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Public Statements

Farm, Nutrition, And Bioenergy Act Of 2007

Floor Speech

Location: Washington, DC

FARM, NUTRITION, AND BIOENERGY ACT OF 2007 -- (House of Representatives - July 27, 2007)


Mr. COOPER. Mr. Chairman, everyone should be able to support the upcoming Cooper amendment, whether you're for or against the farm bill. It really doesn't make any difference because my amendment doesn't affect 99 percent of what's in the farm bill, but it does affect 1 percent.

And what is that? It's called the crop insurance industry, a little known curious part of the insurance world that is completely dominated by 16 fabulously rich companies. These companies, at taxpayer expense, made $2.8 billion in profits, underwriting gains, in the last 5 years. I don't begrudge anyone big profits out in the real world; but when it's at taxpayer subsidy expense, I get a little worried.

So what my amendment would do is two things. Number one, it would reform that industry and reform it in the way that the U.S. Department of Agriculture has recommended, and I'm proud that they strongly support my amendment.

But it also does something else, and we only found this out yesterday, and this is very important because it could well not only save the bill, it could save the reputation of many of our colleagues in the House because there is a provision in the bill today that I'm sure was unintended. I have no idea how it got in there, how it found a place on page 668 of the bill. It just happens to enrich forever these 16 crop insurance companies.

Now, what does that little slender provision do which the Bush administration has already said allows them to collude to raise prices for consumers and the government? That little provision allows them an antitrust exemption, an antitrust exemption that, of course, was never referred to the Judiciary Committee. No one on the Judiciary Committee knows about it. I haven't found anybody on the Agriculture Committee who knew about it, but it's a long-sought goal of the crop insurance industry so that they can collude to price-fix, to bid-rig in their negotiations with the government so they can get even more subsidies, because apparently $2.8 billion in profits in the last 5 years was not enough.

So my amendment is the only way to cut out that provision. Unless some of our colleagues are not attuned to antitrust laws, these antitrust obligations are not just wrong. Talking in contract negotiations is supposed to be an open-bidding process, a real free market competition. This sort of behavior is not just wrong; it is criminal, criminal.

So unintentionally and apparently unbeknownst to most folks on the committee, we are giving them a license to conduct what would otherwise be criminal antitrust behavior. This is wrong. This is so wrong it should not be part of any of this bill, and I am sure that no one intended it, although it just happens to benefit these 16 companies.

Now, these are not bad people who work for these companies; but it's a rotten system, and it doesn't need to be destroyed, but it does need to be reformed; and we need to follow the guidelines of the Bush administration in reforming it because I haven't found anybody else who's willing to take on this task.

But surely this can bring us together in a bipartisan fashion to cure this flaw in the bill.


Mr. COOPER. Mr. Chairman, the gentleman who just spoke knows that we discussed this precise matter at dinner last night. He was not caught unawares at all. We discussed it at some length at dinner.

Second, it is the prerogative of any Member of this House to defend the honor of this institution. I am personally extremely disappointed that our provision allowing what would otherwise be antitrust violation, wrongful, possibly criminal behavior, would be allowed to be inserted in this bill, apparently without the knowledge of anyone on the committee, certainly not of anyone on the Judiciary Committee.

I regret his objection. But my intention is clear. We need to reform crop insurance in America. I only found out about this issue, as the gentleman said correctly, because I am fortunate enough to be a member of the Government Reform Committee.

Under the hearings led by Henry Waxman, we did more to uncover abuse in this area than the Agriculture Committee ever did. In fact, when I attended the agriculture hearing, only four members of that committee were present to hear the government witnesses to describe the ongoing abuse in the crop insurance industry, witnesses from the GAO and USDA IG.

This is important information that every Member of the House deserves to have, because we should not be party to handing out free antitrust exemptions without anybody knowing about it.


Mr. COOPER. I have the highest respect for the gentleman and for all the members of the Agriculture Committee. I am sure this was not intentional. That's why I am trying to correct the problem.

When I looked into it, 84 percent of the savings that are in the agriculture bill from crop insurance happened only in year 5. Nothing happens in year 1, 2, 3, 4. Year 5 is the year in which the next agriculture bill will be drafted. It's very unlikely that those cuts will ever occur, when 84 percent of them are back-loaded in year 5. So that was my concern about those cuts.

But the larger provision, allowing these collusive discussions and negotiations with the government, surely the gentleman is disturbed by those.


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