE. I've enjoyed this back-and-forth. Let me just say that 
it's implied again that we don't know what we're talking about somehow, 
that somehow we're divorced from the farming community and we don't 
know what they go through.
  Let me just say, if you look at the end of my right index finger, 
it's gone. I left it in an alfalfa field at age 5.
  I don't know all the ins and outs. I've been away from farming on a 
real basis for a while. But it's not a complete alien world to me, and 
certainly not to my family and relatives.
  But let's get back to what we're talking about with this motion to 
instruct. We're talking about not a safety net at all. We're talking 
about direct payments, in many cases to farmers who don't farm at all, 
that is not tied to crop prices, whether they're high or low. This is a 
relic of reform attempts in the 1990s when we were trying to wean 
farmers away from subsidies that didn't happen. But these subsidies 
still remain, despite the fact that the other subsidy programs came 
back.

[[Page 7353]]

  And all we're saying here is that, let's keep the limit at current 
law, at $40,000 per person, not increase it to $60,000 per person. Yet 
we're being accused of trying to completely dismantle the family farm 
by not increasing the subsidies that are being paid out right now. 
We're simply saying they should remain where they are in current law.
  So despite all the talk about stable food prices for citizens of the 
United States, or whatever else, remember, this motion to instruct has 
nothing to do with that. This simply has to do with a program that 
gives direct payments to people who, in many cases, do not farm at all, 
that has no tie to crop prices, whether they're high or whether they're 
low.
  Let me simply say also that the administration said this week, this 
plan would result, talking about the current iteration of the farm 
bill, this plan would result in the continuation of farm subsidy 
payments to individuals with extremely high incomes.
  The administration also said, this is not reform, and does not move 
Congress closer to a farm bill that the President would sign.
  I certainly hope that the President sticks with that commitment. We 
need a farm bill that honors our commitment to have some fiscal 
responsibility here. Upping the limit of direct payments, increasing it 
by 50 percent, is not fiscally responsible.
  So I would encourage my colleagues to join us in voting for this 
motion to instruct. Discount the debate that doesn't have anything to 
do with this debate on whether or not the conferees should accept the 
current subsidies or increase them.
  With that, I thank the gentleman from Wisconsin for his words and for 
all those who have participated. I would encourage a vote in favor of 
the motion to instruct.
  I yield back the balance of my time.
  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to instruct.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to instruct 
offered by the gentleman from Arizona (Mr. Flake).
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. FLAKE. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this question will be postponed.

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