Volume 145, No. 82 covering the 1st Session of the 106th Congress (1999 - 2000) was published by the Congressional Record.
The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“YUMA AGRICULTURE FORUM” mentioning the Environmental Protection Agency was published in the Extensions of Remarks section on pages E1212-E1215 on June 10, 1999.
The publication is reproduced in full below:
YUMA AGRICULTURE FORUM
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HON. BOB SCHAFFER
of colorado
in the house of representatives
Thursday, June 10, 1999
Mr. SCHAFFER. Mr. Speaker, this spring I held a widely-attended agriculture forum in Yuma, Colorado to hear from a panel of citizens representing Colorado's agriculture industry. Panelists shared their thoughts regarding the worsening agriculture economy in America and provided valuable suggestions for improving the industry's chances for success.
Record-low commodity prices, disease and weather-related problems, coupled with declining export opportunities and a weak demand, have taken a devastating toll on America's agriculture industry. Farm income has fallen dramatically over the past two years and it is difficult to predict how soon it might rebound. While Congress recently helped stave off disaster in rural America with an emergency assistance package, it is quite evident serious long-term policy decisions must be implemented to ensure the lasting future of rural agriculture.
Upon returning to Washington, D.C. from Yuma, I shared this report with House Agriculture Committee Chairman Larry Combest, my colleagues on the House Agriculture Committee and other key Members of Congress in order to provide them with the valuable information and suggestions I received from my constituents. This information has already proven quite helpful in prioritizing the agricultural policy agenda for the 106th Congress and I have been asked to distribute it to all Members.
Therefore, Mr. Speaker, I hereby submit for the Record, the summarized comments and suggestions of Colorado's agriculture community.
dave frank, owner, mainstreet insurance
When Mainstreet Insurance first began issuing multi-peril insurance policies to producers, the 1985 farm program was in effect which mandated participating farmers own crop insurance to cover potential nominal and catastrophic losses. This policy of mandatory coverage was reinforced under the Freedom to Farm Act of 1995, which imposed additional restrictions and sanctions upon uninsured producers. This is good for agriculture, because it encourages sound risk management practices among producers and can help prevent the need for frequent taxpayer-funded government bailouts.
However, following a year of historically low commodity prices, natural disasters, and lost export opportunities due to a worsening economic crisis in Asia and eroding markets in Europe and Latin America, Congress in late 1998 found it necessary to provide nearly $6 billion in farm disaster and market loss assistance for American producers. Rather than provide higher relief payments to those producers who purchased crop insurance than to those who did not, Secretary Glickman provided the same level of relief to all qualifying producers. There is little incentive for some to invest in crop insurance if it is determined the government will step in and provide the same level of ``emergency'' assistance to all producers, regardless of coverage.
There are a number of ways to improve our current federal crop insurance program. First of all, the federal government should refrain from providing emergency or disaster relief to producers who signed non-insured waivers giving up their rights to any disaster payments. Much as an uninsured store-owner would not expect the government to take responsibility for his or her losses in the event of a fire, an equally uninsured farmer should not expect the government to cover losses stemming from another unforeseen disaster.
Secondly, the government should encourage higher levels of crop insurance coverage among producers. Currently, the Risk Management Agency (RMA) subsidizes the 50%, 55%, and 65% coverage level premiums at 32% of cost, while only subsidizing the 70% and 75% levels at 18% of cost. It is difficult to encourage farmers to move from the 65% to 70% coverage level if their indemnity will only increase a few dollars while their premiums almost double. Instead, the RMA should invert the subsidy schedule to encourage higher level of coverage. Many U.S. counties are now testing coverage plans up to 80% and 85%. The RMA should consider testing plans up to 90%, 95%, or even 100% of farmers' Actual Production History (APH).
The RMA also must become more customer service-oriented and more attentive to the changing needs of producers operating under a new, market-drive agriculture program. Crop production and crop practices have changed rapidly and dramatically since the 1995 Farm Bill. Many farmers are changing their rotations and planting different crops, while others are planting continuous crops. There are a number of clients who live in one county, yet their land extends over into the next county. In many cases, the RMA allows a crop to be insured in one but not the other. The land is the same, the crop is the same, and the farmer is the same, yet only part of the crop is allowed to be covered by crop insurance. Discrepancies such as these discourage sound management practices at the very time the government should be encouraging them.
RANDY WENGER, insurance agent, producer
One of the biggest problems clients encounter centers around the use of the Average Production History (APH). When farmers have three or four years of losses in a row, the APH suffers considerably. Furthermore, even though the APH is capped at 20 percent, producers are assessed a 5 percent surcharge in order to cap their policies, and therefore suffer twice.
The first way to improve the APH would be to eliminate the 5 percent surcharge. Secondly, the 20 percent cap on the APH should be removed. Thirdly, the APH should not be allowed to fall below the transitional year yields stated in the actuarials. Many companies are aggressively pursuing new and innovative policies for higher subsidies, but such policies are often quite costly to acquire.
It would also be very helpful to extend the insurance sales deadline past March 15th, possibly until April 15th or May 1st. Such an extension would allow uninsured producers, or those with policy caps, to sit down and discuss various policy options with insurance providers to determine the most appropriate and efficient plan.
ELENA METRO, Executive Director, Colorado Pork Producers
Agriculture producers are suffering considerably from overly-burdensome federal environmental regulations often based upon emotion rather than upon sound science. Furthermore, environmental regulations, whether based upon science or emotion, significantly drive up the price of agricultural goods. Consumers increasingly want goods which are convenient, nutritious, environmentally sound, and inexpensive. While it is certainly the consumers right to want these things, it is becoming more and more difficult, even with new technology and increased efficiency, to provide such products at the low prices consumers prefer. Burdensome regulations needlessly drive up production costs and subsequently consumer prices.
America must work ever harder to open foreign export markets for our producers and ensure free and fair trading policies at home and abroad. Not only is it vital to secure expanding overseas market-share for domestic goods, but we must also guarantee fair competition at home. Statistics show Americans are eating over four pounds of additional protein per year. Such an increase suggests more of this protein will be purchased from foreign producers, which in turn means we must assure fair import policies and a fair competitive environment for Colorado and U.S. producers.
Urban encroachment is another issue of major concern to farmers and ranchers and the future of agriculture. We are losing more and more agricultural land to development each year and in the process sacrificing valuable farmland which can never be reclaimed for production agriculture. As an illustration, there is a man who farms two miles away who had just finished spraying his wheat field for pests. The next day, he was walking on his land when he spotted two women riding horses through his property. ``Excuse me ma'am, but this is my land you are riding on,'' he said. ``But it's just a field,'' one of the riders replied. ``No,'' the farmer responded, ``I just sprayed chemicals on my crops yesterday which could be hazardous to your horses.'' One of the women spun her horse around to face him and said, ``Well, where do you expect us to ride then?'' The farmer replied, ``If you want to ride, then buy more land.''
This story represents a common occurrence, where farmers and ranchers, having kept to themselves and worked their land in an often secluded, rural environment for generations, are now experiencing encroachment from an ever-increasing population. Old homesteads are being replaced and surrounded by homes, businesses, shopping centers and apartment complexes. If such growth is not somehow managed, planned, or organized, the repercussions on the farming industry could be great.
For one thing, unemployed farmers and ranchers cannot simply walk across the street to find a new job like people who live in Denver. The loss of the hog industry to Eastern Colorado would create mass unemployment and economic depression. It would be similar to the loss of US West to Denver. Secondly, the reduction in domestic agricultural production would naturally lead to more reliance upon imported food. There is the possibility such products would not have the same high level of food safety expected of domestic products.
Larry Palser, Vice President, Colorado Wheat Administration
There are many reasons for the wide-spread discouragement among wheat producers today. U.S. producers are experiencing the lowest wheat prices in eight years, coupled with the largest stock since 1988. While acknowledging low prices can be attributed to the cyclical nature of commodity markets, we should also be working to turn the corner toward price improvement by selling and exporting more wheat. There are many reasons why export sales are not at the levels we would prefer to see, but the two primary areas include overall trade policy and sanctions reform.
One of the primary aims of the Freedom to Farm bill was increased market access for production. Over the past four years, wheat imports by six countries (Cuba, Iran, Iraq, Libya, North Korea, and Sudan) have more than doubled. Unfortunately, however, the United States has imposed strict trade sanctions prohibiting the export of U.S. agriculture products to every one of these countries. This represents approximately 15 percent of global demand for U.S. wheat exports and amounts to the largest self-imposed market-loss since the 1980 U.S.S.R. embargo. American farmers in 1998 harvested the largest supply of wheat this decade and now face the lowest levels of serviceable imports to account for the demand of the decade. This greatly contributes to the price-depressing carryovers we are currently experiencing. Access to these and other restricted markets is essential to the long-term success of the wheat industry.
Even with record-low prices for American wheat, foreign competitors are capable of undercutting U.S. prices through export subsidies such as those employed by the European Union. In addition, the Canadian and Australian Wheat Boards have utilized trade agreements to garner better tariff rates and higher wheat prices. The U.S. government should be fighting harder than ever to improve the competitive ability of domestic producers by strengthening our negotiating authority and securing more advantageous trade agreements. We should also level the playing field somewhat by fully utilizing the export enhancement programs, market development programs, PL480 and others to regain our rightful percentage of the world market. Finally, there should be in place a permanent mechanism to reimburse producers for market losses caused by U.S.-imposed sanctions and restrictions.
In regards to crop insurance, the other panelists are correct in their assessment we must do everything possible to strengthen and enhance risk management programs for producers. The federal funding mechanism should be inverted so that higher costing coverage policies have their premiums subsidized at a better rate. This would encourage producers to purchase higher coverage policies. Furthermore, if the United States moves away from federal disaster assistance programs, the crop insurance program and other risk management tools must provide adequate coverage at an economical price for producers.
STEVE THORN, Former Officer, Colorado Corn Growers Association
Trade sanctions and trade policy issues have already been mentioned by other panelists, but these are definitely very vital issues for producers today. With over 70 global economies off-limits to U.S. producers due to trade sanctions, farmers and ranchers are subsequently denied access to nearly 50% of the total world market. In the past it has been said that three out of every four bushels of corn will be used here in the United States, but that the price is tagged to the one bushel we sell overseas. Whatever the percentage is today going overseas, the prices we receive for our products are a whole lot less than they used to be. While U.S. producers are the most efficient coarse grain and feedstuff growers in the world, they are certainly not treated that way at home or abroad.
Part of the problem stems from the very nature of government-led farm programs. Once legislation is drafted, debated by committees, and voted on by the entire Congress, it ends up under the authority of unelected bureaucrats with little or no accountability to the producers they are charged with serving. The legislative proposal that once sounded so simple and helpful ends up as a convoluted mess by the time it works its way to the implementation stage. Most of the expenditures do not end up going where they were intended to go and policies rarely turn out right when implemented by the agencies. County Farm Service Agency (FSA) representatives, for instance, have had to postpone appointments for weeks sometimes because of delays in receiving proper information and support from the USDA.
It is very important to provide producers with a strong and viable safety net, but whatever policy is enacted must be clearly delineated for agency follow-through and must allow for significant Congressional oversight. Lawmakers are capable of crafting successful legislation, but if it gets passed off to bureaucrats with little care or understanding of the original intent of the bill then it simply turns into another worthless piece of paper.
In addition, while Congress by nature must establish rules, regulations, laws and initiatives which apply to the entire country, there needs to be an understanding that what is right for Iowa is not necessarily right for northeast Colorado. Planting and harvesting times are different as are decisions regarding financial planning and insurance coverage. Colorado producers must be taken into consideration along with the rest of the country when deadlines are determined.
Finally, it is important to enact Fast Track trade negotiating authority for the president in order to ensure clean, effective trade negotiations and to help secure fair trade agreements for American producers. The North American Free Trade Agreement (NAFTA) sounded good on the surface, but there are several aspects which have turned out to be different than anticipated. The Mexican government, for instance, has not been importing dry beans at the level they said they were going to import. Not only that, but they have set up a permit system to restrict the level of imports and have not even been taking delivery on the beans for which they purchased the permits. Dry beans may store for longer periods of time than some wheat and some corn, and certainly longer than pork and beef, but they will not store forever. Facing such restrictions and uncertainties is harmful to American producers.
ROGER HICKERT, President, Colorado Livestock Association
Cattle prices historically run in ten-year cycles. The last ten years, however, between natural occurrences and various issues within the industry, have brought significant changes to those cycles. In the early 1990's, specifically the winter of 1992, the industry saw big losses in the feeding industry along the high plains of the Texas Panhandle, Oklahoma, and Southwest Kansas. This resulted in a gap in the market and extremely high prices in 1993. As soon as the inventory was there, however, the market immediately corrected itself and that created extreme lows and major losses for the industry. Those losses now have extended for approximately five years and have been stretched out somewhat by the concentration in the industry. This concentration appears to have extended to the feeding industry as well as the packing industry and has created a whole new business atmosphere with different players and different reporting practices.
The National Cattlemen's Beef Association (NCBA) in its last convention moved to support mandatory price reporting of all live sales. This issue is a two-edged sword because not only would the high prices being eliminated need to be reported, but so would the unreported low prices. Most producers probably would not come in and say ``well, I sold cattle today for $0.58 even though the price is $0.62.'' Those are going to show up and probably change the average, so again, it is a two-edged sword. But it would help to determine what the good cattle are selling for.
Many of the problems faced by the industry, particularly the equity loss incurred over the past twelve months, have been some of the most tremendous ever faced by the feeding industry. Much of it can be attributed to indications the cattle industry was at a bullish point in the cycle and many in the industry moved away from risk management and dropped positions on the futures board. For many big companies, like Coke Industries, the loss was just too extreme to stay in the feeding business.
Another issue is the movement toward more alliances. Producer, feeder, and packer alliances are beginning to become the branded product, and as the industry moves toward branded products, producers and feeders will have to be very careful which brand or alliance they get into. Dr. Gary Smith of Colorado State University (CSU) suggests that in the next five years, those not involved in an alliance will probably not be here in the next five years, and that choosing an alliance will probably be the most important decision they make within that time period.
A significant concern for the industry right now is the European Union (EU) hormone ban on beef, particularly since exports account for 10 percent of the industry's business. This ban is nothing more than a trade barrier because there is no scientific evidence anything is wrong with the meat. It is simply a way to deny market-share to U.S. producers. The American beef producer can compete with anybody in the world on a level playing field, but they cannot compete against Canadian producers who benefit from heavy grain subsidies and can feed cattle for half the price. It is not fair that Canadian producers benefit from this subsidy and then haul their live cattle to local areas to be slaughtered and stamped by the USDA.
While the Colorado Livestock Association has officially taken a neutral stance on the country-of-origin labeling issue, it is certainly one with which the industry must contend. There are many in and out of the industry calling for such labeling, but such a policy, if enacted, could work both ways for the U.S. industry. The more informed consumer, it is believed, will prefer to purchase U.S. beef, which is widely considered to be the best and cheapest product available in the world. But there are some among the public who may decide for whatever reason to purchase Australian or Argentinean grass-fed beef instead.
Congress must also work to pressure federal agencies to cut down on unnecessary regulatory burdens. Environmental regulations from the Environmental Protection Agency, in particular, have grown ever more restrictive and significantly cut into agriculture profits. The industry is working hard to stay ahead of the regulations, but many smaller feed lots find it very difficult to afford the
$15,000 to $20,000 just to keep up with the environmental regulations.
JERRY SONNENBERG, Colorado Farm Bureau
It is important any environmental regulations promulgated by the EPA be based upon sound science. These regulatory burdens do cost a lot of money and do cut down on profitability and productivity, but if they are deemed to be absolutely necessary, they must work for everybody and be backed by sound science.
Country-of-origin labeling is an important policy to implement. There are some who may prefer Australian or Argentinean beef, but the fact is most consumers believe American producers raise the best and safest commodities and food in the world and we should be confident and proud to put our name on it.
It is imperative the United States works to open foreign markets. As mentioned earlier, the more than 70 countries currently sanctioned by the U.S. government represents a significant market for the U.S. agriculture industry. Agriculture generally takes the brunt of most imposed sanctions, and when U.S. products are denied access to a market, another exporting country will supply the product in our place.
We must not eliminate and sanction foreign markets at a time when world population is forecast to increase, and possibly double, within the next 50 to 60 years. The United States has a surplus of agricultural products, yet 25 percent of the world is considered to be under-nourished. The U.S. must find ways to deliver its goods to that 25 percent, whether through the utilization of the Export Enhancement Program (EEP) or through other means.
The Endangered Species Act (ESA) has really tied the hands of American producers domestically through its use of ambiguous and disputable policies and restrictions. In particular, the designation and regulation of potential Preble's Meadow Jumping Mouse habitat land has not been based upon known facts or sound science. For example, at the same time the Fish and Wildlife Service documents the mouse never strays beyond 150 feet from waterways, the EPA is calling for a 300-foot buffer. The EPA's regulation simply does not correspond with the known facts and science as documented by the agency with jurisdiction over the issue. The burden of proof must lie with the federal government in proving beyond a doubt the presence of this species, in addition to documented proof it is in fact threatened, before imposing burdensome regulations on America's farmers and ranchers.
RON OHLSON, Director, Yuma County Farm Service Agency (FSA)
The role of the Farm Service Agency (FSA) is to work face to face with local producers and help them utilize available programs and tools. When assisting with programs such as the Crop Loss Disaster Assistance Program, the fewer levels of bureaucracy the program must pass through on the way to the producer, the better. This program, for instance, looks nothing like the plan originally passed by the Congress because of all the bureaucracy. There should be some way for local FSA representatives to make minor policy changes and avoid duplication with other agencies in order to better serve producers. Over the past seven or eight years there has also been a deterioration in the grass-roots nature of coordination and assistance. Now, local control is increasingly considered to be an area, state, or regional office. This assistance must continue to be administered by those who know the producers and their needs best.
While a number of farm programs are supposed to be phased out under the Farm Bill, agency staff is being reduced faster than the programs they are expected to administer. Ongoing programs are difficult to maintain, particularly when insufficient staff is available to administer and implement the large, ad-hoc programs that develop quickly and unexpectedly like this Crop Loss Disaster Assistance Program. County offices must be given the time and ability to implement the programs correctly and efficiently the first time. The implementation software for this particular program, for instance, did not arrive from Washington, D.C. in a timely manner and it made things very difficult.
It is getting to the point that many offices do not know how they are going to handle the high workload. The counties of Eastern Colorado have among the largest workload around. The seven counties in this district have a higher workload than Utah and Nevada. Large programs and tasks are delivered to the understaffed offices as priority items but none of their other projects can be set aside or delayed. The level of paperwork is immense too--it might be helpful to revisit the Paperwork Reduction Act to determine if it is being fully implemented.
Many producers in this area are also very concerned about the Kyoto treaty. This treaty, if approved and implemented, will have a severe impact on the agriculture industry, which is expected to shoulder a large share of the burden.
deb nichols, executive administrator, irrigation research foundation
The Irrigation Research Foundation is a privately owned, non-profit, independent research and demonstration site. It is the only research station focusing on irrigation and is located over the Ogallala Aquifer. The primary purpose is to find ways to make production more economical and to demonstrate wise water use.
Earlier this decade, a group of local producers wanted to see studies useful to their own production and throughout the region. It was important to know what populations to plan, ways to work with soil compaction to produce better yields, different options for setting up variety trials, how to make more of a profit, and a way to see all of the different companies side-by-side to inspect their premier varieties. Ed and Jessie Troutman purchased a quarter of land north of Yuma in January 1994 from the Dekalb Seed Company and established the Irrigation Research Foundation. Today, the foundation has a board made up of diversified, farm-oriented individuals, both retired and working, who represent the banking industry, the insurance industry, dairy associations, cattle producers, commercial fertilizer sales people, and individuals from the University Cooperative Extension.
Some of the crops raised in 1998 were corn, wheat, sunflowers, soybeans, pinto beans, milo, sugar beets, millet, canola, field peas, and cotton. There is a silage plot, Iowa corn, transgenetic corn resistant to specific insects, a corn population study, herbicide-resistant corn, and the premier corn study is the water and nutrient management study.
The Irrigation Research Foundation works with Dr. Maudie L. Casey, a water specialist from Colorado State University
(CSU), on a study which looks at variable fertilizer rates, population levels, and irrigation rates. This study is designed to determine the optimum which will produce the greatest profit, not necessarily the greatest yield.
In 1998, the foundation acquired a 5-year lease of dry land from the City of Yuma. While the primary focus of the Irrigation Research Foundation is on water, dry land research is also very important to many members. Evolving technology has presented new ways to manage dry land. The foundation is demonstrating ways to use continual cropping with various rotations to not only produce an annual yield, but also to at the same time preserve the soil, reduce wind erosion, and help wildlife.
The Irrigation Research Foundation also provides various forms of public service to the community. The foundation is currently arranging to hold several classes for the community through Morgan Community College, there are sugar beet planter test days where producers can have their equipment tested free of cost, training is available for commercial applicators and emergency personnel in the handling of hazardous products, such as fertilizers, chemicals, pesticides, and herbicides. The foundation also produces for the public an informative annual report and holds several field days throughout the year. Wheat field days are held in June, sugar beet days are held in September, and the premier show is the Farm Show held in August which allows affiliated companies to showcase their products, provides an opportunity for producers to learn about the foundation's studies, and presents an opportunity for many individuals in the industry to interact with one another.
Ross Tuell, Member, Yuma County Economic Development Committee
The Yuma County Economic Development Committee is funded by the County of Yuma and the two cities of Yuma and Wray. The committee focuses primarily on retaining and expanding existing businesses by serving as an information service, helping write business plans, locate funding sources, and complete documents and forms. The committee also looks to add value to existing operations and add new businesses to the community. The most important effort is keeping producers on the farm, otherwise we lose them and the stores in town that serve them. One challenge is balancing the positives and negatives of expanding economic growth. The bigger the farms get, which they presently are, the larger the pieces of equipment they require, which means fewer implement dealers, fewer employees, and fewer businesses in town.
From a producer's standpoint, the policies that would help agriculture the most are those which would expand markets and reduce burdensome regulations and expenses. Specifically, the Congress and the president should work to enact Fast Track trade negotiating authority, eliminate the death tax, cut capital gains taxes, and lower the marginal income tax rate.
While some opposed to cutting capital gains taxes and the death tax claim it benefits only the extraordinarily rich in the country, it is simply not the case. The extremely wealthy do not worry much about these taxes. If they have something they want to sell or bequeath, they are going to do it anyway and the tax is not going to affect them much. But family farms are different. Families must sell the farm just to pay the taxes and then nothing is left.
Furthermore, as mentioned earlier in the forum, the U.S. must revise its policy regarding the sanctions currently imposed on over 70 countries. As Dr. Barry Flinsbaugh from Kansas State University (KSU) has stated, if the U.S. is going to continue using food as a weapon, we ought to change the way we do it. Instead of holding it back, we should simply give it to them. We are not fighting the people who are starving, we are fighting governments, and the governments do not care that the people are starving, which is why we have human rights concerns in the first place. It is much easier to throw forty metric tons of wheat at them than it is to throw a million-dollar piece of electronic hardware at them.
Dave Thomas, Yuma County Commissioner
Commissioner Thomas addressed his comments to me. He said,
``Congressman, I would like to thank you for coming to Yuma County and for being our voice in Washington because we have a lot of concerns here today. I know you will carry those forward. All of the concerns mentioned today affect Eastern Colorado and I know you will be our voice.''
Cindy Hickert, Former Washington County Commissioner
While not a resident of Yuma County, Commissioner Hickert does conduct business here. For one reason or another, the Environmental Protection Agency (EPA) has been exerting more pressure on the Health Department to develop more of a paper trail. It should really be more important to get things done correctly than to concentrate more staff on creating a paper trail. As was mentioned earlier in the forum, any new regulations and restrictions must be based upon sound science.
Mr. Speaker, I would like to close by thanking all of the participants for their input. Mr. Tim Stulp moderated the forum and did an outstanding job of drawing many helpful thoughts and comments from our expert panel of speakers. I might also point out Mr. Speaker, that mid-way through the forum, Mr. Combest of Texas addressed the crowd, by telephone and loudspeaker, and assured Colorado producers of efforts in the House to strengthen America's agriculture economy.
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