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Public Statements

Making Emergency Supplemental Appropriations for the Fiscal Year Ending Septmeber 30, 2006

Location: Washington, DC



Mr. KOHL. The supplemental appropriations bill now pending before the Senate includes nearly $4 billion in emergency agriculture assistance. This assistance is necessary for farmers and ranchers to recover from natural disasters that have occurred over the past year. This assistance is not only related to the horrible storms that ravaged the Gulf of Mexico coast last summer, but it also will be available for producers across the country who have similarly suffered from floods, storms, wildfires, drought, and other severe weather events.

Also included in this assistance package is a provision to provide supplemental economic loss payments to producers of certain crops. The primary purpose of this assistance is to help compensate for the impact of high energy costs on agricultural producers. We must remember that while many businesses can pass on increased costs of production to consumers or other purchasers, the nature of the agriculture economy is such that farmers and ranchers are very limited in their ability to pass on such costs. Yet the costs of fuel, electricity, and other energy inputs are a very large part of the overall costs of agricultural production and when energy costs rise, as they have done in recent months, they put farming and ranching operations all across the country at risk. Unfortunately, the provision now in the bill does not apply to dairy producers.

During consideration of this supplemental appropriations bill by the Full Appropriations Committee, I pointed out to my colleagues that dairy producers are suffering from high energy costs as are producers of crops. I ask the chairman of the Appropriations Committee, Senator Cochran, if he recalls the discussion we had on that topic at that time.

Mr. COCHRAN. Yes. I say to the Senator from Wisconsin that I do recall that discussion.

Mr. KOHL. It might be of interest to the chairman, and other Senators, to share some information I have received from the USDA Office of the Chief Economist on the question of how energy costs affect various types of farming operations. I asked the Chief Economist if he could provide the amounts that farmers pay for direct fuels costs, electricity, and indirect energy costs such as those associated with the production of fertilizer and chemicals. According to that office, using the most recent year for which these amounts are available, 2004, producers of so-called program crops, including wheat, corn, feed grains, rice, cotton oilseeds, and peanuts, paid a total of $9.9 billion for these sort of energy inputs. Of that total, corn had the highest energy costs with $4.9 billion. Cotton producers came in second at $1.7 billion. On the other hand, peanut producers paid $145 million for these same costs. The average energy cost for these seven different commodities, by commodity, was $707 million.

However, I would like to point out to my colleagues that the energy costs of dairy producers, as described by the USDA Office of the Chief Economist, was $2.2 billion. While dairy production was not the highest single commodity for energy costs, it did come in second and was three times greater than the average. While these costs were high in 2004, we all know what has happened, and is continuing to happen, to energy costs since then.

I know the budget constraints that we face with regard to the pending supplemental appropriations bill, and I am aware of the statement of President Bush in regard to his views on spending. However, I would like to ask the chairman of the Appropriations Committee for his views on this subject. I hope he would be willing to work with me in conference to ensure that in the event funds are provided for supplemental economic assistance in a manner similar to what is provided in the pending bill, that dairy producers will be able to participate in a program to help compensate for the high energy and other costs facing the agriculture sector.

Mr. COCHRAN. I thank the Senator from Wisconsin for expressing his concerns and for providing the specific information regarding the effect of energy costs on agriculture. The Senator is correct, we will be under tremendous pressure in conference to limit the amount of spending in this bill. We all know how important the farming economy is to this country and how badly farm income is being impaired by high energy costs. I would tell my friend from Wisconsin that I will work with him, and other Senators, to make sure that all farmers are treated fairly. The Senator's point about the costs affecting dairy producers, along with the others he mentioned, is well taken, and I hope an accommodation can be made to make sure all these farmers are treated equitably.

Mr. KOHL. I thank the chairman.

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