Saxby Chambliss

Mr. CHAMBLISS

Mr. CHAMBLISS. I ask unanimous consent that the order for the quorum call be rescinded.

Mr. CHAMBLISS. Mr. President, I yield to the Senator from Kansas, Mr. Roberts, 15 minutes, followed by Senator Grassley for up to 5 minutes.

Mr. CHAMBLISS. I ask for the yeas and nays.

Mr. CHAMBLISS. Mr. President, I rise today in opposition to this amendment. I, too, have great deference to those folks who till the soil and produce products that we all enjoy as consumers from an agricultural perspective. I am not a farmer, but I am a lawyer. I have read laws all my life. Frankly, all you have to do is read this amendment to realize that the amendment would prevent businesses from using legitimate business justifications as a defense against claims of unlawful practices under the Packers and Stockyards Act. I would simply go to the first page, section 2, where it says on page 1232 that we are going to strike the clause regardless of any business justification. This clearly is a determination that should be left to the discretion of the U.S. courts and not summarily decided in advance by Congress. A business should be able to offer as a defense that their actions were done legitimately as a means of conducting business. The court has the option to examine this defense and gauge it against those practices deemed unlawful under the Packers and Stockyards Act. If a producer believes a packer has conspired to create a monopoly, he has a right to sue that packer. What if the packer's decision was made not as an effort to create a monopoly but as an effort to secure higher quality cattle from a consistent supplier? The courts simply must have the discretion to make this determination. Including language in the Packers and Stockyards Act that enumerates unlawful practices and adds the phrase ``regardless of any alleged business justification'' is simply prejudicial against American businesses. I am sympathetic to producers who are concerned about their evolving role in the livestock marketplace, but this amendment is overreaching and will inject uncertainty into legitimate business decisions. Let's not attempt to stack the deck on behalf of one party over another. We should allow the courts all due discretion in determining if the actions of American businesses are justified under the Packers and Stockyards Act. I urge my colleagues to vote against this amendment. Mr. President, I am happy to yield to the Senator from Kansas, Mr. Brownback.

Mr. CHAMBLISS. Mr. President, these organizations recognize the importance of a solid crop insurance program, and in the letter they state: Without a crop insurance safety net that is fairly and effectively available, many family farms will not be able to rent land and obtain credit to produce a crop. They express concern that changes proposed by Senator Brown will cause unintended harm to the availability and delivery of this vital farm security program. With that, I urge a vote against the Brown amendment. I yield back our remaining time.

Mr. CHAMBLISS. Madam President, there was an understanding that Senator Grassley would be recognized for up to 5 minutes following Senator Roberts.

Mr. CHAMBLISS. Did that include the additional 3 minutes we got?

Mr. CHAMBLISS

Mr. CHAMBLISS. OK.

Mr. CHAMBLISS. Madam President, I rise in opposition to the Klobuchar amendment. Let me say first that I am disheartened that farm program critics continue to try to lead the general public and our elected officials into believing that there is a vast army of farm program participants who are receiving benefits to which they are not entitled. Stories about people living on the east and west coasts and everywhere in- between receiving program benefits continue to make the headlines. They are used as the poster children of those who do, but should not receive farm program benefits because they are wealthy landowners or millionaires, but more often than not there is no explanation or concrete definition of either. Home prices have spiraled over the last decade and many families have homes, usually their single largest asset, worth hundreds of thousands of dollars. Individuals receiving farm program benefits obviously have an interest in an agricultural holding somewhere in the country. Hopefully, they also have a 401(k) or some other savings plan that will allow them to retire one day. More often than not, the type of individual I just described is not a wealthy landowner. They have a home, a farm--which by the way, they might have inherited--and hopefully a retirement plan. They also have jobs and use the income to pay their mortgage, purchase a vehicle, raise their family, and save for college and every other imaginable cost associated with living. Most of the people I know in these situations don't consider themselves wealthy. Most of them will tell you that the adjusted gross income at the bottom of page 1 on their IRS form 1040 doesn't reflect what they would consider to be a wealthy landowner. Another class of individuals that draws a lot of attention is millionaires. It is pretty hard to figure out who those individuals are unless you are their accountant. More importantly, I would hope that we all know there is a significant difference between having a million dollars in assets and having an annual income in the millions. In the vast majority of cases, most individuals receiving farm program benefits do not have anywhere near a million dollars in assets or income. But as I will point out momentarily, it is not about wealthy landowners and millionaires receiving program benefits, it is really about farmers in general, regardless of their economic situation, receiving program benefits. Let me back up for a moment, and provide some historical context to where we find ourselves today. Prior to the 2002 farm bill there had never been an income test with respect to the eligibility of individuals and entities to receive program benefits. Congress acknowledged those concerns and addressed adjusted gross income--AGI-- in the 2002 farm bill. Beginning with the 2003 crop year, any individual or legal entity with an AGI of $2.5 million or more for the 3 prior years was not eligible to receive farm program benefits, unless at least 75 percent of their income came from farming, ranching and forestry operations. We believed that was a good first step and recognized that when it came time to write a new farm bill, as with any provision, we would take another look to see if the limits were appropriate. The ink was hardly dry on the 2002 farm bill when the ``reformists'' started shouting once again that individuals and entities otherwise eligible for farm program benefits shouldn't receive farm program assistance because they were millionaires or wealthy landowners. The bill passed by the Senate Committee on Agriculture, Nutrition and Forestry took a positive step to address the issues surrounding AGI. The Committee adopted an AGI provision that reduced the limit to $1 million dollars in 2009, and to $750,000 in 2010 and beyond, unless at least two- thirds of a person's income came from farming, ranching and forestry. The reform minded AGI provisions adopted by the committee directly answered the calls to ensure that payments don't go to millionaires. We didn't go to $750,000 in the first year--not a reflection of resistance to change, but rather, recognition that land lease arrangements have already occurred with respect to the 2008 crop payment year because here we are in December of 2007, with farmers and ranchers all across America already in the final stages of planning for their 2008 crop year. In some instances--for example winter wheat--they have already got seed in the ground for the 2008 crop year. In the 2002 farm bill we added a provision referred to as ``tracking of benefits''. This provision required the Secretary to attribute all payments to an individual, a partnership, or another legal entity back to a natural person or what some referred to as a ``warm body.'' The intent of this provision was to provide transparency and allow the agricultural community, general public, media and other interested parties to trace benefits paid to entities, partnerships, et cetera, back to a ``warm body''. During the committee markup, Senator Klobuchar said she wanted to stop millionaires from receiving payments. She mentioned the names of several persons that had received payments with the obvious reference to laws that needed to be revamped. That might be true if you are referring to the 2002 farm bill, but not when compared to the provisions adopted by the committee to keep these individuals from receiving payments. I am pleased that there is acknowledgment that the tracking of benefits provision worked as it was intended, as it is obvious she and her staff have researched a certain database Web site that is accessible to the general public. I am equally pleased that the adjusted gross income provision that was included in 2002 also worked as intended. What I am not pleased about is the mischaracterization that people who are no longer eligible for payments because of the provisions contained in the 2002 farm bill are somehow skirting the system and still receiving payments. One name that frequently comes up is Scottie Pippen, whom we all know to be an outstanding NBA basketball player. When you look through a certain Web site database you will notice that Mr. Pippen received Conservation Reserve Program payments, CRP as it is commonly referred to, for the 2003 through 2005 program years through an entity named Olympic Land Company Incorporated. USDA tells me that Scottie Pippen owns 100 percent of Olympic Land Company Inc. Olympic Land Company purchased a farm in 2003 that had an existing CRP contract. Because the contract was in existence prior to the 2002 farm bill, the new AGI limits did not apply. The CRP contract expired on September 30, 2005 and Olympic Land Inc. did not enter into a new contract with the 2002 farm bill AGI provisions obviously playing a role in the decision. Another name used frequently is Ted Turner, who has extensive agricultural holdings in Montana, New Mexico and other States. Mr. Turner bought property in Stanley County, SD, that had several CRP contracts initiated prior to the 2002 farm bill AGI limitations becoming law. Once again because these were multiyear contracts and entered into prior to the 2002 act, AGI provisions did not apply to Mr. Turner until the contracts expired. These contracts expired on September 30, 2007, and Ted Turner did not enter into a new contract with the AGI provisions obviously playing a role in that decision. I believe these are just two of many examples where the AGI provisions contained in the 2002 farm bill worked as intended, and what we have done in this bill is reduce that limit by an additional 70 percent. There isn't anyone who can stand before this body today and say that a 70-percent reduction in the AGI test is not real reform. Landowners and producers often jointly share in the risk and production of the crop in a manner that is normal and customary for the area. When the landowner shares in the production risk, by covering costs such as fertilizer or harvesting, the producer benefits from: No. 1, reduced risk in producing the crop, No. 2, reduced capital requirements, and No. 3, a landowner's greater general appreciation of the operation. I can tell you what is going to happen as we continue to lower the AGI and it is very simple. Landowners intend to capture a return on their assets and unless there are special circumstances, the landowner is going to change from a share lease to a cash lease. Instead of participating in the risk of producing the crop this policy will shift all of the production risk and input costs onto the back of the producer. The landowner will cash lease the land and walk away with a guaranteed lease payment and the producer comes away from the deal with higher production costs and more risk. Do we really want to make it more difficult for the folks who are actually out there getting dirt under their fingernails, driving the tractor and caring for the land? I want to repeat again what I said earlier, this debate is not about wealthy landowners and millionaires receiving program benefits. It is really about farmers in general, regardless of their economic situation, receiving program benefits. A few short months ago the debate was about making payments to millionaires and now we are at $750,000 and people want to go even further. This amendment is actually an assault on everyday farmers; but is disguised as an assault on wealthy landowners and millionaires. I am urging my colleagues to vote no on the Klobuchar amendment. I reserve the remainder of my time.

Mr. CHAMBLISS

Mr. CHAMBLISS. Mr. President, reserving the right to object, if I could ask the distinguished majority leader to add the other unanimous consent request we have agreed to.

Mr. CHAMBLISS. I yield to the Senator from Louisiana, Ms. Landrieu, 5 minutes.

Mr. CHAMBLISS. I yield 15 minutes to the Senator from Arkansas, Mrs. Lincoln.

Mr. CHAMBLISS. Earlier, I asked unanimous consent to include the Gregg amendment to be voted on following the two Alexander amendments. In my request, I asked for 15 minutes of debate equally divided. I now ask unanimous consent that 15 minutes be withdrawn.

Mr. CHAMBLISS. I yield 5 minutes to my colleague from Georgia, Senator Isakson.

Mr. CHAMBLISS. Madam President, how much time remains on our side?

Mr. CHAMBLISS. Senator Grassley said a little earlier that the payment limit provision increased the land prices or contributed to the increase in land prices in his State. I simply say that I understand they have risen 64 percent from 2000. I remember very well, in 2002, when we were drafting the farm bill, the price of corn was $1.90 a bushel. Today, the price is $3.16 a bushel in Iowa, and in Texas it is about $3.85 a bushel. It is pretty easy to see why the price of land in the midwestern part of the United States increased. It has nothing to do with payment limits and everything to do with crops. By contrast, in the mid-1950s, cotton was selling at 55 cents a pound. Today, a pound of cotton is selling somewhere in the range of 62 cents, and it is up. That is a pretty drastic contrast. My colleagues have said it is their position that farmers simply get too much money, and we need to cap payments. I think it is interesting to note that we tried to put a cap on conservation payments, and we were stymied from doing it in the committee. There is nothing in the Grassley-Dorgan amendment to put any payment limit on the conservation payments that are made. The conservation payments that are made, I daresay, are virtually all of the payments to which the Senator from North Dakota referred. I urge colleagues to vote no on this amendment.

Mr. CHAMBLISS. Mr. President, I thank my colleagues from Louisiana, Alabama, Arkansas, and Georgia for stepping up and making a lot of common sense in their comments. All of us are appreciative of the work Senator Dorgan and Senator Grassley have done over the years in this body. They have both been very supportive of agriculture. I particularly am appreciative of that as the ranking member of the Senate Agriculture Committee. I have been to Iowa. I know the kind of farming they do there. It is different from the way we farm Georgia. I have been to North Dakota. I have seen the way their farms operate in North Dakota. It is different from the way we operate in the Southeast. There are reasons why policies have to be different for different sections of the country. I wish to talk for a minute about this claim that all these farmers getting payments are big farmers. The proponents of the Dorgan-Grassley amendment claim that 10 percent of the farmers are getting 70 to 80 percent of the program payments. They characterize these farmers as megafarmers and corporate farmers. Both Senator Grassley and Senator Dorgan talk about megafarmers and corporate farmers as opposed to family farmers they want to assist with farm programs. I wish to explain that the farmers in the States of all my colleagues fall within this 10-percent category, and they are ordinary farmers with average size operations. They have families to support, and they are a vital component of rural communities. Most of all, those 10 percent feed this country. I wish to make it clear, particularly to those who are considering supporting Dorgan-Grassley, why an overwhelming majority of the farmers in your State would fit within the category of being in the top 10 percent of payment recipients. In order to compare apples to apples, I asked USDA to provide me with the attribution data for the 2005 direct payments. I asked for the data in an attributable form because I wanted the information to reflect what the universe of payees would look like based upon the committee-supported bill which requires direct attribution. The data from USDA is pretty interesting. It provides clarity as to the size of farming operations that comprise the top recipients. In 2005, if a farmer received 1 penny more than $10,000 in direct payments, they would have been considered to fit within the largest 12 percent of producer recipients, exactly the category Senator Grassley referred to. Some of you might ask: How many acres does a farmer have to farm to reach $10,000? Critics consider them to be megafarmers, but the facts do not support this claim and here is why. According to the USDA attribution data, direct payments average $23.02 per acre nationally, which means if a farmer has 511 base acres, they reach the $10,000 level. Now, I will be honest with you. Maybe it is a good bit different in the Southeast from the way it is in the Midwest. But if you try to farm 500 acres in the Southeast and feed a family of four, you simply cannot do it. In areas where covered commodities are produced, there are few farmers who would consider themselves anything but a small farmer with this amount of acreage. Yet the critics are not interested in telling you these small farmers fit within the category Senator Grassley referenced on the floor recently, when he claimed we have 10 percent of the large farmers in America getting 70 percent to 80 percent of all the money. To better understand how so many typical farmers fall within this small percentage of payment beneficiaries, you must understand the entire universe of program participants. If one operator rents seven separate tracts from seven separate landowners, on a 75 percent-25 percent crop share arrangement, we end up with eight individuals receiving program benefits--one operator and seven landowners. Each of these eight individuals counts as a program recipient. But since the operator is on a 75-25 percent crop share arrangement, he or she ends up with 75 percent of the acres and production, while all seven landowners account for 25 percent of the acres and production on their respective farm. Or another way to look at it, the individual operator accounts for 75 percent of the program payments but only 12 percent of the universe of individuals represented in that scenario. I fail to see why this is being represented as inappropriate or unfair. It is only logical that the operator, as a program recipient, who accounts for 75 percent of the acres and production, receives more than any of the other seven individual landowners, who each account for only 25 percent of the acres and production on their respective farm. This simply reflects the one individual operator receives payments in a higher proportion than the other seven individuals due to his level of production and risk. Now, there has been conversation and statements made tonight about the fact we did not make real reforms. Let me tell you where the heart of the difference is between the Grassley-Dorgan proposal and the underlying bill. The heart of the difference is in what we call the definition of an ``actively engaged farmer.'' Under current law and under the language in the base bill, individuals or entities must furnish a significant contribution of capital or equipment or land and personal labor or active personal management in order to be actively engaged in farming. So a farmer who qualifies for payments must put at risk money, he must furnish land, he must furnish equipment or he has to be directly involved in the management of the operation. Under the Grassley-Dorgan amendment, that definition is changed so that for an individual to be considered actively engaged in farming, they must furnish a significant contribution of capital or equipment or land and personal labor and active personal management. So what that means is any young farmer--as Senator Grassley referred to--who has a difficult time getting into the farming business, if he wants to come in and start farming, that young farmer, in order to qualify for payments--remember, this is the person who is going to be out there driving the tractor; this is the person who is going to be getting dirt under his or her fingernails--they have to come up with money, they have to come up with equipment or he has to come up with land, and he has to be the guy who is making all the decisions on the ground out there. He cannot have anybody helping him with it, so to speak, who gets payments that help that young man along. Which young farmer in America today can step right out of school, step right out of high school or college, for that matter, who has the ability to come up with capital, who can come up with the $250,000 combine, who can come up with a $150,000 tractor, who can come up with even a used planter that is going to cost several thousand dollars? Who has the ability to do that? Well, the arrangement we have that is available to a young farmer under the base bill and under current law is that when a young man or a young woman wants to get involved in farming--a lot of the time it is with their family, sometimes it is without--they have the ability now to enter into a crop share or a landlord-tenant arrangement with a landowner who oftentimes is in the retiring years of wanting to slow down his farming operation or maybe completely get out of it and let someone else get into it. But if he has land, he has equipment he is willing to put into a partnership, a landlord-tenant arrangement, then that young farmer has an opportunity today he simply would not have if the Dorgan-Grassley amendment passes. It is pure and simple. So when we say we are going to be taking care of young farmers by putting a $250,000 cap on the payment limits any farmer can receive and, thereby, we are going to allow young farmers to come into an agricultural operation, we are kidding ourselves, and we are not being straightforward because that simply is not giving that young farmer any additional advantage. Now, there has been conversation about abuses of the program and that a lot of people who are not farmers--who may live in Los Angeles or may live in Washington or may live in New York--are getting payments. That is true. This is my third farm bill. I have tried in every farm bill to try to make sure that young man whom we talked about who is getting dirt under his fingernails, whether it is a young farmer or an older farmer, is the one who gets the benefit--I emphasize that, the benefit--of these safety net programs. We have sought to do that again. We have modified the language in this bill. For example, Senator Dorgan has referred to what we commonly call the ``cowboy starter kit,'' where we have base acres on a piece of farmland that all of a sudden is turned into a subdivision or into a development of some sort, and payments are made on those base acres. Well, we have taken those base acres out of eligibility for farm payments with language we have directly put into the bill because what we say is that in order for base acres to qualify, a farmer has ``to use the land on the farm, in a quantity equal to the attributable base acres for the farm and any base acres for peanuts for the farm under part III, for an agricultural or conserving use, and not for a nonagricultural commercial, industrial, or residential use. . . .'' So when we talk about the ability of somebody to own base acres and to take that land and develop it or maybe carve a 10-acre tract out of there and still get payments on those base acres, you are not going to be able to do that under this farm bill. We went a little bit further because in the committee I had a dialog with Senator Nelson and Senator Salazar relative to an amendment which they had designed to prevent commodity program payments on land that is no longer a farming operation or used in conjunction with a farming operation. We have agreed to accept some additional language relative to the amendment they proposed and we took in the committee. The amendment requires the Secretary to reduce base acres for covered commodities for land that has been developed for commercial or industrial use, unless the producer demonstrates that the land remains devoted exclusively to agricultural production, or for land that has been subdivided and developed for multiple residential units or other nonfarming uses, unless the producer demonstrates the land remains devoted exclusively to agricultural production. So we are taking the ability away from a commercial developer to ever get any farm payments. I do not know who these particular individuals are who have been referred to as the examples of who ought not to get payments who have gotten payments, but I do recognize there have been abuses, and we have sought to correct that. We have sought to correct that, and we are going to make sure any payments that go on base acres under the bill go to a farmer or an individual who is using that land for agricultural purposes and not for any commercial development or residential development purposes. Are we going to cure all the problems? Look, I wish I thought we could. I know with any program that is of this size there is going to be some abuse somewhere along the way. We do not have a Federal program in place today that is not being abused and that you cannot single out 1 or 2 or 10 individuals, particularly where we have an expenditure of billions and billions of dollars. But we are certainly doing our best to address the issue, to try to correct the abuses that have taken place. In this particular instance, we truly have made real reforms that I think are going to close every loophole we know is out there today when it comes to making sure payments go to folks who deserve the payments and that the payments are at a level that is reasonable when it comes to making sure we have a close watch on the taxpayer dollar. I wish to close this portion of my comments by saying we will detail, as Senator Lincoln said earlier, some of the specific reforms. But I will highlight one. I was involved in the writing of the 1996 farm bill, as was Senator Grassley, as was Senator Lincoln. In that farm bill, which was enacted 5 years ago, we had a payment limit cap of $450,000. In the last 5 years, from 2002 to the language that is included in the base bill we are talking about today, we have reduced that $450,000 down to $100,000. Now, that is a $350,000 reform. Senator Grassley takes it up to $250,000, but that is not apples and apples. But the fact is, we have made real reforms in the dollar amount that folks are eligible to receive from $450,000 down to $100,000. We have also made other significant changes, such as elimination of three entity, as well as the requiring of attribution to every farmer in America who is going to be receiving payments under this farm bill. With that, I will reserve the remainder of our time.

Mr. CHAMBLISS. Madam President, I think the issue is as to what time those votes will take place. As I understand the unanimous consent request, it is following the debate on the Grassley-Dorgan amendment that we go to votes on the two Alexander amendments.

Mr. CHAMBLISS. At whatever time that might be.

Mr. CHAMBLISS. I would add to that, that the Gregg vote on amendment No. 3673 requires a 60-vote margin. I yield 5 minutes to the Senator from Alabama, Mr. Sessions.

Mr. CHAMBLISS. Reserving the right to object, so we can give our colleagues further information about where we are going, is it the chairman's intention to move ahead then with debate on additional amendments, hopefully maybe the Coburn amendments and the Sessions amendment that might be voted on tonight, along with the Gregg amendment?

Mr. CHAMBLISS. How much time remains?

Mr. CHAMBLISS. Madam President, I yield 5 minutes to the Senator from Arkansas, Mr. Pryor.

Mr. CHAMBLISS

Mr. CHAMBLISS. Mr. President, we are constantly coming to the floor or going into committees and talking about the fact that when it comes to the complicated programs we deal with, it is critically important that Members, as well as our staffs, think outside the box and come up with new ideas, new concepts that make sense, where we can take bureaucratic programs and streamline them, make them better, make them easier, make them more, in this case, farmer friendly. For that reason I compliment the Senator from Alabama. I think he has come up with an excellent idea. It has the potential for providing something similar to an idea that was prevalent in the House several years ago that was proposed by a Congressman from Kansas, Kenny Hulshof, and that was to create farm savings accounts that the farmer could use to take excess money in good years and put it, tax-free, into a savings account and save it for a time down the road where he knows he was going to have a tough year and he would have that money available. That is exactly something along the lines of what Senator Sessions is talking about. I do think it is a great concept. The problem I have with the amendment right now is that we have had no hearings on it in the committee, and we are not sure of whether it can even be implemented as a part of this particular farm bill in conjunction with the crop insurance provisions that are in our bill. I have talked to my dear friend Senator Sessions. I have told him I regret I will have to vote against it, but a vote against it is not a vote against the concept or against the fact that he has now come in and has thought outside the box, and I think he has a very good concept that I would encourage the chairman to look at as we move in the next year into the implementation of this farm bill. Let's have some hearings. Let's get some economists, some crop insurance folks to think about it and see if we can't maybe even think about a stand-alone bill for it and not wait for the next farm bill. So I think it has merit. I just think trying to incorporate it into this bill presents complexities that I don't think we can accommodate.

Mr. CHAMBLISS. I, too, am happy to engage my friend from Maryland in discussion.