Date: 1984-04-03
Speaker: DE LA GARZA (democrat)
Chamber: H

Mr. Speaker. I yield myself such time as I may consume. Mr. Speaker. I am bringing to you today a conference report on H.R. 4072. This measure provides substantial cost savings in the farm programs by freezing target pricesin the case of wheat for the 1984 and 1985. crops and in the case of the other major crops for the 1985 crop. The target prices serve as a basis for payments to farmers to make up the deficiency that occurs when market prices fall below the target prices set by law. The net result of this action is to save almost $2.7 billion in Government costs for the period through 1987. thereby providing an important contribution toward control of the Federal deficit. This action is of particular importance on the eve of consideration of the first budget resolution. I might say that enactment of this report has been assumed in the various budget proposals that will shortly be before the House. The conference report is a bipartisan measure that has the full support of the administration. There are other important features in the conference report that have been agreed to by the administration in return for the cost saving features of the report. These other features are of significant importance to the farmers of the United States. First. this measure provides increased incentives for farmer participation in the surplus control programs for wheat. feed grains. upland cotton. and rice. This aspect of the bill will help bring better balance between supply and demand thereby assuring a more solvent agricultural economy and in the long run save the Government costly expenditures. The conference report expands Government efforts to boost agricultural exports. The export provisions will help redress the sharp falloff in exports of U.S.-produced agricultural commodities that her occurred in recent years. When this administration took office. exports had reached a high of approximately $43.8 billion. but for a variety of reasons they shrank sharply to $34.8 billion in fiscal year 1983 and have revived some this year. Despite the need to strengthen our balance of payments. the President recommended in his budget a reduction of a billion dollars in the offbudget export guarantee program. The report affirms a commitment by the administration to restore those funds and provide other incentives for adding to our exports. It will also establish a new expedited program for sharing our abundance of surplus dairy products and wheat with needy people overseas. Finally. the report contains several important farm credit provisions. It requires the Department of Agriculture to open up its economic emergency loan program to direct loans so that the program which was initiated in December as a result of court action will be available to the farmers in need as required. It also includes a number of actions .which the administration could have taken under its existing discretionary authority but has failed to take. H.R. 4072 originated in the House as a bill with provisions relating solely to wheat. In the Senate. provisions relating to the other issues were added to the bill. Many of the items relating to the agricultural credit programs are similar to provisions that had passed the House 2 years ago and again last year in H.R. 1190. The conference report includes many compromises. It does not include a numnber of provisons which were favored by a majority of the House conferees but which we could not persuade our Senate friends to adopt. Many of us would have liked to have included a number of additional provisionsfor example. provisions relating to soil conservation. such as sodbuster and conservation reserve features. I want my colleagues to understand that we have not given up. We will continue our efforts for their adoption. The benefits of the conference report are not limited to farmers. Mr. Speaker. They accrue as well to the consumer. the processor. and the middleman. These sectors of the economy depend upon a stable supply of food and fiber at reasonable prices. They must be able to pIan ahead in making budgetary decisions. The conference report contributes toward this objective by promoting economic conditions under which producers can continue to supply quality food at stable prices. I might add at this point. Mr. Speaker. that the American consumer. that is. the American family receives the best quality food in the world. possibly in the history of the world. for the least amount of disposable income of any major country in the world. Mr. Speaker. in recent years. more often than not. they are able to purchase at market prices which are less than it costs the farmer to produce. I might add here. Mr. Speaker. that we in the United States have a responsibility. and I think it is a legitimate function of government that we work with our farm sector to stabilize the supply. enhance the quality wherever possible. and stabilize the cost to the consumer. I say this because today in the United States of America our balance of trade is negative and getting worse daily. One of the only positive elements is the agricultural sector. It pains me to have to say this. and I ask my colleagues from urban and other nonagricultural areas to listen to me when I say that a healthy farm economy is needed to enhance the position of the United States in our balance of trade. The world is no longer buying what we manufacture. They do not buy our cars. our television sets. our calculators. et cetera. and this is too bad. We have to work and see if we can turn that around. But for the time being. they are buying what we produce in agriculture. This is a positive sign. The conference report is not a perfect measure. This is not the measure that I would write if I were doing it by myself. This is not the measure that our committee. the Committee on Agriculture. would write if we were doing it in a vacuum. But we have to deal with reality. We have to deal with the art of the possible and craft legislation that is viable. that saves money. and that accomplishes the intended end purpose of the agricultural sector. There are some members of our committee who are not happy with this legislation. There are some areas that were not touched. There are some areas that were not amended. and possibly we will hear from them later. But I ask them. Mr. Speaker. and I ask my colleagues to understand my situation. This Is the best we could do under the circumstances in which we find ourselves. More often than not. the agricultural community finds itself in a position of having to take less than we would like to have. But we have to take what we see as a viable. workable alternative to chaos and economic ruin and forestall eventually. heaven forbid. the destruction of that great factor which is the agricultural productivity of this great country of ours. Mr. Speaker. at this time I would like to summarize for the information of the members. the highlights of the conference report. First. for wheat. the report provides a.s follows: It provides a target price of $4.38 per bushel for both 1984 and 1985. instead of $4.45 and $4.65 in those 2 years as provided in current law. For the 1984 and 1985 crops. it provides that growers who want to qualify for price supports must make a total acreage cutback of not more than 30 percent. This cutback would consist of not more than a 20percent unpaid acreage reduction plus a 10percent paid diversion. with a payment rate of at least $2.70 per bushel. At least 50 percent of the diversion payments must be made at the time growers enroll in the program. It provides that for the 1984 crop. in addition to the 30percent acreage cut required to qualify for price supports. growers would have the further option of making an additional 10- to 20percent acreage reduction. with payment to be made in kind. in the form of wheat. rather than in cash. The payment rate would be based on 85 percent of the farm program yield rather than the 75 percent set earlier by the administration. The bill also permits haying and grazing of acreage diverted from production under the 1984 wheat program at the option of the State ASC committee. Second. for feed grains. the report provides as follows: It leaves the 1984 program unchanged. but freezes the 1985 corn target price at $3.03 per bushelthe 1984 levelinstead of the $3.18 provided in current law. For the 1985 crop. it provides that if the Secretary estimates that the corn carryover level on September 30. 1985. will exceed 1.1 billion bushels. the Secretary must establish an acreage retirement system as a condition of eligibility for price support. The total acreage cutback required for eligibility would be 5 to 20 percent. with diversion payments to producers on not less than 5 percent of whatever total is announced by the Secretary. If the total reduction required exceeds 15 percent. the excess over that level would be equally divided between paid diversion and unpaid acreage reduction. If the total reduction is 20 percent. for example. 7.5 percent would be on a paid basis. At least 50 percent of the diversion payment would be made at the time of signup and the payment rate must be at least $1.50 per bushel. It authorizes the Secretary to make price support loans to producers who cut their 1984 or 1985crop corn for silage. The loans would not be made directly on the silage. They would be made on other 1984 or 1985 corn acquired by the producer to serve as security for the loan. Third. for upland cotton. the report pcovides as follows: It leaves the 1984 program unchanged. but freezes the 1985 target price at 81 cents per pound. the 1984 level. instead of the 86 cents required by current law. Also for the 1985 crop. it provides that if the Secretary estimates that the upland cotton carryover level on July 31. 1985. will exceed 3.7 million bales. he shall require any grower who wants price support to make a total acreage cutback of at least 5 percent. If the Secretary determines that a deeper production cut is needed. he could require further reductions. For the initial 5 percent reduction. growers would get diversion payments of at least 27.5 cents a pound. There would be no payment for any further required diversions which bring the overall acreage cut to a total of 25 percent. but payments woud be made on any portion of the total reduction ordered beyond 25 percent. If the Secretary estimates that the carryover on July 1. 1985. will exceed 4.1 million bales. the diversion payment rate will be at least 30 cents. and if the carryover is estimated at more than 4.7 million bales. the payment rate must be at least 35 cents. At least 50 percent of whatever diversion payment is due to a producer would be paid at the time of signup. Fourth. for rice. the report provides as follows: It !caves the 1984 program unchanged. but freezes the 1985 target price at $11.90 per hundredweight. the 1984 level. instead of the $12.40 required by existing law. Also for the 1985 crop. it provides that if the Secretary estimates that the rice carryover level on July 31. 1985. will exceed 25 million hundredweight. the Secretary shall require growers who want to be eligible for price support to make a total acreage cutback of at least 25 percent. The cutback would include an unpaid reduction of 20 percent. and payments at a rate of at least $2.70 per hundredweight would be made for reductions above 20 percent. At least 50 percent of the diversion payment would be made at the time of signup. If the Secretary estimates that the carryover level of rice on July 31. 1985. will exceed 35 million hundredweight. the payment rate will be at least $3.25 per hundredweight. and if he forcecasts the carryover at more than 42.5 million hundredweight. the payment rate will be at least $3.50 per huindredweight. Fifth. for agricultural credit. the report provides as follows: It requires the Secretary to make Farmers Home Administration (FmHA) natural disaster emergency loans available based on Individual production losses for producers whose operations are located in counties contiguous to counties in which the Secretary has found that farming operations have been substantially affected by a disaster. It permits applications for natural disaster emergency loans to be filed within 8 monthsof the disaster declaration. Also. it permits the valuation of farm assets used as collateral for emergency loans to be based on the value of those assets 1 year before the date the Governor requests disaster assatance. if that value is higher than the current value. Regarding the $600 million economic emergency loan program to be carried out under a Federal court order during fiscal year 1984. the conference report requires that at least $310 million of the total will be available for insured economic emergency loans. This is $250 million above the currently scheduled allocation for insured economic emergency loans. Further. the report authorizes the Secretary to raise the insured loan total above $310 million if necessary to achieve program goals. after taking into account the amount used for guaranteed loans. It raises the loan limits for loans made to farmers for operating purposes from $100.000 to $200.000 for insured loans. and from $200.000 to $400.000 for guaranteed loan. It extends the maximum repayment period for consolidated or rescheduled FmHA farm operating loans from 7 to 15 years. It requires that any insured farm loan that is deferred. consolidated. rescheduled. or reamortized bear an interest ratefor the remaining balance and term of the original loaneither at the original rate or the thencurrent rate. whichever is lower. It insures that at least 20 percent of the farm. ownership and annual operating loans for fiscal year 1984 go to lowincome. limited resources farmers who most need this assistance. It prohibits FmHA employees who act upon or review an application made by a farmer for the purchase of a particular parcel of real estate from purchasing any interest in that real estate for 3 years. It authorizes the Secretary to develop and implement a program for the amortization of FmHA loans from future revenues generated by timber crops on land previously used for commodity production and subject to existing FmHA liens. The Secretary is required to report to Congress within 180 days on the feasibility of such a program. April . 1984 II12180 April . 1984 Sixth. the export program provisions in the conference report are as follows: It expresses. as the sense of Congress. a request for prompt implementatsion by the administration of its agreement to: First. ask for appropriations providing $325 million in additional funds for Public Law 480. This would include $150 million for use in fiscal year 1984. in addition to the Presidents earlier request for a $90 million supplemental appropriation for drought relief to Africa. and $175 million for use in fiscal year 1985. second. provide in fiscal year 1985 an additional $100 million for direct export credit programs. and request or use another $50 million for either Public Law 480 or direct export credit programs. and third. provide for an increase of $500 million in export loan guarantees for fiscal year 1984 and a $1.1 billion increase for fiscal year It establishes a 2year pilot program under which the Commodity Credit Corporation will *use surplus dairy products to acquire. through barter or exchange. 40.000 metric tons of ultrahigh temperature processed fluid milk for donation to needy persons outside the United States. It gives the Secretary authority under section 416 of the Agricultural Act of 1949 to donate wheat. as he now can donate dairy products. to needy persons in foreign countries. Also. the bill would allow donated commodities to be bartered or sold. with the proceeds and services to be used for activities consistent with providing food assistance to needy people. Commodities would be donated for carrying out title II of Public Law 480. as approved by the Secretary. under expedited procedures. The donated commoditiescould be provided under multiyear agreements. and the Commodity Credit Corporation would be authorized to pay transportation. reprocessing. packaging. and similar costs associated with such donations. For the information of my colleagues in the House I also wish to summarize the differnces between the conference report and the Senatepassed bill.