Date: 1982-08-10
Speaker: BE LA GARZA (democrat)
Chamber: H

Mr. Chairman. I rise in support of the bill. H.R. 6892. The bill provides changes in legislation to meet reconciliation requirements imposed on the Committee on Agriculture by the first concurrent budget resolution for fiscal year 1983. GENERAL The actions taken by the committee exceed by $1.3 billion the goals prescribed by the reconciliation instructions of the budget resolution. Under section 2(c)(1) the Committee on Agriculture was asked to report changes in laws under the jurisdiction of the committee that would reduce spending by $779 million in fiscal year 1983. $1.083 billion in fiscal year 1984 and $1.428 billion in fiscal year 1985. H.R. 6892. instead. would yield savings of $1.276 billion in fiscal year 1983. $1.724 billion in fiscal year 1984. and $1.596 billion in fiscal year 1985. These net savings were achieved by amendments to the commodity programs and by amendments to the Food Stamp Act. The amendments to the commodity programs would result in savings of a total of $3.270 billion over the 3 years. and the amendments to the food stamp program will yield savings totaling $1.326 billion over the 3 years. The amendments to the commodity programs are designed to achieve supply adjustment by alleviating surpluses which. in the case of the dairy Rose Rosenthal Santini Savage Selberling Sillander Skelton Traxler Watkins Weiss Whitehurst Wilson Wolf Young (MO) Zeferetti program. have resulted in excessive Government costs and. in the case of other farm commodities. have depressed farm prices and contributed to a decline in real farm income which is at its lowest level since the Great Depression. Mr. Chairman. I think the committee has done an exceedingly good job. not only in complying with the requirements imposed on us by the Budget Committee and by the House. but by affording the House and eventually the taxpayers of this country far more savings than we were requested to do. This was done because of our interest in helping the largest number of people with the smallest number of dollars. and when we make reductions. we seek to cut the largest amount of dollars in a way that would affect the least number of people. That is within the art of the possible. and that is what we have to deal with in the legislative process. I know there are many Members who are not satisfied with this legislation. That is only proper and expected in a body such as this. You could see by the vote on the rule that many Members. a large number. were unhappy that we would have a modified closed rule. and that. of course. is their prerogative. And some of them may be correct in their concern. But in order to have the necessary flexibility to make cuts. very difficult and painful cuts. in programs that are so dear and near to the hearts of so many of our Members. we had to have that type of rule. Otherwise. we could not come here and open up the entire bill to amendment. because many of thoseand I say this and I hope that my colleagues would listenwho are dissatisfied with our product are dissatisfied because we cut too much. because their program is not given more assistance since that would have added to the cost. I say to those Members that they have the right to disagree. but it would be very difficult if we were to come here. under the guise of working on a budget resolution in reconciliation. to try and reduce savings if we were to have a run. if you would call it that. on the budget. by adding more expensive programs. I know that in one of the areas. in dairy. one of our dear colleagues. of course. is very dissatisfied. But his resolution would cost exceedingly more than what we have come with. So. again. I would hope that the Members of the House would support our effort. the very sincere and dedicated effort of this committee. of all its Members. and the subcommittee chairmen. that what we have done is: First. within the art of the possible. and second. that it was not easy but it was very. very difficult to cut anything. To reduce anything in this Government is very difficult. We have gone above that. Now. Mr. Chairman. later on I might have some further comments as to where we are in the economy. the farm economy. and why the need for this legislation. But. for the time being. I will just say that I would hope that all of the Members of the House would support our effort in this legislation. which was done with the very. very difficult task of reducing expenditures. but it was done. I think. in an exceedingly good manner by the Members of the Agriculture Committee. The committee would also point out that it recently reported out a bill. which has since been enacted into law. to insure that the tobacco price support program will be carried out at no expense to the taxpayers. The Congressional Budget Office estimated that this legislation will result in savings totaling $44 million over the next 5 fiscal years. The amendments to the Food Stamp Act achieve significant cost savings through measures believed by the committee to represent the least harmful alternatives with respect to needy households dependent upon the program. In this regard. the committee would emphasize that as a result of legislation adopted in 1981 savings were made in the food stamp program which totaled in excess of $6 billion for the 3 fiscal years affected. While the committee was compelled to make further food stamp cuts so as to contribute to achieving the directive that it make cost savings in programs within its jurisdiction. any deeper cuts in the program would impact heavily on the ability of lowincome Americans to secure an adequate diet. DAIRY Title I of H.R. 6892 amends section 201 of the Agricultural Act of 1949. as amended by the Agricultural and Food Act of 1981. to establish a twotier dairy price support program to be imPlemented by a National Dairy Board. The Agricultural Act of 1949. as originally enacted. required the sup port of milk prices at such level between 75 and 90 percent of parity as is necessary to assure an adequate supply. Until recently the dairy price support program has functioned effectively to assure an adequate supply of dairy products at a reasonable cost. bringing stability to an industry which is subject to annual swings in both production and consumer demand. The Food and Agriculture Act of 1977 raised the minimum support level from 75 to 80 percent of parity through March 31. 1979. and required that the support price be adjusted semiannually. Congress. in 1979. extended the 80 percent of parity minimum support level through September 30. 1981. Unfortunately. due to a variety of factors. the purchase of surplus stocks by the Commodity Credit Corporation has grown to record proportions since that time. The committee is deeply concerned about this unprecedented surplus milk production and has acted on three occasions in the last 18 months to rescind scheduled increases in the support level. In the most recent action. the Agriculture and Food Act of 1981 continued through fiscal year 1982 the $13.10 per hundredweight support level. which had been in effect in 1981. This level of support was equivalent to 72.5 percent of parity on October 1. 1981the first time in the history of the program that the support level has been set below 75 percent of parity at the beginning of the marketing year. These actions have not been successful in reducing milk production. For a variety of reasons. milk production continues to expand. although at a decreasing rate. Foremost amongst these reasons for continued expansion is the decline in grain prices experienced last year. Record feed grain production in 1981 depressed grain prices severely. Because grain is the principal cost item in milk production. dairy farmers found it economical to increase feeding rates. increasing milk production per cow. Also some farmers entered dairy farming because of the limited or nonexistent income opportunities in the other sectors of agriculture. Other reasons for the increase in surplus milk production have been the stagnant demand for dairy products caused by the recession. stagnant beef prices which have discouraged the marketing of older. inefficient milk cows. and the expansion of herds caused by setting the support level at 80 percent of parity during the period 197780. Faced with at least another year of record milk production and expenditures for the dairy program. the committee has developed this legislation which will completely restructure the program and create a strong and immediate incentive to reduce produc tion. The principal feature of title I of H.R. 6892 is to create a twotier dairy price support program for the 3 fiscal years beginning October 1. 1982. For that portion of the national milk supply required to meet domestic needs. the support level of $13.10 per hundredweight. which had been in effect for 2 years. would continue through fiscal year 1983. For the next 2 fiscal years. the level of support would be adjusted to reflect the percentage of parity that the Secretary determines $13.10 represented on October 1. 1982. This is now estimated to be approximately 68 percent of parity. For that portion of the national milk supply determined to be in excess of domestic needs. a uniform deduction to the basic support level would be applied. The rate of reduction would be calculated in a manner so as to cover the net cost of acquiring. managing. and disposing of all surplus milk in excess of 5 billion pounds annually. as well as making incentive refunds to producers. The funds represented by this deduction will be collected and remitted to the CCC by the first handler of the milk. Through this system. producers will finance their portion of the cost of the price support program. One of the major criticisms of the current dairy price support program is the absence of any upward limit on dairy purchases by the CCC. Limiting CCC responsibility to 5 billion pounds milk equivalent will achieve an immediate and substantial reduction in the dairy program. By comparison. the CCC will acquire an estimated 13.3 billion pounds milk equivalent of dairy products In fiscal year 1982. Enact. ment of this legislation will achieve savings in excess of $1.3 billion in fiscal year 1983 according to CBO estimates. To provide further Incentive to reduce production. incentive refunds would be made to producers who can demonstrate a reduction in production from that of the previous year. The committee believes this mechanism will provide a strong incentive for producers to Immediately reduce production. The bill also creates a National Dairy Board appointed by the President from nominations recommended by producer organizations. It is assigned majoi responsibilities for administering the program. The committee also addressed the subject of dairy product promotion. H.R. 6892 provides for a coordinated national promotional effort financed by milk producers. If the program is approved in a national referendum by a majority of milk Producers who vote. there would be a 5 cents per hundredweight nonrefundable assessment on all milk mar. keted to be used for the purpose of general advertising and promotion of dairy products. The promotional activities would be limited to processed dairy products for the first 2 years of the program. The program would expire at the end of 5 years unless approved by another referendum. The program would be operated at no cost to the Government and by promoting consumption of dairy products. it should contribute to a reduction of the surplus and the cost of the price support program. Another dairy issue addressed by the committee deals with the donation of surplus dairy commodities domestically and abroad. Subtitle C of title I (section 130) expands the authority of the CCC to donate suplus dairy commodities to needy households in the United States. including households participating in the food stamp program which are ineligible to receive such products under current law. It also provides expanded authority for donation of surplus dairy products to needy persons outside the United States. On this issue Chairman ZABLOCKI plans to offer an amendment which would require coordination of this program with existing donation programs under title II. Public Law 480. There is much merit to his proposed amendment.