[Senate Hearing 107-898]
[From the U.S. Government Publishing Office]
S. Hrg. 107-898
AGRICULTURE IN RURAL COMMUNITIES DRAFTING AND IMPLEMENTATION OF A NEW
FARM BILL
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HEARING
before the
COMMITTEE ON AGRICULTURE,
NUTRITION, AND FORESTRY
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
__________
AUGUST 18, 2001
__________
Printed for the use of the
Committee on Agriculture, Nutrition, and Forestry
Available via the World Wide Web: http://www.agriculture.senate.gov
______
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WASHINGTON : 2003
____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
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COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY
TOM HARKIN, Iowa, Chairman
PATRICK J. LEAHY, Vermont RICHARD G. LUGAR, Indiana
KENT CONRAD, North Dakota JESSE HELMS, North Carolina
THOMAS A. DASCHLE, South Dakota THAD COCHRAN, Mississippi
MAX BAUCUS, Montana MITCH McCONNELL, Kentucky
BLANCHE L. LINCOLN, Arkansas PAT ROBERTS, Kansas
ZELL MILLER, Georgia PETER G. FITZGERALD, Illinois
DEBBIE A. STABENOW, Michigan CRAIG THOMAS, Wyoming
BEN NELSON, Nebraska WAYNE ALLARD, Colorado
MARK DAYTON, Minnesota TIM HUTCHINSON, Arkansas
PAUL DAVID WELLSTONE, Minnesota MICHEAL D. CRAPO, Idaho
Mark Halverson, Staff Director/Chief Counsel
David L. Johnson, Chief Counsel for the Minority
Robert E. Sturm, Chief Clerk
Keith Luse, Staff Director for the Minority
(ii)
C O N T E N T S
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Page
Hearing(s):
Agriculture in Rural Communities Drafting and Implementation of a
New Farm Bill.................................................. 01
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Saturday, August 18, 2001
STATEMENTS PRESENTED BY SENATORS
Harkin, Hon. Tom, a U.S. Senator from Iowa, Chairman, Committee
on Agriculture, Nutrition, and Forestry........................ 01
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WITNESSES
Bierschenk, Gary, Benton County, Iowa............................ 27
Bremley, Ron, Morley, Iowa....................................... 30
Demmer, Wayne, Livestock and Grain Producer...................... 24
Dietrich, John, Policy Analyst, American Corngrower's Association
and
Farmer's Union of Nebraska..................................... 28
Ginter, Larry, Member, Iowa Citizens for Community Development,
Rhodes, Iowa................................................... 23
Gray, Walter, Delaware County, Manchester, Iowa.................. 22
Heithoff, Jerry, Farmer, Nebraska................................ 19
Helbling, John K., General Manager of Economic Market
Development, Alliant Energy.................................... 10
Holdgrafer, Brian................................................ 31
Holdgrafer, Carrie, Farmer....................................... 31
Holecek, Lloyd, Marion, Iowa..................................... 34
Holmes, Mary Swalla, ISU Extension............................... 08
Jennifer......................................................... 31
Jepson, Mike, Seattle, Washington................................ 27
Krier, Jim, Ollie, Iowa.......................................... 04
Lamb, Gary, Farmer, Chairman, Farm Service Agency State Committee 20
McGivern, Ed, Farmer, Keystone, Iowa............................. 29
Paustian, Ross, Farmer, Walcott, Iowa............................ 03
Peters, Bruce.................................................... 32
Petersen, Chris, Vice President, Iowa Farmer's Union............. 28
Ryun, Deb, Executive Director of Conservation Districts of Iowa.. 06
Sand, Dwayne, Iowa Natural Heritage Foundation, Des Moines, Iowa. 33
Serbousek, Tony, Farmer, Johnson County, Iowa.................... 35
Smith, Therese, Representative, Farm Service Agency County Office
Employees...................................................... 35
Specht, John, Student, Mar-Mac................................... 20
Specht, Phil..................................................... 34
Stevenson, Rod, Farmer, Davis County, Iowa....................... 25
Thicke, Francis, Jefferson County................................ 26
Wilson, Brad..................................................... 19
Zacharakis-Jutz, Jeff, Farmer.................................... 28
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APPENDIX
Prepared Statements:
Harkin, Hon. Tom............................................. 38
Bierschenk, Gary............................................. 67
Demmer, Wayne................................................ 78
Ginter, Larry................................................ 74
Heithoff, Jerry.............................................. 64
Helbling, John K............................................. 59
Holmes, Mary Swalla.......................................... 57
Krier, Jim................................................... 44
Paustian, Ross............................................... 39
Ryun, Deb.................................................... 52
Specht, Phil................................................. 80
Stevenson, Rod............................................... 77
Document(s) Submitted for the Record:
Schafbuch, Al................................................ 88
Schiffer, Lois J., Audubon, Senior Vice President, Public
Policy..................................................... 82
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AGRICULTURE IN RURAL COMMUNITIES DRAFTING AND IMPLEMENTATION OF A NEW
FARM BILL
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SATURDAY, AUGUST 18, 2001
U.S. Senate,
Committee on Agriculture, Nutrition, and Forestry,
Washington, DC.
The committee met, pursuant to notice, at 10 a.m., at the
Moose Lodge, 1325 North Cedar Street, Tipton, Iowa, Hon. Tom
Harkin, [Chairman of the Committee], presiding.
Present or submitting a statement: Senator Harkin.
STATEMENT OF HON. TOM HARKIN, A U.S. SENATOR FROM IOWA,
CHAIRMAN, COMMITTEE ON AGRICULTURE,
NUTRITION, AND FORESTRY
The Chairman. The U.S. Senate Committee on Agriculture,
Nutrition, and Forestry will come to order.
Today we are having one in a series of field hearings on
agriculture in rural communities leading up to the drafting and
implementation of a new farm bill.
I am pleased to be holding it this morning here in Tipton.
Sorry I'm a little late. I apologize. We had to fly in and
there was some weather. We did get some good rain today. I am
pleased to be having this hearing and the testimony from this
panel will be made a part of the record.
I want to say at the outset that I am going to ask each
witness to talk for 5 to 7 minutes. I'll have some questions
for them, but I'm going to leave enough time for people in the
audience if you'd like to ask questions, make statements or
make comments. I'll do as much as I can in the time that's
allotted to us. If you've got something you want to say or
something for the record, I think we have some microphones
somewhere. Please state your name so she can get your name for
the court reporter. If it's an easy name like Smith, you don't
have to spell it. If it's a complicated name like Harkin, then
you better spell it out for her.
First, let me recognize a couple of people. Leroy Brown is
our state conservation, natural resources conservationist. I
saw Leroy here. Glad to have you here. Gary Land who is still
the Chair of the state committee of the Farm Services
Administration. Gary Land is back there, our State Committee
Chair. Next to him is Ellen. You may remember Ellen was the
state director for rural development for 8 years. The past
administration, of course, has changed hands now and she did
such a great job in rural development that we hired her. She is
now a staff member of the Senate. Sitting right behind me is
the staff director for the Senate Agriculture Committee, Mark
Halverson, from around Tama. He actually is a hands-on farmer.
It is nice to know that we have a hands-on farmer that is the
staff director of our committee. Next to him is Stephanie
Mercer who does all our economics work. She's a graduate of
Iowa State in economics so she's with us here today also from
the Agriculture Committee.
Farm families and people who live in rural America have not
shared in our nation's prosperity. We need new directions in
Federal agriculture and rural policies. The Freedom to Farm
bill may have had some positive features, flexibility and some
conservation, but it took away some very critical farm income
protection. Farmers need a better system instead of these
annual kinds of bail-outs and emergency bills that we pass
every year.
The new Farm bill should begin to set a course that all
farmers earn a better return and better share of the consumer
dollar in the market. Right now the farmer's share of the
consumer dollar is at the lowest point in our nation's history.
We have to ask ourselves the question: Do we just continue down
this road or do we try to add policies that will somehow get a
better return of the consumer's dollar to the farmer or are we
just going to go down the road and more and more of these
government payments go out? That's really the essential
question that we have to ask ourselves.
It also should focus on building opportunities for families
and people who live in rural communities. One out of fifteen
people who live in rural America farm. The rest live in small
towns and communities. They do rely on the farmers, they do
rely on the ag economy overall, but in many cases they need
off-farm income. We need jobs in small towns and rural
communities. Value-added processing ventures, biotechnology
products, new marketing channels and increased exports, all
these can help.
Farmers in Iowa and elsewhere have a tremendous ethic of
stewardship of the land. Too often they don't have the
necessary money to conserve natural resources as they want to
do. The new Farm bill should extend and strengthen the current
conservation programs. We need to create a new system of
conservation incentives. I have bipartisan legislation that I
have drafted to do that, to provide for more conservation
support on working land, provide more income to farmers on
their working lands.
I intend to put a new title in this Farm bill, an energy
title. I don't know how far it is going to get, but at least I
intend to do it. When we talk about getting more money for
farmers from the market I don't think we can just think about
the food and meat market. We've got to think about the energy
market also. That's things like ethanol, soy diesel, methane,
biomass, even wind energy, things like that. We need a new
title to do that.
Again, I mentioned rural economic development for water,
telecommunications, equity capital for investments. We have to
take a look at that also and see what can be included in the
Farm bill. Conservation, energy and a better conservation
program, farm income protection, stronger support for exports,
stronger support for rural communities and rural economic
development, I think all of these things have to be addressed.
If I have one complaint about what the House of
Representatives did when they reported out their farm bill from
their committee. It focuses simply on commodities. That's all.
The Farm bill has to be much broader than that. Again, I'm open
to any of your suggestions or comments on that.
With that, I will now welcome our panel. We have Ross
Paustian, a farmer from Walcott in Scott County, Jim Krier, a
farmer from Ollie, Keokuk County, Deb Ryun, Executive Director
of Conservation Districts of Iowa, Mary Swalla Holmes, ISU
Extension and John Helbling with Alliant Energy. We appreciate
all of you here because I think this is going to cover the
bases of the things I talked about.
All of your statements will be made a part of the record in
their entirety. I read through them last night and coming over
here this morning. What I'd like to ask you to do is to tell us
in your own words what you think we ought to have in the Farm
bill and where you think we ought to go. If you have any
examples you'd like to talk about, we'd like to hear that.
Please try to keep it to maybe 5 or 7 minutes, something like
that. I'm not going to bang the gavel. Is that all right? With
that we'll start with Ross Paustian. I hope I pronounced that
last name right.
[The prepared statement of Sen. Harkin can be found in the
appendix on page 38.]
STATEMENT OF ROSS PAUSTIAN, FARMER, WALCOTT, IOWA
Mr. Paustian. Good morning. My name is Ross Paustian and
I'm a farmer from Walcott, Iowa. Together with my wife and
parents and my brother and his wife we raise corn and soybeans
on a 900-acre farm. We also operate a farrow-to-finish hog
operation. I've been farming for 23 years. I appreciate the
opportunity to present my thoughts to the Committee on the Farm
bill.
The question that faces us is what type of program is
needed to help farmers weather the down years while giving them
opportunity in the up years? I believe Congress made the right
decision to eliminate the old supply management programs and
replace it with Freedom to Farm. At that time the Federal
budget was a political issue and many in agriculture didn't
want the same program with additional cost savings like
payments on fewer acres. We wanted flexibility. We wanted the
freedom to make our own decisions.
I would offer my thoughts on the development of the farm
policy in five different areas:
No. 1, the new farm program must stay within the World
Trade Organization amber box commitments. Nearly 50 percent of
the crop producer's income and 13 percent of livestock
producer's income comes from rural trade. We cannot afford to
ignore the impact that international trade has on our bottom
line.
No. 2, I support continuation of the AMTA program. Payments
to current contract holders should be continued, but producers
should be allowed a one-time opportunity to adjust their base
acres as provided for in the bill passed by the House Ag
Committee. In addition, soybeans should be added as a program
crop but producers must choose whether to shift planted acreage
from a current program crop to soybean payments.
Number 3, loan rates must be rebalanced. I support
adjusting loan rates for corn and other program crops so that
they are historical with the soybean loan rate. The soybean
loan rate should remain at $5.26. The next Farm bill can
provide additional marketing flexibility by allowing producers
to lock in an LDP rate at any time during the crop-marketing
year.
No. 4, Congress can improve the safety net of the Farm bill
by establishing a counter-cyclical income assistance program.
This program should be revenue-based and must fall within the
confines of the WTO guidelines.
No. 5, conservation programs should be expanded in this
Farm bill. Producers are facing increased pressures from
Federal regulatory programs such as EPA's animal feeding
operation rules, water quality standards and total maximum
daily load. The next Farm bill should eliminate the limits on
participation in cost share and technical assistance by larger
livestock producers.
I'm a family farm livestock producer and this farm supports
three families yet we cannot qualify for any cost or technical
assistance, yet we must meet increased state and Federal
regulations. I want to commend Senator Harkin for his
leadership to establish the environmental incentives programs.
A program like the one proposed in the Conservation Security
Act provides farmers like myself an opportunity to be rewarded
for the practices that I already have in place.
This Farm bill presents an opportunity to implement a long-
term strategy for agriculture while we address the short-term
economic problems facing many producers. I support your vision
to expand the scope of the trade title and provide more
opportunities for value-added agriculture through the rural
development title. I also believe this year presents us with
the opportunity to expand agriculture's role in our national
energy strategy. The last Farm bill was to be part of a three-
legged stool. Farmers would assume more of a risk and be
responsible for their own management and marketing decisions.
In return, Congress would expand our trading opportunities,
reduce the tax burden on family farmers and provide us with
regulatory relief. With the exception of tax relief, this has
not occurred. In fact, regulation of farmers has increased. I
urge you to look at the broad spectrum of policy issues that
impact agriculture as you design a recommendation for the next
farm program.
In conclusion, farmers look forward to working with you and
the Senate Ag Committee as we develop a new Federal farm
program. Thank you for the opportunity to testify.
[The prepared statement of Mr. Paustian can be found in the
appendix on page 39.]
The Chairman. Ross, thank you very much for your testimony.
Now we turn to Jim Krier.
STATEMENT OF JIM KRIER, FARMER, OLLIE, IOWA
Mr. Krier. Chairman Harkin, I'm Jim Krier, a farmer who
resides between the forks of the North and South Skunk Rivers
in Keokuk County. My wife, Mary, and I raise 900 acres of corn
and soybeans and finish approximately 2300 head of feeder pigs
annually. It's an honor to appear before you today to discuss
the needs of agricultural producers in terms of the pending
farm legislation.
First, I'd like to thank you for your leadership in
attempting to secure an adequate 2001 crop year economic
assistance package for the nation's farmers. As we all know,
not only have commodity prices remained low, but production
costs have risen dramatically because of the increased
petroleum costs.
Mr. Chairman, the current farm policy is not working. Since
the passage of the Freedom to Farm in 1996, crop prices have
declined almost 30 percent and input costs have increased. As a
result, a much larger portion of my income has come from
government payments and not the marketplace.
While I like the planting flexibility contained in the
current law, the rest of the program is far from adequate.
Farmers want to receive a decent price from the marketplace and
not from government assistance year after year. It's vital that
the new Farm bill put greater emphasis on creating demand for
our products and giving us the marketing tools to get a better
price from the marketplace.
Increasing demand in order to receive a decent price from
the marketplace should be the goal of the new Farm bill. It
should also contain a safety net that is truly a safety net.
This new safety net should be based on what we produce, what
our yields are and what our costs of production are in today's
dollars. The current safety net is flawed because it is based
on what I planted on my farm 5 to 10 years ago and what my
average yields were 16 years ago. We certainly don't need a
complicated safety net that doesn't reflect current costs of
production and market prices.
I would suggest raising the market loan rates and indexing
them to the cost of production. This is simple. It only helps
us when we actually need the help and it should only go to
those who actually produce the crops.
We also need to place a much greater emphasis on renewable
fuels. It's no secret that we currently have an energy crisis
as well as a farm crisis. The possible solution to both is the
production of energy from renewable commodities grown right
here in the Midwest, thus reducing our reliance on imported oil
and keeping those trade dollars in the U.S. The formation and
maintenance of a farmer-owned grain reserve could be used to
level out the peaks and valleys of ethanol production and
prices, thus helping to boost farm prices now and not several
years from now.
In addition, the safety net should be targeted to family
farmers. To discourage larger operations and further
consolidation, payment limitations should be strictly enforced.
I would also encourage you to look at adopting a voluntary
Flex-Fallow type of management program to help control excess
production capacity. This program is necessary to provide
flexibility for those times when supply continues to exceed
demand. No business can produce all that they want forever.
Agriculture is certainly no different. The Flex-Fallow program
would allow farmers to receive increased loan rates in return
for voluntarily idling their land.
The new Farm bill's foreign trade policy should include
country-of-origin labeling to ensure fair competition against
imported produce, meats and grains. There should be tariffs on
commodities and produce where differing labor and environmental
regulations represent a substantial difference in the cost of
production.
Rural development is another important part of the Farm
bill. I would like to see grants and development money to help
farmers develop, manage, and own value-added enterprises such
as ethanol plants, soy diesel, livestock processing, biomass
energy, farm-to-market fruit and vegetable production to name a
few. The farmer must be helped to do this in order to control
his product from farm to retail market. This is the only way
the farmer can capture more of the retail dollar.
Mr. Chairman, I would urge you to write a farmer-friendly
farm bill, a farm bill that provides balance and meaningful
economic safety nets for those who raise crops, a farm bill
that expands markets, a farm bill that reduces the negative
impact of surplus production and above all a new farm bill that
helps provide profitable prices for our commodities.
I'd like to thank you for your time, Senator.
[The prepared statement of Mr. Krier can be found in the
appendix on page 44.]
The Chairman. Jim, thank you very much for your statement
and we now turn to Deb Ryun.
STATEMENT OF DEB RYUN, EXECUTIVE DIRECTOR OF CONSERVATION
DISTRICTS OF IOWA
Ms. Ryun. Good morning. I will totally admit to having the
weakest voice on the panel, so if someone can't hear me, please
raise a hand and I'll try to speak up.
I do thank you for having this opportunity to comment on
the 2002 Farm bill. Conservation Districts of Iowa represents
Iowa's 500 Soil and Water District Commissioners, some of whom
are in the room today. Thank you for coming. Most are farmers
or have a farming background. They have a vested interest, many
have a life-long commitment in promoting wise land use and the
conservation of our soil and water.
While I might enjoy commenting on other aspects of the Farm
bill, I do feel compelled to focus on the conservation title.
Soil and water conservation must be a significant component
in both concept and funding in the next Farm bill and receive a
minimum of 25 percent of the funding.
The programs must be focused and provide direction to
achieve landscape and watershed objectives for water quality,
resource protection and the entire range of conservation
benefits.
Flexibility must be built into the conservation programs to
allow them to be tailored within the states. The role of State
Technical Committees needs to be strengthened.
We must meet public expectations for water quality,
resource conservation and environmental enhancement within a
framework that sustains family farms and ranches both
economically and socially.
Funding for research and education is critical. It's a
critical component of the Farm bill.
CDI strongly supports the concept of the proposed
Conservation Security Act. We applaud this voluntary and
comprehensive approach. Let's provide financial rewards to
agricultural producers who are following sound natural resource
conservation practices. Thank you, Ross.
In the agribusiness world value added is a means to
survival and the CSA may be an example of value added at its
best. It would foster the development and implementation of
whole-farm conservation plans. Producers would also receive
financial support at a time when agriculture is struggling to
survive. In addition, society as a whole would gain from
increased environmental protection.
Currently the USDA offers set-aside programs such as CRP
and WRP designed to help farmers be good land stewards.
However, set-aside programs only directly protect land that is
taken out of production. If we are to have an adequate impact
on quality of our environment, we need to target all working
lands and achieve a better balance between working lands and
conservation and set-aside land.
It's important to reward those who are already good land
stewards. Many producers have long farmed on the contour on
slopes. They've re-established wetlands on hydric soils and
pastured their highly erodible lands. They have set aside
timbers and protected rare prairie remnants. It makes no sense
to encourage producers to undo sound conservation practices in
order to be eligible for incentive payments. We should
compensate those who are voluntarily incurring personal cost to
establish and to maintain wise land use practices.
The current system provides financial assistance to a
select group of producers. The Farm bill should provide
incentive payments to producers of all types of products. It is
important and fair to provide financial incentives to those
farmers who have not traditionally benefited from this type of
support.
The next Farm bill should have elements which compliment
and not replace other conservation programs. It should ensure
maintenance of aging structures through programs like the small
watershed rehabilitation program and fund them at appropriate
levels. CDI supports continuing and expanding the current
programs administered through the USDA by NRCS.
General consensus among Iowa's conservation groups and the
commodity organizations is that participation in USDA programs
should require conservation compliance for direct government
payments. Provisions established in the 1985 HEL-Sodbuster and
Swampbuster provisions are important to protect land from
erosion. Noncompliance should result in a person being
ineligible for USDA benefits.
Rural Americans who make a comfortable living on working
lands can be considered a threatened, if not endangered,
species. An even more rare breed is those of us who work to
achieve more conservation on agricultural land. The House
Agriculture Committee Farm Bill proposal reflects very little,
if any, consultation with 3,000 soil and water district
commissioners throughout the country. They've been working in
this arena for over 60 years and we know what we're doing. We
ask you to listen to our small but important voice.
While CDI applauds the house proposal to increase EQIP
funding to $1.2 billion annually, we are very much opposed to
shifting the administration of this program to the Farm Service
Agency. Shifting EQIP or any of the programs which require
technical assistance appears to be part of the constant battle
of power at the national level. The biggest roadblocks for EQIP
to provide more conservation assistance are money for
contracts, technical assistance funds, and the inter-agency
concurrence requirements at the local level. The house version
limits funds available for technical assistance and does not
require the secretary to provide technical assistance.
Technical assistance is something the producers should
expect in a timely manner. Technical assistance has shrunk from
60 percent of the conservation budget to about 30 percent since
1985. The house proposal suggests that none of the funds for
programs such as CRP, WRP & EQIP could be used for technical
assistance. It severely limits Commodity Credit Corporation
technical assistance funding to implement Federal programs. It
overlooks the effective partnership delivery system already in
place. It does little to address the tremendous workload of
conservation assistance.
The focus of the next Farm bill conservation title should
be to reduce topsoil loss, improve soil health, improve air and
water quality and provide wildlife habitat while at the same
time provide assistance to financially struggling farmers. CDI
hopes that this objective prevails. Conservation of private
lands is important. I do thank you for this opportunity.
[The prepared statement of Ms. Ryun can be found in the
appendix on page 52.]
The Chairman. Deb Ryun, thank you very much for your
testimony. Now we'll turn to Mary Swalla Holmes, ISU extension.
STATEMENT OF MARY SWALLA HOLMES, ISU EXTENSION
Ms. Holmes. Yes. I'd also like to thank you for the
opportunity to provide testimony this morning.
Listening to my fellow speakers this morning reminds me
again that Iowans are really smart and we really know what's
happening out here in the Heartland.
I have traveled the state of Iowa for 5 years as a
community consultant working to develop sustainable
agricultural opportunities. I'm here today representing my
clients, family farmers who live on the land and grow fresh,
nutritious food for their neighbors and for the small towns
that welcome and support this new agriculture. I am also a
member of Governor Vilsack's Food Policy Council and Local Food
Systems Task Force and the Iowa Community Food Security
Liaison.
I believe that the new Farm bill must address the realities
of the emerging global economy. In the rapidly consolidating
and vertically integrating food and fiber chains trans-national
companies will soon own or directly contract for all raw
materials. Agricultural raw materials will be produced wherever
it is cheapest and where social and environmental costs can be
externalized. Current farm bill payments which directly
subsidize production of commodities ultimately subsidize these
mega-corporations. While profits accrue to the corporations,
environmental and social costs are billed to our small
communities.
Iowa's water quality is already among the worst in the
nation, our rivers and streams choked with soil, chemical
runoff and fecal contamination. Our rates of rural poverty are
high and in a land awash with corn and soybeans I continually
see the battle of hunger and food insecurity. Farmers feel
trapped, unable to break the dependency on farm payments that
are based on production of cheap commodities even though they
recognize how dysfunctional the system has become. They know
that the price of competing as low-cost producers in a global
system is to be locked into a downward spiral, forced to make
choices that destroy their land, their community and their
health.
One ray of hope in Iowa has been a grass-roots movement
toward developing local food systems. This movement is led by
the Practical Farmers of Iowa and INCA, the Iowa Network for
Community Agriculture. It connects farmers and consumers
through direct marketing enterprises. The growth of the number
and quality of farmer's markets and CSA's, Community Supported
Agriculture Subscription Farms, in Iowa is being driven by
consumers who are looking for a source of food they can trust.
These consumers are willing to pay more for the food that is
produced on a healthy, sustainable farm by a farmer they know
by name.
Widespread interest in local food systems was recently
shown by over 300 people who signed up and that attended
workshops held in five locations in Iowa. In fact, we turned
people away from every one of those workshops. We were able to
hold 60 people in each workshop and we turned away another 40.
When Practical Farmers of Iowa announced recently that they
would work with groups of producers to develop direct marketing
enterprises, over 30 groups applied. With limited resources,
they will be able to assist eight groups to develop marketing
strategies and business plans.
Working together with Iowa State Extension, the Leopold
Center for Sustainable Agriculture and USDA Rural Development
and NRCS outreach, small amounts of grant funds have been
leveraged to assist the growing number of interested farmers.
Additional support is needed to support farmers converting to
new enterprises. Technical assistance in this area is also very
needed.
Under the current Farm bill there is little to encourage or
support farmers who are converting to high-value, market-
oriented enterprises. In a recently completed survey of
specialty produce growers in Iowa, 56 percent had less than
twelve acres in production. With limited acres and no corn
base, often they are not even considered farmers under USDA
designation even though they often feed 20 to 60 households,
supply the local farmer's markets and provide social,
educational and environmental benefits to their communities. On
the other end of the scale, 25 percent have 75-1500 acres under
production, much of this in 7-year organic field crop rotation.
As you re-structure the Farm bill, I urge you to consider
these farmers and their communities. Direct payments that focus
on re-building our natural resource base and reward farmers for
conservation practices--uncoupled from commodity production--
will renew the countryside. I fully support the Conservation
Security Act as a beginning. Please consider the amount of
technical assistance that will be needed as cultural and
economic restructuring takes place. The ACRE proposal which
would support the development of cooperatives, networks and
associations of producers and technical assistance, addresses
this issue.
One important piece of the Farm bill that I'd also like to
talk a bit about is the designation and support of the
Community Foods Security Initiative which builds and
strengthens food systems at the community level. The Community
Food Projects Grants Program has provided incomes for farmers
while improving nutrition for citizens all over the country.
The Farm to School initiative in particular seeks to improve
access for local farmers to sell into local schools. In Iowa we
are working to create a pool of producers that would sell
ground meat products to Iowa schools. The Community Food
Security Initiative is the centerpiece of a strong, secure
America, weaving a tightly woven safety net of food access for
all citizens.
Thank you, Senator Harkin, for your work on this most
important and far-reaching committee. Please design a farm bill
that marks the turning point for America. We are ready to turn
away from cheap production that destroys our land and our
people and ready to turn toward a real future of abundance and
health. Thank you.
[The prepared statement of Ms. Holmes can be found in the
appendix on page 57.]
The Chairman. Thank you very much, Mary. Now we'll turn to
John Helbling, General Manager of Economic and Market
Development for Alliant Energy.
STATEMENT OF JOHN HELBLING, GENERAL MANAGER OF ECONOMIC MARKET
DEVELOPMENT, ALLIANT ENERGY
Mr. Helbling. Thank you, Mr. Chairman. I appreciate the
opportunity to talk about something that's extremely important
to our communities as well as Alliant Energy as a whole.
We serve 1.2 million customers in four Midwest states. The
minority of those are in urban environments. The majority of
them are rural communities such as this bill hopefully will
address.
I want to talk about two issues that impact rural economic
development of a whole broad spectrum. One is affordable
housing and the second is biomass energy opportunities. I
congratulate the Senator for his initiative on establishing an
energy title in the Senate Agricultural Bill because I feel
that this has been a long sector that the agricultural
community has ignored and not taken advantage of.
First, Mr. Chairman, I want to take the opportunity to
thank you for your leadership in this issue. Your assistance
enabled Iowa farmers to provide set-aside switchgrass to
Alliant Energy for the biomass-to-energy demonstration project
at the Ottumwa Generating Station which, as you know, is a part
of the Chariton Valley Biomass Project. Thanks to your
assistance that project continues to grow.
I want to talk first, briefly, about housing. Alliant
Energy's diversified holdings include Heartland Properties, a
company that invests in and helps create affordable housing in
communities served by Alliant Energy. Your support for the
Eagle Bluff Apartments in Fort Madison is greatly appreciated.
It is an example of the work Heartland undertakes along with
other community developers to meet the rural housing needs of
low income seniors. Eagle Bluff was made possible through the
U.S. Department of Agriculture's Section 515 Rental Housing
loan program which offers some flexibility to finance both new
construction and the rehabilitation of aging rental housing.
While construction costs and the need for quality
affordable housing continues to rise, the program has faced
congressional budget cuts over the past decade. Construction in
rural areas costs nearly as much as the urban ones, but
developers cannot charge anywhere near the same rent. The
marketplaces will not bear it. If rents are too high, seniors
and families are left with inadequate housing conditions or are
forced to leave rural communities to look elsewhere for more
affordable housing, either are significant blows to rural and
small town communities. The low interest loans available
through USDA are needed to keep rents affordable. Further, the
program combines well with other housing programs, such as the
Federal Low-Income Housing Tax Credit to reach very low income
households. We recommend, Mr. Chair, that the decline in the
Department of Agriculture Section 515 Rental Housing loan
program funding levels be halted and that appropriations be
maintained at the fiscal year 2001 level of $114.3 million to
adequately address low-income needs in rural areas.
The second issue I want to address is incentives for
resolving what I think is a win-win solution for both ag waste
management and agricultural energy needs. We represent and I
represent an energy company. That's a strength that we need to
focus on. Alliant Energy is committed to finding new and
applying new and innovative solutions to energy and other
problems today. I mentioned the Chariton Valley Biomass Project
which involves testing whether switchgrass can be co-fired with
coal to power a commercial generator to make electricity. We're
extending this same question to other forms of biomass,
exploring the practicality and profitability of converting
animal waste, crop residue and other forms of waste and
combinations of waste ultimately into electricity or other
forms of energy such as steam.
Presently, Alliant is working with the Iowa Department of
Natural Resources to install an anaerobic digester fueled
cogeneration facility at the Top Deck dairy farm in Westgate,
Iowa. Digesters like this convert cow and swine waste to
methane which is burned to generate electricity. Capturing the
methane prevents it from escaping into the atmosphere and
eliminates 90 percent of the odors from the waste. Runoff is
dramatically reduced. The farmer's electric needs are
supported, often entirely, while excess power is sold back into
the grid, another revenue stream for the agricultural
community. The waste from the digester can also be used as a
marketable fertilizer product that has 50 percent higher
quality than the unprocessed manure going into the digester.
Biomass energy production is one of the most exciting
applications of ag wastes if it works economically because of
the numerous environmental and agricultural problems it can
help farmers solve. Because this is an emerging technology it
does need some incentives in order to make it work financially
for the farmer. That is why Alliant Energy is supporting Senate
Bill 1219 sponsored by Senator Grassley expanding the Section
45 tax credit currently available for electricity produced from
wind, solar, poultry waste and certain closed loop biomass to
cover electricity produced from swine and bovine waste. We hope
this bill will be added to any Senate Energy legislation
considered later this year and also it could be considered the
basis for the energy title.
In addition, Alliant Energy supports SEC. 3102 of H.R. 4,
legislation passed recently by the House relating to further
expanding the eligibility of renewable open-loop biomass
eligible for the Section 45 tax credit. Alliant Energy is also
working with the Iowa DNR to set up a fast-track permitting
process for biomass-to-energy projects. In Nevada, Iowa, we are
working with the Iowa Energy Center on biomass conversion and
we are beginning to explore how swine manure in particular
might be complemented with other crop residues and ultimately
converted to energy.
It is important to remember that the technology we are
looking at and the waste might work best to produce gas or to
run a generator or to be co-fired with other fuels or to
produce steam unable to be fired at a higher temperature. Any
Federal support should be mindful that the technology and fuel
sources are still fluid at this point and language assisting
development should not accidentally cutoff what might end up
being fruitful avenues of economic, technological and biomass-
to-energy development.
Alliant Energy proposes that the Natural Resource
Conservation Service expand their eligibility for matching
loans for collection and retaining structures to include
structures intended to hold manure for digesters. This would be
under the Environmental Quality Incentive Program, EQIP, funded
under the Section 4 USDA Waste Storage Management Code. Alliant
Energy also supports any encouragement you can give to the
Offices in the Department of Agriculture such as Energy Policy
and New Uses and Agricultural Research and Technology Transfer
to direct more of their financial support for innovative
technology into early research and demonstration projects
involving biomass and biomass-to-energy applications. The
economic opportunities for the farm economy suggest that these
are fruitful areas to pursue. Farmers need economic incentives
to develop sound environmental practices that have both
societal and economic benefits.
One final word, Mr. Chair, on a program we conduct on the
state level which should be of interest to the committee.
Alliant Energy is offering a Demand Side Management utility
program to farmers directly and specifically. These are
incentives to farmers to acquire and to install energy-
efficient technologies at a much broader scale than had been
done in the state of Iowa before. For farmers who have not
sought energy efficiency in the past, the energy savings can
literally be enormous. We are confident that the farm community
will see significant savings in the years to come.
In conclusion, Alliant Energy is actively committed to
agricultural and rural economic development. In part, this
means making farms and farmers more competitive and more
efficient as businesses. In part, this means helping to make
and keep our rural communities a place to live and work and
grow in.
Thank you, Mr. Chair, for this opportunity to testify and I
look forward to answering any questions.
[The prepared statement of Mr. Helbling can be found in the
appendix on page 59.]
The Chairman. John, thank you very much. I congratulate you
and Alliant Energy for all of your forward thinking and getting
involved in the alternative energy projects that you mentioned.
I have some more questions about that. Let me just review, if I
might, to make sure I understand what everyone said.
We heard from Ross who said that basically with the WTO we
have to make sure we're in the amber box in our farm bill, and
that trade is about 50 percent of our crop income. Ross feels
that we should continue the AMTA payments--correct me if I'm
wrong--and that we should re-adjust loan rates but keep the
soybean loan rate at $5.26, and re-adjust loan rates for
historical averages. He wants a counter-cyclical support
program, expansion of the conservation reserve program, and
elimination of the limits on participation. He pointed out that
he could not participate. He has three families that he
supports and because of those limits he can't participate in
the program. He mentioned an environmental incentives program
they supported and an energy title they support. He supports
and wants to expand the scope of trade in farming.
Mr. Krier said that the current policy is not working.
We've had 30 percent decline in prices. He mentioned the
outdated bases that we have and proposed we raise the market
loan rate and index them to the cost of production. He said we
needed more renewable fuels, emphasis on that. Mr. Krier
suggested we have a farmer-owned reserve--I think he said
basically for ethanol or energy production. Mr. Krier says we
should enforce the payment limitations, also mentioned a
voluntary flex-fallow system was needed, mentioned in trade we
need country-of-origin labeling plus environmental and labor
regulations and said that in rural development we needed some
value added enterprises and financial help for those.
Deb Ryun mentioned that 25 percent, she believed, of the
funding in the Farm bill ought to go for conservation.
Flexibility should be built in to the program and research and
education is critical. She liked the Conservation Security Act
as a centerpiece of the new bill, mentioned that incentive
payments should go to all types of farmers and not just a few
and that it should compliment and not replace the existing
programs. She also said that we should support the continuation
and strengthening of the present programs and that conservation
compliance is needed. Ms. Ryun opposed shifting the EQIP
program to the Farm Service Agency and mentioned that the House
bill provides less than 10 percent of the funds to producers on
working lands. Maybe we'll cover that in a little bit.
Mary Holmes said that basically the environmental costs and
the social costs are billed to the rural communities and
they're the ones that pay it, indicating we need that
development of local food systems. She mentioned INCA in Iowa
and the workshops that they have around Iowa were well
attended, that there's little or no support in the present farm
bill for changing practice if farmers want to change their
practice. She also supported the Conservation Security Act and
mentioned that the Community Foods Security Initiative that's
in the present Farm bill needs to be extended.
John Helbling mentioned both affordable housing and energy.
On housing he mentioned the 515 rental program that we've had
for a long time under Farmer's Home, now Rural Development. He
mentioned the Eagle Bluff project that I'm familiar with in
Fort Madison. He said that many elderly are being priced out of
rental markets in our small towns and communities and mentioned
that we needed to maintain a $114.3 million for section 515. He
also said we need to extend the biomass to other items like
animal digestives for direction of methane, also support Senate
bill 1219 produced by my colleague, Senator Grassley and to
expand Section 45 to cover methane. Now, he mentioned both open
and closed loop biomass systems need to be supported, and
because technology is very fluid at this point, we have to be
very careful of what we do. He mentioned expanding the
conservation program to build storage for manure for
digesters--I think that's what you said. That's what I wrote
down anyway, and mentioned at the end that Alliant Energy is
providing incentives to farmers to apply energy saving
technologies. I don't know exactly what all those are, but
maybe we'll get into that.
Mr. Helbling. I can provide those to you in detail, sir.
The Chairman. Thank you all so much for your testimony. I
have some questions for the panel and then we'll open it up for
the audience.
Let me just say at the outset how proud and privileged I
feel to be the Chairman of the Senate Agriculture Committee.
I'm the first Iowan to chair it since 1910. I feel very proud
to have this opportunity and responsibility which I take very
seriously. I've been on the Senate Agriculture Committee now
for 17 years and 10 before that in the House. I've had 27
years. I legislated a lot of farm bills. I have some real
questions about what's happened over those years and the
directions that we've taken. I say to those of you who perhaps
think we need to change direction of the Farm bill--which I do
also--that essentially we've been going down this road for a
long time. It's pretty hard to turn everything on a dime. We
may have to think about how long it's going to take to turn
this thing and get it moving in a different direction. I just
want to lay that out there. I don't know that everything will
be changed all at once, but certainly some changes do need to
be made.
When I first took over chairmanship of the Agriculture
Committee I asked this question. I have asked this at every
hearing: Should Federal farm programs continue to support every
bushel, bale and pound that is produced and earned? I just ask
that question. If the answer is yes, I would like to have the
justification for it. If no, then I'd like to know what should
replace it and where should we go? That is just an essential
question that we have to ask. The next question is do we take
into account all of the consequences of an action that we take?
We say, we're going to do this and we know how it's going to
effect one element. How does it effect other elements? How do
we take those into account? Those are really the few
fundamental questions we have to ask.
First of all, let me thank all of you for the strong
expression of support you made for conservation. That is going
to have to be an essential part of the new Farm bill.
Mr. Paustian, you say that you support continuing fixed
AMTA fixed contract payments. I have some question about
continuing those into the future. Since these payments are
fixed and then they're written into the bill so we know what
they are every year, do they not, then, become reflected in
rental rates and land prices every year? Do we not create some
kind of a bubble and it's reflected into increasing land prices
above what the value of the commodity is that can be produced?
If you have that same payment that everyone knows what they're
going to get every year regardless of what the price, does that
not get reflected in that price?
Mr. Paustian. Yes. Possibly it does. It does provide a way
for farmers who plan in that year as far as crop inputs and can
plan a little bit ahead of that. When he has to go to his
lender he can tell them what the projected income is and what
his expenses are going to be.
The Chairman. That's a question for everyone here and for
you on the panel. It seems like our farm programs over the last
20 years or 30--I don't have a definite cutoff here--the last
20 or 30 years basically have had the unintended effect of not
only increasing farm size but increasing land prices above
really what the value of that commodity compares. We have what
I call a bubble out there. It's been built-in. In other words,
I ask this question. If you have a system that pays for every
bushel and bale and pound that's produced--and since I'm not in
the south I can use just bushels here in this audience--does it
not mean that the bigger you are the more you get. That means
you can bid up the price of land more than what your neighbor
is farming and get it up and then next year you're going to get
that too so you keep bidding it up? I ask that question because
it seems like that's what's happening.
Mr. Paustian. Yes. It appears that way. The larger farmer
gets a bigger payment but that's over more acres too. When you
look at it on a per acre basis I don't see that much
difference.
The Chairman. Well, that comes back to my question again.
Is that good policy for us to do that? I don't care if a farmer
wants to get big. If you can get big, God bless you. That's
what the market's all about. Should the government and the
programs sympathize and be making the payments that actually
encourage and promote that? If a farmer can be more efficient
and more productive, work harder, save money and increase their
capacity, that's fine. I have no problems with that. I just ask
the question about whether or not the government should be
involved.
Mr. Krier, you mentioned the cost of production and raising
the marketing loan rate and indexing the cost of production.
Well, I've wrestled with this a long time, but--It's very
attractive. However, there's a wide variation in the cost of
production for any given commodity, even for corn. It varies
from farm to farm, region to region. If you're on the outskirts
of Cedar Rapids it might be one thing and if you're in southern
Iowa it might be quite another. How do you figure what it is
because it various so much?
Mr. Krier. That's difficult, I guess, because we're dealing
with farmers all the way across the nation.
The problem with the Farm bill is you're going to have a
fixed bill for 10 years and the cost of production is going to
be changing every year.
The Chairman. If we reduce that on an average then to some
farmers you're giving too much and for some you're giving them
too little. That's the tough thing. Now, there does seem to be
a difference here. I want to cover the size of livestock
operations. Right now under the CAFO rules, Concentrated Animal
Feeding Operation, if you have the equivalency of 1,000 head or
more you are not eligible for the manure management program.
There have been suggestions that that will be raised. There
have been suggestions that we ought to just make it a money
cut, up to a maximum amount of so much money regardless of your
size. We have basically three things: Either keep the limits
that we have now, raise the limits above 1,000 to some other
level wherever it might be, or three, the maximum amount of
money you could get we don't care how big you are. What do you
say on that?
Ross, you seem to think that the limit ought to be raised.
Jim, you seem to think that the limit ought to be kept down.
Mr. Krier. The limit needs to be set and kept there instead
of coming in a year or two later and putting the pressure on
and then upping the payment limits the way we have. We had the
limits set, supposed to receive ample payments, maximum
payments and these payments keep getting bumped. They need to
set them.
The Chairman. I'm just talking about the limits on EQIP for
conservation.
Mr. Krier. It would be the same thing because if you keep
rolling the limits higher that allows the larger productions to
keep getting money.
The Chairman. Ross, what do you say?
Mr. Paustian. The limits should be raised.
The Chairman. Do you have any idea how high?
Mr. Paustian. I can't say that right now. That's kind of
tough. Definitely above 1,000
The Chairman. Well, this is something maybe somebody else
has got some views on in the audience. The point is that under
the Clean Water Act the minimum was set and it was assumed that
anyone who had over the equivalency of 1,000 units should be
able to take care of their own manure management. They had to
be subject to the regulations. It was over 1,000 subject to the
regulations and therefore they had to pay for it themselves.
Under 1,000, not subject to the regulations. We recognized in
the Farm bill that this also contributed to environmental
pollution so we wanted to support and encourage the smaller
units to have a good sound manure management program so we
provided EQIP money to them. That's where this is. If, in fact,
we're going to open it up to above 1,000 we're going to have to
put a lot more money into it. If we don't, then the bigger
operations will get more money. They'll require a lot of the
money and there will not be enough money left for the smaller
operations. That's the dilemma that we're on right now on this
thing.
Ross, you mentioned rebalancing loan rates. You said keep
soybeans at $5.26. That means we've got to raise the others. Do
you have any thoughts on how high do we do it and if we do
raise those loan rates in accordance would that just promote
and encourage more production, more planting and thus more AMTA
payments? Do you see what I'm saying? If you have a higher loan
rate doesn't that just promote more planting?
Mr. Paustian. Yes. The idea behind announcing that was that
it appears that especially this year we're getting more soybean
planting because of the imbalances between corn--in this area--
corn and soybeans. That's why it balances out. This year as far
as more acres being planted there's only a certain number of
acres in the state and if more acres of corn are being planted
that's less acres of beans. I don't see that as being a real
big problem. The total number of acre farms is going to be the
same.
The Chairman. Might be some shifting in there?
Mr. Paustian. Yes. Just shifting.
The Chairman. OK. Mary Holmes, you mentioned some things
that I'm quite interested in in terms of developing local food
systems and things like that. It is ironic that in a rich
agricultural state like Iowa we import almost all of our food.
That doesn't make sense, but then again how feasible is it,
really, to think that we're going to change the system that we
have in Iowa to get more local grown produce or whatever? I
assume there's a certain amount of that we can do, but isn't
that just a small part of our economic structure?
Ms. Holmes. It is small, but it's growing very rapidly.
Five years ago we had about six CSA's in the state. Today we
have 60. I have communities calling me every week saying how do
I reach out to farmers? How do I develop some of this in my
community? I believe consumers more and more are concerned with
the safety and the health of their food and they also are
concerned with having farmers in their area. As we see the
incorporation of the larger and larger farms we don't have
those people in our school systems, we just have less people to
go around in the communities. Communities are looking at it as
a way to do both community development and economic structure.
The Chairman. One thing you mentioned was that a lot of
farmers don't even benefit from farm programs.
Ms. Holmes. Absolutely. Right.
The Chairman. What about farmers that have a long history
of hay and stuff like that? They might not have a good base and
so they don't----
Ms. Holmes. Right. They don't have a corn and soybean base.
If they don't have that then they don't qualify.
The Chairman. We have a lot of people that have questions.
John, again, I want to congratulate you. The biomass project
that you've done in Chariton County is a great incentive you're
providing out there. The fact that you're now looking at how to
move into other areas like methane production, this is the kind
of partnership that we're going to have to have Federal, state,
local, private sector. You mentioned about the digesters and
we're going to look at this and we're going to have an energy
title, as I said, in the Farm bill. Do you have to have a huge
operation for this to work? Can you scale this down?
Mr. Helbling. Right now we're looking at dairy operations
with 500 head of cattle and up. With hog confinement we're
talking about 1,000, but technology is allowing us to bring it
down. It is a matter of economics right now. Capital costs are
quite high for some of these. It may get to the point where
some producers--because of their neighbors or whatever--may not
be able to get a permit to do the manure management the way
they are. We think that the digester is growing. USDA has
indicated it can help us bring that level of production down
and make it accessible to lower and smaller levels of
production. It takes right now about 750 head in order to make
this thing close the cash-flowing out.
The Chairman. Let me ask you a provocative question. If you
move ahead--Technology is good. If there's a market out there
you might find new technologies that could be applicable to
smaller----
Mr. Helbling. That is correct.
The Chairman. I'd like to say this to all of you out there.
The House of Representatives 2 weeks ago passed an energy bill.
Most of the press was on the fact that there was a lot of
drilling in the arctic national wildlife area. What they didn't
mention is it provides up to $33 in tax credits, tax benefits
for oil, gas and coal over the next 10 years. I mean, to my way
of thinking that's 19th, 20th Century technologies. When I look
out over a field out here I don't just see food, I see a lot of
renewable fuel out there too. I just keep thinking that if we
just had one-third of those tax breaks--What if we had $10
billion that we could put out so that your consortiums and
things could get together and build these tax write-offs and
tax credits that they're going to try to give for drilling off
the coast or something like that? Would that make an impact?
Mr. Helbling. Not even talking about the closed-loop
production, if you look at the waste recovery which is why
we're focusing on methane right now which is a waste product,
which is an environmental issue. If we harness all the methane
that's being produced right now as a waste product and
converted it to energy we could substantially meet all of
Iowa's energy requirements. Right now most of that is not
financially or economically feasible. There is enough methane--
there's enough energy there to provide it, but we can't afford
that energy right now. We do need assistance and that's why
we're asking for the Section 45 tax credits to be extended from
closed-loops to open-loops to allow us to take advantage of not
only the manure but other residual crop residues that also are
generating methane and use that for renewable fuel.
The Chairman. There's an ethanol plant I know of in Kansas
that's using all of their heat source for the making of ethanol
from methane from I think both landfill and from feeding
operations.
Mr. Helbling. We are currently working with five----
The Chairman. This is the last one for the panel. Just one
question before I open this up. What is a closed-loop and an
open-loop?
Mr. Helbling. The closed-loop under the tax code right now.
Closed-loop is an agricultural product that is grown
specifically for the generation of energy. Switchgrass in this
case would be considered a closed-loop biomass source as
opposed to open-loop which is--We look at it as the waste
streams of other agriculture production. It was not grown for
the specific purpose of generating energy and that is a tax
code issue more than a science or a technology issue.
The Chairman. I understand. Thank you all very much. I'm
going to have to ask that you give your name as clear as you
can for the reporter and I am going to have to ask you to limit
your comments to a minute to give everyone a chance. I'll just
go back and forth.
AUDIENCE PARTICIPANTS
Mr. Wilson. My name is Brad Wilson. We've had some great
discussion here and I'd just like to focus on clarity, that we
be clear about things. It's so confusing sometimes, this farm
policy. First, keep in mind what are the core issues. I find
that as issues that have the power to destroy family farms and
dole out subsidies to corporate welfare activists or on the
other hand to really help farmers. Of course, we have the
fringe issues and we have had some excellent discussion up here
with some good definitions. I'm going to speak for the other
side and talk about the other definitions that are used by
politicians coming out of Washington on some of these things.
One general point is a statement that we can't go back to the
field programs of the past. What that means is we can't update
successful commodity programs from the past. Instead, we only
go back to corporate welfare and Hooverism. Another term that
we heard----
The Chairman. I'm going to have to ask you to sum up. If
there's room at the end you can go around a second time.
Mr. Wilson. There's still happy days I'd like to add. A
hearing is a place where you call the office of the senator and
you're told you'll have 3 minutes. If you actually show up
you'd find that after an hour and a half three-fourths of the
time the people back here will have less and less time to
speak.
The Chairman. Yes, sir.
Mr. Heithoff. Good morning. My name is Jerry Heithoff. I'm
a farmer from Nebraska and I raise corn, soybeans, hogs and
cattle. Mr. Chairman, first of all I'd like to congratulate you
on your new position and thank you for letting me voice my
opinion. I won't be able to read everything I have here, but
I'll try to sum it up quickly.
The Chairman. If you have statements, I'll put them in the
record.
Mr. Heithoff. The current system of decoupled welfare type
payments is not a substitute for a fair price in a competitive
marketplace. If you ask for a show of hands in any room full of
farmers whether they want decoupled welfare type payments or a
fair price in a competitive marketplace, the fair price in a
competitive marketplace wins every time, yet many of the
politicians and commodity organizations that are supposed to be
representing us farmers continue to tinker with a farm bill
that most farmers are fundamentally opposed to.
Senator Harkin, I think you agree with me and most farmers
that ag markets are a long way from either fair or competitive.
The 1996 Farm bill makes an already bad situation worse. Thanks
to the 1996 Farm bill the marketplace value of my corn and
soybeans has collapsed.
Some ag producers do not fully understand that until
farmgate prices exceed the marketing loan rates their incomes
will not actually go up. As long as the cash market is below
the marketing loan rates, they are either getting more income
from the market and less in LDP's or less from the market and
more in LDP's. Either way, their total income is about the same
and well below their cost of production. This is why a new farm
bill must force the grain traders to pay us a fair price for
what we produce in the first place.
Why should I sell my products for less than my cost of
production? In order to get higher prices for what I produce, I
want the marketing loan rates to be set at a minimum of 100
percent of my full cost of production.
Our current trade policy is a dismal failure. In 1996 our
ag balance of trade was $27 billion. Last year it was down to
$12 million. The only Farm bill proposal that I have seen that
would maintain planting flexibility while also forcing the
grain trade to pay farmers a fair price for what they produce
and staying within the budget guidelines is the American Corn
Growers Association and the Nebraska Farmers Union farm bill
proposal. I hope you give that approach serious consideration.
Thank you for your time.
[The prepared statement of Mr. Heithoff can be found in the
appendix page 64.]
The Chairman. I do have all the proposals from all the farm
groups. My staff has been going through them on a continual
basis.
Mr. Specht. John Specht, a student at Mar-Mac High School.
Specht, S-p-e-c-h-t.
If, through the opposed free trade agreement of the
Americas, every nation in the western hemisphere besides Cuba
will be able to freely exchange goods including commodities,
what's to stop countries like Argentina and Brazil from
completely dominating the beef, corn and soybean markets in
other countries of North and South America?
How can this and other free trade agreements be beneficial
to the farmers of Iowa and the rest of America besides those
which are owned by corporations which also control ag
production in Argentina and Brazil?
The fact that these free trade agreements are spawned by ag
giants as being beneficial to small farmers only proves the
fact of their total dominance of the current system which
rewards increased production when as anybody who knows anything
about economics knows the greater the supply the lower the
demand and lower prices. Thank you.
Mr. Lamb. Senator, first I'd like to thank and commend you
for coming out to the very heart of the heartland and giving
these good people an opportunity to express their thoughts and
concerns on a public policy that effects every person in this
country in some way, shape or form. My name is Gary Lamb. On
October 7th of this year it will mark 49 years since my father
lost his life in a farming accident and I took over the family
farm. In that half a century I've seen it all, Senator. I've
seen every sight you can imagine. I've seen high prices and low
prices and good production years and bad production years and
floods and droughts, but I can honestly say I've never
experienced in a half a century anything like I've seen in the
last 3 years when all of our major commodities are at 20, 25-
year record low prices. To give you some measurement, in terms
of real dollars even with inflation the market price of a
bushel of grain the last few years would buy less goods and
services than the market price of a bushel of grain did for my
father and grandfather in the Great Depression of the 1930's.
I also have served in the last 8 years as chairman of the
Farm Service Agency State Committee. As you well know the 1996
Farm bill was based on the principle that we would have
transition payments for 7 years and then we'd phaseout all
income protections and price supports. As you well know we have
had appropriation aid packages in the last 4 years. To give you
some measurement of that in my home county alone, Tama County,
we pumped out $30,528,000 to 1272 farmers. If you average that
out that's an average of $24,000 per farmer in Tama County.
Now, if anyone in this room or this nation thinks if you remove
that $24,000 from each Tama county farmer and you remove that
$30 million from Tama County and you remove nearly $5 million
from the Iowa economy--If you for 1 minute think we wouldn't be
looking at a gigantic economic trainwreck of great proportion
out here then you don't understand agriculture and what it's
all about.
I would like to remind us all here today of the thoughts
and the words of the last U.S. Secretary of Agriculture from
the State of Iowa, the great visionary and innovative ag
leader, Henry Wallace. When they first implemented Roosevelt's
farm program his response was rather simple: I've never met a
farmer yet that didn't want to get his price from the
marketplace.
If we truly understand the inherent weaknesses and
vulnerabilities of production in agriculture and what makes it
uniquely different from any other industry, then we would
understand the need to have in place the checks and the
balances and the mechanisms that will encourage or at times
force the marketplace to give the farmers a decent price. What
other entity other than government can do that? Those words,
Senator, are probably even more true today than they were 60
years ago because of the lack of enforcement of antitrust trust
laws, with the rapid mergers--[Applause].
As much as we would want it that way, as much as we would
wish it that way, it's virtually impossible to think about a
fair competitive marketplace giving us a decent price.
I may be able to best express my thoughts, Senator, by
telling you about a dream I had recently. I dreamt that the
small rural community of Chelsea was alive and vibrant again
much like it was when I graduated from high school in 1955. I
dreamt that the three grocery stores and the three implement
dealers and the three feed stores and the two elevators and the
two drug stores and the hardware store and the lumbar yard were
all open again, vibrant.
We established that understanding that we needed those
businesses in that small community to provide our needs on the
farm and those businesses needed us out on the farm to keep
them in business. I dreamt that on a summer night you could go
into Wednesday night band concert night and you'd see literally
hundreds of people visiting and buying groceries and listening
to the music. I dreamt that on a cold winter night you could go
into the local high school gym and watch the local high school
team play teams from other communities. I dreamt that if you
drove through the streets of Chelsea on a warm summer evening
you'd once again see retired farmers sitting on the porches in
the summer twilight watching their grandchildren play while
their parents shopped and visited downtown. I dreamt that I saw
a couple of kids on the back of a pony on a lane of a farm
going nowhere and going everywhere. They were beginning to
learn and understand the wonders and the values of rural
America.
You see, then I woke up and I realized that that was but a
dream because all of those things I speak of gradually
disappeared through the years. The only question that remains
unanswered is can we save those small rural communities that
still exist out there?
If you remember, Senator, you had a hearing much like this
in Ames, Iowa in 1984 or 1985. One of the people who testified
was a reknowned economist. You asked him the question about all
the farmers that were being forced into bankruptcy and
foreclosure and how they were going to effect our communities.
His answer was that these small rural communities contribute no
economic value to our nation whatsoever. That may be, Senator,
but to us they're the most important place in the world because
to us they're home. This is where we were born, this is where
we were raised, this is where we put our roots down, this is
where our parents and grandparents are buried and this is where
1 day we too will rest. I want to commend and thank you for
your efforts to try to preserve those places across the rural
roads of this country that are still important to all of us.
The Chairman. Thank you very much. That's a little bit long
there because he speaks poetry. He has a wonderful way of
expressing himself.
Mr. Gray. Walter Gray, Delaware County, Manchester, Iowa.
Senator Harkin, I think the state of Iowa is very fortunate to
have you in a powerful position, Chairman of the Senate Ag
Committee and the other committees you are on. I really am
impressed today with this young man that spoke earlier. I guess
what we're here today about is to make sure that that young man
has a place in agriculture. To do this I think this new farm
program has to look at price supports to a realistic level per
producer. Crunch the numbers and see whether that's 500 acres,
800 acres or 1,000 acres that will be supported, not only corn
and soybeans in this base but also grass and hay. After you do
this, then let's see what the economists say. If bigger is more
efficient, support bushels up to this acre level and after that
turn them loose on the global market and let the bigger
produce.
We also have to have country of origin labeling. Now,
people do want to know where their products are coming from. As
you look at the trade deficit that we have as a nation--and I
believe I'm correct that it will exceed $30 billion a month--
how long can a great country stand this?
We need a competition title in this bill. Earlier you
mentioned that you supported the competition title in this
bill. I'd like to see some hearings on that and that title
included.
Earlier this year a free democratic process was taken away
from all swine producers. A free, fair democratic vote was
overturned by compromise. This is not what this great country
was built on. This injustice must be corrected and not
repeated.
Complacency and compromise have lead to the ruination of a
lot of great societies. This Farm bill needs to include parts
that brings back our free markets, our competition and breaks
up the mergers that ruined our agriculture. Thank you.
The Chairman. Thank you very much. We are working on
including a competition title into the Farm bill. I just want
you to understand, though, that we have some jurisdictional
problems here. Antitrust and things like that fall under the
judiciary committee jurisdiction. Having said that, we're still
looking at how we might work around that and do some things
that fall within our jurisdiction to be able to address that.
When it comes to antitrust we just don't have jurisdiction.
There may be some other things we can do. I invite any of you
that have some ideas and suggestions to let us know.
Mr. Ginter. Thank you, Senator Harkin. It's an honor to be
here. It's also an honor to followup behind Gary Lamb, one of
the great orators of family farm life production.
My name is Larry Ginter and I'm a member of Iowa Citizens
for Community Improvement. I'm from Rhodes, Iowa and I've lived
on the same farm for 62 years except for a 2-year stint in the
military. I've been involved in this political and social fight
to preserve family farms since 1961. During this timeframe I've
seen farm policy go from bad to worse.
Since 1952 trillions of dollars have been robbed from rural
America because the New Deal legislation that matched the
support price to the yearly inflation of farm input costs was
scuttled. It is safe to say the farm programs over the past 40
years have driven farmers off their land and concentrated food
production into fewer and fewer hands.
Since 1952 there's been a great tug of war between those
who favor raising the support prices each year to match
inflation on farm inputs and a grain cartel that wants to
monopolize and control the market. Sadly, each year the
monopolizers like Cargill and ADM buy more political influence
and curry more favor from our elected officials and each year
more farmers leave the land and the marketplace becomes less
democratic and competitive.
With that said, Grass-roots groups like Iowa CCI, Missouri
Rural Crisis Center, the Western Organizational Resource
Councils and 30 other groups that are part of the National
Family Farm Coalition have come together and agreed upon a new
farm policy called the Food From Family Farms Act.
We propose that Congress raise the current loan rate to
reflect true costs of production which would stop the need for
farm subsidies and use a non-recourse loan--not a marketing
loan--to set a reasonable floor under grain prices. We need a
fair price, plain and simple.
Congress should establish a farmer-owned grain reserve to
ensure food security in times of scarcity and price stability
in times of plenty, maintain flexible planting options and
establish conservation measures that help protect the water and
land and help avoid overproduction.
We demand that all branches of the Federal Government
enforce antitrust laws and stop waltzing with the agribusiness
giants who are trying to control food production. Our trade
policy is a sham because it's designed to enrich the pockets of
corporate agriculture and not family farmers. Trade policies
should reflect the needs of farmers, laborers and consumers and
every nation must maintain its right to develop its own
domestic food policy and protect its environment. Under the
policies of NAFTA and GATT, coupled with the help of an
unelected and undemocratic World Trade Organization, that right
has been eroded worldwide.
Finally, with regard to the mandatory pork, we need to end
it now. Last fall, over 30,000 American hog producers voted
down the pork tax by a clear 53 percent to 40 percent margin in
a democratic and legally binding referendum. In Iowa we voted
down the pork tax 60 percent to 40 percent. Despite this, Ag
Secretary Veneman cut a back-room deal with the National Pork
Producers Council and now she's trying to flush our vote down
the drain. Thousands of people are outraged because Veneman and
the Bush administration have declared war on one of the most
basic principles that this country was founded on; the right to
vote and the right for our votes to count.
CCI and other member groups of the Campaign for Family
Farms are fighting Veneman's decision in the countryside and in
court. We need you, Senator Harkin, to stand with us and demand
that Veneman honor our vote and end the pork tax now. Anything
less is a blow against democracy and fairness in our land.
I worked 6 hours to try to get this thing put together and
they told me I had 3 minutes. That's exactly 3 minutes. This is
a farm hearing and this is about democracy and justice of
family farmers, Senator, and it's time that senators in all of
the states understand what this battle is all about. It's not
about complacency and it's not about kissing up to the big
agriculture giants.
[The prepared statements of Mr. Ginter can be found in the
appendix on page 74.]
The Chairman. You said more in that 30 seconds than you did
in the 3-minutes before that. If you've got a written statement
I'll put it in the record. I'd rather hear from your heart what
you got to say if you have any personal kinds of insights or
something like that.
Mr. Demmer. My name is Wayne Demmer. I'm a livestock and
grain producer from Dubuque County. I guess I'm here today to
ask you to support the small family farms in this country. The
first place is farm bills should start by capping the amount of
money that goes out. I have several counties here that the Des
Moines Register posted with the top 10 farmers of each county.
I'll present them to you today. This is why my sons who want to
farm can't compete against farmers that are getting a half a
million dollars, $1 million from the government. We have to be
able to farm the farm. We've got to remember if dad makes a
profit his sons will farm too. What has happened today is we're
going to lose our next segment of agriculture because our
family, our sons can't farm. They see dad and everyone else
trying to survive. I guess what I'm trying to say here today is
if we keep family farms, the cities and towns of Iowa will
prosper, not be left vacant.
We've got to remember the House bill has already summarized
they want to raise the checkoff limits. They say that the big-
size farms are much more efficient than the small ones. We need
cap. We've got to get it back. We need government grain
reserves so we can put a bottom on the cost of production
floor. Let the big grain purchase our product for at least what
it costs us to produce it.
We have a lot of alternatives out here. You talk about
conservation and I agree with you 100 percent, but we have one
farming program promoting beans in the hills of Iowa and we
have another program that says we have to have a CRP to stop
the erosion. We're competing against each other.
You have to remember that I raise hay, I raise oats, I
raise grain and I raise beans. I'm doing a conservation
program. I have fields that are 2, 3, and 4 years seeded out.
You should benefit the people that are already conserving the
soil, not the people that are abusing it.
In closing, as the two gentlemen before, I've been very
active in the pork checkoff. It's time--60 percent of the
producers in Iowa voted to end it. We voted it in, we voted it
out. It's time for you to stand up and support the pork
producers of Iowa and support democracy and our right to vote
for it to the court.
[The prepared statment of Mr. Demmer can be found in the
appendix on page 78.]
Mr. Stevenson. Hello, Senator Harkin. I'm Rod Stevenson and
I farm 820 organic acres in southern Iowa.
The Chairman. What county are you from?
Mr. Stevenson. Davis County. First of all, I'd like to say
that this talk of lowering the value of land to make our
commodities more competitive worldwide scares me to death. I
don't make any money on my farm now and all I've gained over my
lifetime is tied up in the value of that land.
What I really came here to talk about is value added
agriculture. I don't want to take anything away from Mary
Swalla-Holmes because, frankly, her agency has given us more
support than anyone else we've gone to. Thank you, Mary. To add
to what she has to say we need to focus on value added
agriculture that serves our more conventional Iowa farm in
addition to the small market gardeners. We can't all raise
vegetables for each other. I personally am involved in three
different value added agricultural efforts and anything you can
do in our farm bills to enhance that and provide us technical
support and the kind of expertise we need to run these as value
added co-ops, that will give a big boost to us as farmers and
serve all of rural America. We don't have MBA's here and the
kind of skills that are required to run these sophisticated
businesses on a competitive level. I have a statement----
The Chairman. Let me ask a question. You say you
organically farm?
Mr. Stevenson. Yes.
The Chairman. What do you raise?
Mr. Stevenson. My cash crop is tofu soybeans.
The Chairman. You raise soybeans of a particular----
Mr. Stevenson. Several varieties.
The Chairman. Do you have to clean them and all----
Mr. Stevenson. Right. They have to be bagged and cleaned.
The Chairman. Where do you market them?
Mr. Stevenson. Mine goes to the Heartland Organic Marketing
Co-op and goes to Japan. The domestic market is developing in
soy milk as well.
The Chairman. Do you raise anything else organic or just
beans?
Mr. Stevenson. I haven't had any success with my rotation.
That's one of the reasons I'm so dependent on farm programs.
For instance, this year I didn't get any corn planted because
of the wet spring. I have neighbors who never got any crops
planted. My wheat that I had the corn and wheat both
contracted. My wheat got taken by the weeds because it rained
through the harvest period. I'm still hoping to get some of
that. My beans were planted a month later than I normally
plant. It's a tough year for me.
The Chairman. Do we have anyone here who is a member of the
Practical Farmers of Iowa? When I was in Washington in July we
had Maria Rosen--Ron and Maria Rosen farm out in Shelby County.
It was interesting because we had all the witnesses lined up
there, we had the different farm groups and everything and
Maria was the last witness. She pointed out that her and her
husband farm 600 acres, they do not have any off-farm jobs,
both of their sons work in the summertime, they had one full-
time hired man year-round on 600 acres and they're making it.
About 12 or 13 years ago they shipped it to all organic. They
raise those beans too and they raise organic barley, organic
hogs, they raise organic chickens. Her biggest complaint was
that in the slow transition period they had practically no help
at all from all of the arms of the Federal Government to the
extension service to Iowa State in terms of research and
technical support. She said we need more emphasis in a new farm
bill about this. You just said that. Maybe this isn't for
everybody, but to the extent that some people want to do that
there at least ought to be the technical assistance, support
and research and incentives that enable them to do so.
Mr. Stevenson. I agree. Thanks.
[The prepared statement of Mr. Stevenson can be found in
the appendix on page 77.]
Mr. Thicke. My name is Francis Thicke, T-h-i-c-k-e, from
Jefferson County.
Senator Harkin, I'd like to address three of the questions
you asked. You asked if we should support every bushel. I say
we should not support every bushel. We need to get out of
denial. What we're doing to the farmers is a transfer
mechanism, transferring money from the government to the large
corporations. The more we support every bushel the more we
support that. This gentleman had an alternative. There are
alternatives to that. Of course, the Conservation Security Act
is I think the ultimate alternative. We need to decouple. Let's
face it. Let's not be in denial. Let's not try to continue in a
process that's going to take us down to handing over
agriculture to the corporations.
You ask, Senator Harkin, do we need to take into account
all the consequences of our actions? I say we do not. We also
work with the WTO. Publicly we do. What we're doing I think
here is handing over world agriculture to the corporations
again. In Iowa we think by providing the people with corn we're
going to support the hungry in the third-world countries. We
are not. The world trade organization is actually going to
destroy the agriculture in these countries as well as in our
country. We need to wake up and stop that now.
The last thing you asked is if we should limit the payments
for CAFO for the manure treatments. Yes, we need to limit it
because otherwise we're going to perpetuate this.
The Chairman. In response to somebody who just spoke a bit
ago, Mark just handed me this note. I'm not saying that you've
got to lower land values. That's not my point. My point is to
ask the question if the system of the farm program payments we
have now simply go through the fingers of the producer in the
higher rents, higher land values, all that stuff, go right
through their hands for equipment purchases and things like
that, have we promoted a bubble where land prices are here and
the value down here? You bring the value of the commodity up to
match what the value of the land is. That's my point.
Mr. Jepson. Hello. My name is Mike Jepson, J-e-p-s-o-n,
from Seattle, Washington. I'm here visiting my grandparents. I
have a question. What scares me from what I've observed and
being very ignorant on agriculture and just knowing my family
and seeing my grandfather being sharecropped in the 40's and
50's, is that the farmers aren't getting support. As a consumer
working in the school district where it's a Federal lunch
program I read on the carton of orange juice that it is from
China and Brazil. Another example would be in the grocery
stores out there. When I see meat imported from Canada I put it
down. By putting it in the other packaging I don't know if it's
domestic or imported meat. The question I would say is I hope
that the labelling would be better and that they'd get out
their message. I'm afraid it's all going to be corporate bail-
outs and there's nobody representing the small farmer. A good
example of that would be people who--I keep hearing the word
export but the problem is nobody's addressing the word import
in the domestic market that you already have. We're going to
get slaughtered because there's nobody watching us. Thank you.
The Chairman. Thank you very much.
Mr. Bierschenk. Thank you, Mr. Harkin. I want to thank you
for two things. I want to thank you for going after those extra
market assistance payments. That was great for farmers here in
Iowa. I'm sorry that you didn't get what you asked for. At
least you asked.
Second, I'm very proud to have you as my senator because
you're at least willing to speak at these ag committee hearings
where a lot of times in the past especially in the House you
couldn't even get up to speak at that time.
My name is Gary Bierschenk. I farm over in Benton County.
I'm also on the board of directors for an organization called
Organization for Competitive Markets. We're a multi-
disciplinary group of farmers, ranchers, academics, attorneys
and businessmen dedicated to reclaiming competitive markets in
agriculture for independent farmers, ranchers and rural
communities.
I have a couple suggestions. I'm glad that you think that's
important because I believe there's only two places to get the
money for the farmer; one is on the marketplace and the second
is from the government. That's been unbalanced in the past.
There's no reason that we can't get our money from the
marketplace if things are managed correctly. As far as USDA is
concerned and their regulation enforcement, I believe the Farm
bill should create a special council for the competition within
USDA that is Presidentially appointed with the advice and
consent of the Senate.
[The prepared statement of Mr. Bierschenk can be found in
the appendix on page 67.]
Mr. Zacharakis-Jutz. My name is Jeff Zacharakis-Jutz--I'll
give you the spelling later. My wife and I farm about 20 miles
west of here and I'd like to point out there's a lot of people
in this audience that helped us get started. We didn't have
families to inherit land from. We didn't get any of that to
start. We got started with $20,000 that we had saved.
The point I want to make is simply that we need to do more
to promote new farmers. The new farm program is one way. We
need to be looking more at grass-based dairies, ways that we
can convert CRP for opportunity. As it is now most of the CRP
in our area is a retired package for farmers who struggled
while they were farming and are doing quite well thanks to CRP.
I just think we need to do more to help new people get into
farming. I hope the new Farm bill does that.
Mr. Petersen. I'm Chris Petersen, vice president of the
Iowa Farmer's Union.
No. 1, I hope, Senator, you can leave a legacy of saving
the family farm. You're on the right track. We need to get away
from a policy that eliminates family farmers. The government
has been guilty of this and the farm bureau and commodity
groups. I enter a 60-Minutes tape as evidence of that. We need
a new farm bill centered around family farms, conservation. We
need a competition title and we also need to keep EQIP funding
for CAFO down so it helps the family farmers. Thank you.
Mr. Dietrich. My name is John Dietrich. I'm a policy
analyst for the American Corngrower's Association and Farmer's
Union of Nebraska. I also advice a number of other fellow
organizations around the country on agricultural policy.
Thank you for the opportunity to talk in Iowa today, your
home state. I hope people from Iowa recognize that you're
viewed nationally and have been viewed nationally for many,
many years as a leader and a rural advocate for rural
communities and farmers for many, many years. You're very lucky
if you're in Iowa to have Senator Harkin. Today I'd like to say
that all these statements by all these people today boil down
to one thing in the end; Specific legislation must be put
together by the agriculture committee that addresses the
concerns of all these people's needs like this around the
country and that's a very, very difficult job.
Over the past 2 years my organization and other
organizations that we work with have put together a farm bill
proposal called the Family Farm Agriculture Recovery and
Maintenance Act. That's a proposal that was put together by a
number of individuals and organizations based on the things we
hear. We listen. It's the only farm proposal that does three
things; improves market price, improves farm income over
current levels and maintains or stays within the budget. I'd
like if I could--I know I'm running over--address two
particular items that you have interest in particularly;
targeting, which everybody has an interest in, and rural
development.
Our proposal targets farm price supports to buy maximum
volume of bushels or pounds produced. The limit would be simply
based on a family farm unit which would consist of the
operator, spouse and minor children. The limit would apply to
that unit whether that unit was--whether those names appeared
in a single operation or in multiple entities. One individual
limit would be set for that unit. It will do a number of
things. I need to get into more specifics with you, but it's
based on volume rather than dollars--bushels and pounds rather
than dollars. There's enormous value differences in cotton and
rice, for example, compared to soybeans and wheat and corn. We
would bypass those things by basing the limits on volume.
What I'd like to talk about second is rural development. As
you mentioned, I think you said one out of fifteen in rural
communities are farmers. We believe that if you design a farm
program that enhances farm products and saves program
expenditures that that money and those years of cost savings
should--some of that money should be redistributed into the
rural communities so that communities can immediately see the
positive benefits of higher farm prices. They need a share of
it just like we do. That's all. Thank you.
The Chairman. John, thank you very much. At the end of this
I am going to have a statement to make about the pork checkoff.
Mr. McGivern. Thank you, Senator. I'm Ed McGivern from
Keystone in Benton County, Iowa. I have been farming for more
than 50 years. I want to congratulate and commend Senator
Harkin for his work he's done not only lately but throughout
his political career with farming.
We all know that there is a crisis. We are already at the
accident. There are people bleeding whether we can see it or
not. We need to stop the bleeding and then let's work on
something to revive the patient.
We need to have a new farm bill. I believe very strongly
that that bill should not exceed 5 years. God forbid we would
have a 10-year one like we have now. We also need to make some
things simple and we know that that's not always possible. We
need higher loan rates, we need a conservation program and we
certainly need a conservation reserve--not only for energy
security but for national security. Those of us old enough know
what happens. When we have 100 people we have anarchy.
Again, Senator, thank you very much for your time. We
appreciate this.
I want to just say one thing. The senator is working hard
on our behalf. He cannot do it alone. He needs our help and if
it means standing up and taking the first stand, let's do it.
Let's support him. Thank you.
The Chairman. I see we're losing people, but I had a number
of questions that I wanted to ask and get a show of hands. I
wonder if I should do that before too many people leave. Is
that OK?
I wanted to get a sense of how people felt here about
certain things. I just want to get a show of hands. They may be
general-type questions. They're not real specific. I wanted to
get a feel of how you feel about these things. I have about six
questions.
Should we raise commodity loan rates? How many think we
should?
[Show of hands.]
How many feel that there should not be any raise in the
marketing loan rates?
[Show of hands.]
Should we restore the farmer owned reserve? How many people
believe we should have a farmer-owned reserve?
[Show of hands.]
How many people don't believe we ought to have a farmer-
owned reserve?
Should Federal programs incorporate some kind of type of
payment limitations? I'm not saying where or what. Generally,
should they incorporate a payment limitation? How many think
they should?
[Show of hands.]
How many don't believe there should be an effective farm
payment limitation? How many say no to that?
[Show of hands.]
Should we have some kind of a voluntary set-aside program
for a shorter period of time? I don't know the number of years,
but some shorter period than the CRP. Should we have that? How
many believe we should have a voluntary set-aside program?
[Show of hands.]
How many don't?
[Show of hands.]
EQIP, should we limit the eligibility for cost-share
payments for livestock operations? Should we limit them under
the CAFO limits of 1000 head or should we go above that? How
many think we should limit eligibility for cost-share payments
for livestock under EQIP?
[Show of hands.]
How many people don't think we should?
[Show of hands.]
Should the length of the Farm bill be--The house passed 10
years. Should the length of the Farm bill be--Put it this way.
How many people favor a 5-year farm bill or a 10-year farm
bill? How many people think we ought to do a 10-year farm bill?
[Show of hands.]
How many people think we ought to do a 5-year farm bill?
[Show of hands.]
I'm just trying to get some idea whether it ought to be
longer or shorter. I hope that's fair. All right. Thank you
very much.
Mr. Bremley. I'm Ron Bremley from Morley, Iowa. We ought to
have a 5-year plan for a farm bill. If it works, continue it.
If it doesn't work, I don't want to be suffering what we've got
now. There should be an energy title in the next Farm bill
because I think we have a renewable product out here with corn
and soybeans for fuel. The farm subsidy should be raised, but I
think we shouldn't be using the Federal Government to subsidize
someone for getting huger and huger all the time. There should
be a cap on that. I got a lot more to be said, but I want to
hear the other people.
Ms. Holdgrafer. My name is Carrie Holdgrafer. My husband,
Brian, and I farm in east central Iowa east of Maquoketa. I
guess the issue that I would like you to clarify is what
exactly is a family farm? My husband and I are part of a family
farm. It's my husband, his brother and his father. Sometimes it
is more family than I can stand. It's also large and it's grown
significantly in the last few years, enough so that I left a
career with a Fortune 500 company to stay home and work on the
farm. It's grown and it will continue to grow. As I look around
and see the average age of the farmer in America and rural
America today, it's going to have to grow because somebody our
age has to farm those acres someday. The peers that I went to
school with, I went to college with, many of them chose not to
go back into production agriculture. Some of them didn't have
the opportunity. Some of them chose not to. It's hard work and
they had other interests and other things they wanted to do.
Our age group is going to have to take responsibility.
Somebody's got to farm the acres. If we don't, Brazil will.
I guess another thing I'd like to say is that when I was
young girl my mom and dad said if you sell a lot of Girl Scout
cookies, you're going to win the contest and I did. When I went
to college they told me, if you build a good resume you're
going to get the best job offers and I did. They told me when I
started farming with Brian, if you work hard and you work long
hours and you're innovative and you're aggressive you will grow
your acres and you'll make it and we have. I hope that we will
not be kept from growing--even though we're a family farm--by
limitations if the reason we're growing is because we are
aggressive. We skip things our friends go to because we work.
We run extra custom businesses. We do things to make extra
money and to make our input costs low. We're not growing
because of an AMTA payment. We're growing because we work hard
and we work aggressive and we're going to keep doing that
whether the money comes from the government or not.
Ms. Jennifer. My name is Jennifer. I want to ask you
something. My aunt and uncle owned a farm up in Dyersville and
they could not make it in farming because everyone was just
buying up everyone else. They have no one to sell their hogs to
but IBP in Waterloo so why can't they have one in Dubuque
that's closer? Could you explain that problem?
The Chairman. What's the question?
Ms. Jennifer. They want more marketing to sell their
products to.
The Chairman. We just don't have enough packers out there.
That's what we're talking about by putting a concentration
title in the Farm bill.
Mr. Holdgrafer. My name is Brian Holdgrafer and I can't
believe a group of farmers could sit here for two and a half
hours and talk about a farm bill and never bring up one good
thing that's come out of the last program and that is
government assistance and CRC Federal profit program. All the
money that you guys are kicking into second payments, if you'd
rethink that once and channel that money putting it into CRC--
putting it into the premium we pay and taking it from $30 down
to $10 or $12 which most of us like to pay we don't need all
this safety net because the Federal crop program will take care
of itself just like every other insurance in the world takes
care of itself for automobile accidents and everything.
I guess one other point I just want to say is everybody
that voted to have a set-aside, I hope you remember that every
acre we do not farm Brazil will farm. Somebody will produce the
corn and the beans. If you want to let them do the farming and
us do the set-aside, that's fine, but I hope you remember that.
It don't matter what we do, somebody will grow it.
Mr. Peters. My name is Bruce Peters and I thank you very
much, Senator Harkin, for coming to the middle of America and
listening to all the farmers. It provides me with a great
opportunity to be here, to be able to see. I'm originally from
Kansas. I grew up on a small farm in Kansas. I'm one of the
farm casualties of the 1980's. I went back to farm and because
the prices were climbing at the time I lost my farming business
and had to go back and work in industry. I'm working for a big
industrial company on the Fortune 500 now which is not what I
really like to do. I look out here and I see the average age of
farmers here is probably 50's and up and I certainly appreciate
you trying to help get small farmers started. That's one thing
that I think the Farm bill should really help.
The other thing is that every time I drive through--We have
corn in Kansas too and every time I drive by a farm field I see
an oil well. I applaud you for your opportunity to look at
vision because when you compare the cost of farming in Brazil
and the cost of farming here, they can grow soybeans and they
can grow corn a lot cheaper than we can. On a global basis it's
hard for us to compete. We do need some safety nets to help us
in low prices because for the last two or 3 years farm prices
have been pressed to the point where we're selling our products
for less than we produce it. Prices will go up in the future,
but we need more markets is what we really need. We need the
opportunity of the Federal Government to help us get into
ethanol markets and get into soy diesel. Right now the gasoline
that we sell in America, only 1 percent of it has ethanol in
it. If you compare that to Brazil, 22 percent of the gasoline
in Brazil is ethanol and it's going up to I think 28 percent. I
would like a new-based agriculture and not the old agriculture
where you have all these safety nets and everybody depends on
the government. We need more vision. We need to look forward to
providing value-based agriculture and getting the farmer to be
able to compete with farming. That's the real problem that we
have. We just can't compete.
The Chairman. I'd just like to respond to the last couple
of people. If all we're going to do is to continue to try to
compete on the global market on a who-to-defeat basis, we're
going to have our lunch handed to us. First of all, recognize
we are in a global market. We are there. The doors are open. We
may wish we could turn the clock back, but it isn't going to
happen. If all we're going to do is compete on a food and feed
basis Brazil is going to beat us. They can grow soybeans so
much easier--and corn.
I was in China last summer. I remember when the Freedom to
Farm bill was passed in 1996 thinking China is going to be
buying corn, they're going to be improving their diets, they're
going to have this growing economy. Last year China not only
fed one billion people, it exported corn and they have hybrids.
They've got corn just as good as anything you'll see out here
and they've got more land to put in production. I visited those
farms and mile after mile is some of the best corn you'll see
anywhere. Guess what, none of the farmers own that land. They
don't have that cost. The government owns it all. I don't like
that system. I don't think it's a good system, but you have to
recognize the reality. I believe just what you've said and
others have said. We've got to look for new markets. It's not
just taking land out of production. That could be a dead-end
street. Obviously we have to have conservation. I'm big on CRP.
We'll expand it. I have my Conservation Security Act. We've got
to look at energy. Now, our energy needs are not going to go
down and we know that we can compete on that basis. It may take
some up-front money.
Second, value added other processes, building materials and
other things that we can make out of the crops and residue that
we have. We can look at pharmaceuticals and biotech. Some of
you may be opposed to biotech, but it's here. We can't turn
back the clock. Through biotech we can raise different types of
things out there. Farmers might be able to market their beans,
their oil seeds, their rice, their corn, their soybeans for
other things in terms of pharmaceuticals, other things that we
might want to get from that for different purposes. I see all
that out there and I think I understand the thrust of it and
that is that we can do more than just grow food and feed.
I have a picture in my office taken in the year I was born,
1939. It's a picture of Henry Ford, the old guy, the first one.
He's got a baseball bat in his hand and he's hitting the trunk
of a 1939 Ford with a baseball bat. He's hitting the trunk of
the car. He was demonstrating that this trunk wouldn't dent and
wouldn't break when he hit it with a baseball bat and it was
made out of soybeans. That was 1939. Henry Ford predicted that
the car of the future would be built from soybeans. With all
the things that they had--plastic--it would be built out of
soybeans. What happened to that? World War II. We needed oil
and we needed petrochemical products. We built that whole
industry up and we've lived on it ever since. Even the
visionaries of the past recognize what else we can do with this
great productive capacity we have out there on our
countrysides. In the 21st century that we have to think about
it too and what we can do with that great productive capacity
out there may not just be food. It may be a lot of other
things. Before you race out of here and say, oh, Harkin doesn't
want to produce food anymore, I'm not saying that. I'm just
saying we need to build new markets. There are other things we
can do with that productive capacity. I didn't mean to take so
long, but I just wanted to respond to some of the things.
Mr. Sand. I'm Dwayne Sand with Iowa Natural Heritage
Foundation in Des Moines. We want you to know how much we're
depending on you to provide leadership in the Senate and to get
a good farm bill. You've got your work cut out for you. I'll
just mention four of the really bad ideas that are coming your
way from the House side.
First of all, the intent is to duck Swampbuster. The effect
on that--while some farmers would like it--is that the economic
research service shows that Swampbuster keeps 13.2 million
acres out of production that could otherwise be farmed. The
impact of that if it were to happen would be a reduction from
$1.6 to $3.2 billion less net farm income every year in the
long-run. We want you to save Swampbuster.
Second, we're concerned about rewarding farmers who bowed
out and created more crop land. The most recent USDA inventory
showed 12.7 billion additional acres plowed out from grasslands
to wetlands in the 5-year period of 1992 to 1997. We're
concerned that the provisions in the house bill will just
accelerate that trend, especially the way it rewards soybean
production.
My third point is what they've done to EQIP as far as
ducking the watershed program. Their intent is to spread the
money over far more areas. However, in Iowa we've got 157 water
bodies. We really depend on that watershed money if we're going
to have any hope to clean up farm requirements under the
Federal Clean Water Act.
The fourth comment I wanted to make to you relates to your
funding of CAFO. The House would allow $200,000 per feed lot
with no limit on size. I would suggest to you that we ought to
be looking at a fourth option beyond what you mentioned as the
three.
The fourth one is the use of the clean water state--funded
by EPA in every state. These things could be used for and in
many states are used for livestock manure management, for
businesses that are regulated and their competitors have
already complied with regulations. If we really have an
economic hardship we really ought to be talking about loans
rather than grant moneys, especially for these large
operations. We've certainly worked with your staff to explore
that and we've worked with farm groups to explore that. Thank
you.
Mr. Holecek. My name is Lloyd Holecek from Marion, Iowa.
The answer to your question about every bushel is an
unequivocal no. There's no reason that every bushel should
count. The farmers that are best at farming the farm programs
are the ones that are able to buy out their neighbors. Those
people that take the half a million dollars, of course their
values are up so they can buy out their neighbors that don't
have that same thing. Their values are down.
What we need to do is you need to support the conservation
type programs and I think there would be enough money there to
keep up farmland prices.
The Chairman. Thank you very much.
Mr. Specht. My son spoke earlier, but I wanted to address
something that hasn't been addressed, the dairy. I milk 130
cows near McGregor. The current farm legislation has been
tilted against pay and forge crops tremendously. They're giving
hundreds and thousands of dollars to guys that have corn and
beans. If you grew and cared for the land over decades you have
lost the ability to compete in a neighborhood against
subsidized cash grain operations in our counties that are
driving family farmed dairymen out of business and planting
soybean on hills where they do not belong. I've got a couple
points. My neighbor's got a quarry. He called Jim Jeffords the
man who saved the country. Please allow dairy compacts, the
ability of dairymen to set a minimum price for milk like would
be a minimum wage to extend to the rest of the country. Give
dairymen a chance to set a minimum price for milk. Thank you.
[The prepared statement of Mr. Specht can be found in the
appendix on page 80.]
Mr. Serbousek. My name is Tony Serbousek. I live in Johnson
County and I've farmed basically all my life. One of the issues
that hasn't been touched on here today is the high value of the
dollar. When you take the high value of the dollar against all
the other currency of the world we are the Nation of last
resort to sell our products. Now, the rest of the world is
turning around and producing these products. A lot of this
problem would go away on all these issues if the government
would address the value of the dollar against all the other
currencies of the world.
Now, the import to export ratio is going way out of sight.
We're importing way more than we're exporting and one of these
days it will catch up to us. In fact, I ain't so sure it hasn't
already started. One of the other issues that I want to touch
base on is--When you're talking about this new Farm bill, in
1995 Congress passed a farm bill that gave the most
discretionary power ever to USDA to interpret. This is what has
happened. We have a lot of things going on in the 1995 Farm
bill that was not the intention of the Congress that passed the
law. I feel for one thing that Congress has to take back
control of our elected officials and make the decision, not
USDA. Thank you.
Ms. Smith. My name is Therese Smith and I'm a
representative of the Farm Service Agency County Office
Employees. I represent the eight states in the Midwest area. I
wonder why we can't work doing the farm program together with
NRCS and FSA--delivering the farm program together. To me it
seems the most efficient and the most effective way of
delivering. One of the things that the farmers in this room--
They don't care who delivers the program as long as it's
delivered. If we would combine the two administrative portions
of those agencies together and work this program together we
can do it. Thanks.
The Chairman. First of all, thank you all very much. That
was a good exchange. I said that I would comment on the pork
checkoff and I will. Immediately after the USDA announced the
results under Secretary Glickman there was a meeting in a court
case file that was tied up in court. It was not clear at all
whether the Court would have allowed them to end the checkoff
or not because there were questions about it in the court. Then
the administration changed and Secretary Veneman had to deal
with it. Again, earlier this year it was not clear whether or
not the Court would allow them to end the checkoff. In fact,
the Court issued a temporary restraining order to continue the
checkoff. Veneman, faced with this, agreed to a compromise.
Under that compromise the checkoff would continue, but the Pork
Board would be separated from the National Pork Producer's
Council. The two of them would be separated. Also there would
be a survey taken to see whether or not pork producers wanted
to hold a new vote in 2003.
Now, here are the points I want to make. The case is still
being argued in the Michigan court. It has not come to a
closure. There has been a Supreme Court case recently decided
dealing with mushrooms from Tennessee in which the Supreme
Court held that because certain mushroom producers did not
agree with the type of advertising they could not be compelled
to pay into a checkoff. Big decision. Now it looks as though
maybe the Court just may influence what the Court's going to
decide in Michigan on whether or not people can be compelled to
make that stance.
The checkoff should be decided fairly on the law. The case
in Michigan has yet to be decided. I'm sure that there will be
briefs filed by the lawyers on both sides arguing that the
mushroom case should apply or should not apply on that and then
we'll see what happens after the Court makes its decision. Now,
having said all that, it is my opinion that all of these
checkoffs, every single checkoff we have, ought to come up
periodically for an automatic vote. This ought to be put in the
Farm bill. Every so many years, every 5 years or so, there
should be an automatic vote. There won't be a vote to see if
you have a vote. There will just be an automatic vote by
producers to see whether or not that particular checkoff ought
to continue.
With regard to pork checkoff I think basically we're in a
situation where we--basically I think Secretary Veneman did
what was reasonable and responsible. With the pending case in
Michigan----
Audience member. You've only told one side of the story.
The Chairman. If you want to go with the temporary
restraining order, that's going to continue the checkoff
without separating the boards. At least Veneman separated the
boards out.
Audience member. Let someone tell the other side of the
story.
The Chairman. That's where we are right now with the pork
checkoff right now. As I said, I'm going to put this in the
Farm bill and we're going to have a vote every 5 years on all
the checkoffs.
Audience member. I voted a legal and binding vote. The ones
that voted for it did the same thing. Independent farm
producers voted to end the mandatory pork checkoff. We won that
vote in a legal and binding vote. You're supposed to stand up
there for democracy and tell Secretary Veneman that she did not
do what was right. Now, there's a court case involved in
Michigan, but that judge did not hear all sides before that
ruling was made and before Secretary Veneman acted. She acted
out of line. You should stand up and say that she acted out of
line.
The Chairman. That's why it's in Federal court. I don't
know which way they're going to decide. I don't care. I mean, I
do care, but we're going to put it in the Farm bill.
With that the hearing is adjourned.
[Whereupon, at 12:55 p.m., the hearing was adjourned.]
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