Agricultural Act of 2014

Floor Speech

BREAK IN TRANSCRIPT

Mr. President, I rise this evening to discuss the Agricultural Act of 2014--the farm bill conference report.

This legislation has been delayed over 2 1/2 years, weighing the entire time on the minds of farmers and ranchers all across the country.

Last Tuesday I came to the floor to explain why I was the only Senator on the farm bill conference not to sign the conference report and why I cannot in good conscience support this legislation. I am here today to go beyond my philosophical concerns with the direction of the legislation, and I will instead focus on how the farm bill will negatively impact agriculture in my home State of Kansas, as well as other States.

The farm bill is not a simple reauthorization or continuation of our Nation's farm and food programs. We have already done that once with the 1-year extension of the 2008 bill. Instead, the legislation before us should be a wholesale rewrite of the programs and policies at the Department of Agriculture.

When this bill is signed into law by the President and fully implemented, our producers will have to make choices among new safety net programs, new regulations, and new rules. Some of these choices will happen only once and will be irrevocable. They cannot be changed for the next 5 years. This is a 5-year bill. We owe it to these farmers, ranchers, small business owners, as well as to the next generation of producers to get this legislation right. Unfortunately, I believe the Congress has missed the mark in that the conference report goes backwards toward protectionist subsidy programs instead of forward with innovative and responsible solutions.

I am not alone in that assessment. As reported by the Kansas City Star last Friday, January 31, all four Kansas House members voted "no'' on what is arguably the single most important piece of Federal legislation in Kansas. Now, that should grab everybody in America's attention. The entire House delegation from the wheat State was united in opposing this version of the farm bill.

It is not that we do not appreciate agriculture or the producers and their families in our State. It is entirely the opposite. We care so much that after 3 years of work, we will not settle for supporting backwards legislation just to get something done. I call it a look in the rearview mirror.

I understand compromises were made. But I cannot support a bill which marches backwards toward producers making bad decisions based off of government subsidies, retaliation against our livestock producers, and, once again, agriculture taking a disproportionate cut in spending compared--yes--to Federal nutrition programs.

When Chairperson Stabenow and I started the process of rewriting the farm bill, Kansas producers, regardless of what they planted, over and over again said their number one priority and concern was the availability of crop insurance which protects in case of disaster. They were also fully aware that direct payments would no longer be available to them, and most were OK with that direction.

Kansas producers did not ask for a continuation of a target-priced subsidy program and they certainly did not want Congress to raise the target prices of all commodities.

Two years ago, in 2012, the Senate Agriculture Committee and the full Senate passed a farm bill that ended the countercyclical and commodity subsidy programs. If signed into law, the 2012 Senate farm bill would have taken the Federal Government and the Department of Agriculture out of the business of sending signals to producers, essentially telling them what crops to plant. Unfortunately, that reform was never fully realized.

We have something called the new Price Loss Coverage Program that is contained in this conference report. It sets high fixed target prices and subsidies for all commodities and regions of the country.

Last week, after the final details of the bill were released, I talked with a young producer near Dodge City, my hometown, who is a member of my volunteer agriculture advisory council. I fondly refer to them as my "ag posse.''

With the current cash price for wheat at the Dodge City grain elevator around $6 and a target price guaranteed for wheat set at $5.50 a bushel for the next 5 years, I asked this young, successful, and informed producer: What are you going to plant? What he told me should not surprise anyone in this body--or anyone. He said: Pat, I am going to plant wheat for the government subsidy.

His answer only reinforces one of my biggest concerns with this conference report. When the Federal Government guarantees producers a subsidy triggered off a target price, reference price, a countercylical price--whatever you want to call it--it always has and always will lead to planting and marketing distortions.

Today many producers have a college or advanced degree, often in business. They are going to evaluate the programs at the Department of Agriculture and make decisions that benefit their business's bottom line.

Instead of planting grain sorghum or corn or soybeans, my friend in western Kansas already knows he is going to plant the crop he is guaranteed to receive the highest subsidy payment from the government, not from the market. In this case, he plans to plant wheat at $5.50 per bushel over corn which has a target price of $3.70 a bushel.

I have yet to hear one explanation for why Congress is not only including target prices for corn, wheat, sorghum, soybeans, rice, peanuts, and barley but raising and fixing their prices regardless of movements in the market.

Kansas is the breadbasket of the world. So you might think Kansas producers planting more wheat would be a good thing; however, simple economics and history demonstrate why this is such a dangerous road for the Federal Government to take.

When all producers in Kansas and the rest of America have the same price guarantees and signals to plant wheat--no matter where you are--and the majority makes the business decision to follow subsidy signals instead of the market, over time there will undoubtedly be more production than global demand or otherwise.

We will have a surplus of wheat leading to lower wheat prices. That could normally be corrected by market signals, but with the fixed target price, farmers will continue to plant wheat for the subsidy--that subsidy guarantee--leading to further overproduction and even lower crop prices. We have been there before, and that is why we tried to reform the program several farm bills back.

This cycle of overproduction, low grain prices, and expensive support payments could eventually lead back to the days of mandatory quotas and acreage allotments--it has happened before--known as set-asides, paying farmers not to grow anything. We don't need to go back to those days. Our producers in Kansas want none of that from their Federal Government.

Besides having high fixed target prices, the new Price Loss Coverage Program sets the price guarantees so high that some are at or above the producer's cost of production. This would mean the government is essentially subsidizing a producer so much that they are guaranteed to make a profit if they have a normal or average year.

It gets worse. The early analysis I have seen shows that the target prices are high enough that rice, peanuts, and barley growers will receive a subsidy payment at least 75 percent of any given year, likely triggering a payment 4 out of the next 5 years.

Other commodities are not treated as favorably. Wheat prices are likely to trigger a payment, on average, only 35 percent of the time and soybeans less than 15 percent.

What that tells me is that the new target price guarantees are set high enough for a few commodities to trigger subsidy payments with a high frequency.

Folks, this is no longer a risk-management tool or part of a responsible safety net. Make no mistake, the Price Loss Coverage Program is nothing more than a profit protection program from some of our commodity growers.

The lone commodity that has moved out of the price supports entirely was forced to after learning the lesson the hard way.

In 2002, the World Trade Organization ruled against the United States for cotton programs, including a decoupled target price subsidy. In a settlement with Brazil, we have been paying their producers $147 million a year for damages. We are still paying them.

As much as I disagree with the backward direction of the commodity title, Kansas livestock producers may have more beef with this conference report. Kansas is in the heart of cattle country. After 3 years of drought, livestock producers in my home State are waiting for disaster assistance that has been unnecessarily delayed for over 3 years.

Yet when taking the full conference report under consideration, both the Kansas Livestock Association and the Kansas Pork Association strongly oppose this bill. Why?

In a letter sent to me by Jeff Sternberger, president of the Kansas Livestock Association, he says:

We are deeply disappointed the report does not address our two priority issues, mandatory country-of-origin labeling (COOL) and the Grain Inspection, Packers and Stockyards Administration, GIPSA, rule on cattle marketing.

Mandatory country-of-origin labeling, or COOL, is a marketing program; however, our closest trading partners have found the practice anything but cool. Canada and Mexico are two of our biggest and historically strong markets for U.S. beef, pork, and chicken exports. In 2012 alone, Canada imported over $1 billion worth of U.S. beef and Mexico imported over $800 million.

If we do not come into compliance, as required by the World Trade Organization, Canada and Mexico will retaliate against the United States.

Without these markets, Kansas livestock producers will lose value on their products, negatively impacting one of the biggest drivers of our State's economy. Unfortunately, our efforts to fix COOL in the farm bill conference committee fell short--to the displeasure of our livestock producers and trading partners.

The GIPSA rule on livestock marketing should have been addressed in the final farm bill conference report as well. The House version of the farm bill had strong provisions that would have let our livestock producers make their own marketing decisions instead of GIPSA. Yet the provisions were left entirely out of the conference report with no explanation or transparency--behind closed doors.

Finally, I have to address a major inequality in the final conference report; that is, nutrition spending. When the Congressional Budget Office released their official estimate of the budgetary effects of this agriculture act, I was more than disappointed.

According to their letter:

CBO estimates that direct spending stemming from the programs authorized by the conference agreement would total $956 billion over the 2014 to 2023 period, of which $756 billion would be for nutrition programs.

That is almost $800 billion. By the way, that lower figure is a bet on the economy improving and people getting off the SNAP program, which would certainly be good but is not certain.

When you do the math, that means 79 percent--almost 80 percent--of the total spending in the farm bill will go to nutrition programs, including SNAP, the Supplemental Nutrition Assistance Program.

The final compromise includes $8 billion in food stamp savings mainly from tightening the Low-Income Heating and Assistance Program, the infamous LIHEAP loophole, and that is a good thing. States were gaming the system. I am all for that, but that amounts to a 1-percent reduction to the nutrition spending out of a $750 billion program if you believe the projections. I think it is probably more toward $800 billion.

The Senate Committee on Agriculture, Nutrition and Forestry recently released a statement with the headline ``Deficit Reduction: The 2014 Farm Bill,'' showcasing the savings in this legislation. The release highlights the inequality between farm and food programs:

Farm subsidy programs were cut far more significantly than any other area of the budget under the Agriculture Committee's jurisdiction. By comparison, farm subsidy programs were cut by 31 percent, while nutrition programs were reduced 1 percent.

You heard that right. Farmers, ranchers, farm broadcasters listening in, you heard that right. The farm bill once again prioritizes spending for food stamps over all other Department of Agriculture programs, including important conservation programs, research programs, and rural development programs.

I am fine with reducing farm subsidies such as the target price program, but we should have included additional reforms to the nutritional programs, which we tried to do--in several votes--in a reasonable and responsible manner. We were not touching anybody's benefits; we were just looking at the eligibility requirements. But the conference principals decided on the final compromise--again behind closed doors.

While we all want to provide much needed certainty to producers--goodness knows it is been a long time since we had a farm bill in place--the conference missed an opportunity for greater and necessary reforms to our Nation's farm programs, burdensome regulations on livestock producers, and Federal nutrition programs.

After over 3 years of deliberation and disputes over the farm bill, our producers, consumers, taxpayers, and global trading partners expect and deserve more than what is found in this conference report.

As a conferee, I did not sign the conference report last week. That didn't give me any pleasure. As a Kansan and a Senator from a large agriculture State, I am going to vote against this rearview mirror legislation for all the reasons I have itemized.

Having said that, I do wish to take a moment to personally thank Chairperson Stabenow and Chairman Lucas, over in the House, for their unwavering drive and perseverance to finalize a farm bill. It is one thing for me to stand and criticize it and find in my heart and my mind and on behalf of my Kansas producers to vote no because I think that is the right vote, but I also know they have endeavored--Chairman Stabenow and Chairman Lucas--to at least get a bill. It is a tall task to get a majority of the Members of Congress to understand that the farm bill is not simply a bill that you pay off.

I can remember when I was chairman of the committee over in the House and I asked a colleague to help me on the farm bill. He said: Why don't you just pay it? That indicated his broad knowledge of the farm bill at that particular time.

The farm bill is not simply a bill you just pay off. It instead represents important legislation for both urban, rural States and districts and the stability of the world, if you will, knowing we have to feed 9 billion people in the next several decades.

At last, the Chairs have beaten all the odds and are on the verge of completing a very complicated and time-consuming undertaking, to say the least.

I must also thank my colleagues and friends on the House and Senate agriculture committees for their knowledge, their expertise, and their diverse perspectives on agriculture. It is going to be really hard to imagine that many of the faces in the Senate agriculture committee room will not be there in person for the next farm bill 5 years down the road--Senator Tom Harkin, Senator Saxby Chambliss, both of whom will be sorely missed as they have both led the committee in their respective caucuses through previous farms bills. However, they will literally "watch over'' the committee for years to come, because their portraits are on the wall, hanging just above us. I think their eyes move when we consider amendments.

Senator Max Baucus will continue his service to the country as the next Ambassador to China, but we will miss his advice and counsel in the committee.

Finally, it is hard to describe the void that will be created with the departure of Senator Mike Johanns of Nebraska. As the Secretary of the Department of Agriculture, he has seen both sides of the farm bill, implementing one and writing another. Even though Nebraska left the Big 12 for the Big 10, this K-State fan can admit we will all miss having this champion from the Cornhusker State around.

So although I will not vote for the farm bill conference report, I promise to all of Kansas agriculture that I fully appreciate the need for a farm bill, especially one that has been delayed for years. But while we need a farm bill, we do not need this farm bill.

I truly respect the farmers and ranchers and everybody connected with agriculture for what they do as a profession for our economy and for global stability in a troubled and angry world. I just wish the rest of this Senate would do the same thing. I will continue to work and to advocate and to champion agriculture on their behalf every single day.

Mr. President, I yield the floor.

BREAK IN TRANSCRIPT

Source