Date: 1983-07-11
Speaker: DE LA GARZA (democrat)
Chamber: H

Mr. Speaker. I do not know whether President Reagan will hear what I have to say today. But I hope so. because there is still time for the President to prevent a totally unfair action by his administrationan action which could be a financial disaster for many cotton farmers. There is not much time. Mr. Speaker. Within a few days. the Agriculture Department will begin the process of commandeering cotton from farmers in my congressional district in order to get supplies for the paymentinkind program. In coming weeks. this process will move into the other cotton growing sections of the country. The facts in this case are clear. Cotton farmers early this year were told that if they enrolled in the paymentinkind program to reduce surpluses. the Government would not need to take 1983 cotton for use in making the inkind payments. Yes. I know the USDA retained the legal right to take 1983 cotton. and provisions to that effect were in the program contracts. But the farmers were told not to worry about those contract provisions. They were told the provisions would not be exercised. The farmers relied on those assurancesand because they relied on those words from Government officials. many farmers are now facing an economic disaster. In my district. as in many other areas. farmers normally sign advance contracts with private buyers for their cotton. What is about to happen is simple and disastrous. Farmers will harvest their cotton. but they will not be able to fulfill their private sales contracts because the Government is commandeering part of their crop. The result will be economic chaos. and farm experts in my district tell me that many producers will not be able to bear the resulting costs. In some cases. there could be a real threat of bankruptcy. Farmers in my district report that 78 percent of our cotton is covered by forward contracts. along with 80 percent of the cotton our farmers are scheduled to be given as PIK payment. Because of this. I am told that forcing our 1983 cotton into Government hands for use in PIK payments will cause growers and shippers to short every contract by about 45 percent. This is happening. I want to repeat. after farmers enrolled in a Government program with assurances from Government officials. Now. because circumstances have changed. the assurances turn out to be wrong. The USDA told us it would not take our 1983 cotton for PIK. and now it is doing just what it said would not be done. Our farmers are frustrated at this turnaround. They are angry because they feel the administration has broken faith with them. In my area alone. this breach of faith could cost farmers up to $20 million. and it could touch off lawsuits based on the fact that producers will not be able to deliver the full amount of cotton covered by their existing private contracts. There is a simple. clean. and fair way out of this problem. Congress can direct the Agriculture Department to get the cotton it needs for PIK payments by using a voluntary bidding processjust as the Department has done with other crops. The House Agriculture Committee has already approved a bill to this effect. and similar legislation may be considered in the conference committee on the 1984 agricultural appropriations bill. Mr. Speaker. I hope we can act quickly on this legislation. But we all know that the legislative route may take more time than it should. And there is another solution. if the President will use it. The President has the power to act today. He does not need any new law. All he has to do is tell the Office of Management and Budget to drop its objections to using a bid process to get cotton for PIK payments. By tomorrow morning. this problem could be effectively solved. That is why I am appealing to the President. We have thousands of farmers who are in a crisis situation today because they relied on the word of Government officials. That is not fair. That is not right. The fair thing to do is to modify the USDAs policy so that a program which was set up to help cotton farmers can be operated without driving some of them Into bankruptcy. I know the President prides himself on his spirit of fairness. and I hope that spirit will lead him to solve this very serious problem. If he does not. then Congress must actand we must act quickly.