Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, it would be easy to say I associate myself with the remarks of the Senator from Kansas and let it be that way. But I was around when we set up the Federal crop insurance program. I wish to reflect on the rationale behind it and then, consequently, why I am going to vote against Senator Brown's amendment. Remember, for decades of a farm program, we may have had some crop insurance through the Government--and for hail through the private sector--that farmers could buy for some protection, but, for the most part, against natural disasters people relied upon the political whims of Congress to vote for or not to vote for disaster aid. So this crop insurance program was put in place to give farmers the ability to manage their risk, let the individual farmer make some determinations so he can take risks out of farming, out of the natural disasters that are connected with it--even now, you can take some of the price questions out that are involved with it--and manage his own risk as opposed to relying upon the Senators and the Congressmen to vote or not to vote or when to vote for disaster relief. So we put this in place. In order for it to be successful, you have to have a network to carry it out. This network is a private-sector network. I think it is working very well. I think it is in jeopardy if the Brown amendment is adopted. So I have some concerns about the amendment. It could have some very detrimental impacts on the crop insurance program that is so valuable to rural America. So I urge my colleagues to oppose this amendment because I do not believe the amendment is reform. It moves us back to a time when there was more of a reliance upon the political whims of Washington to devote disaster relief. The amendment seeks to further cut support of the Federal crop insurance program by several billion dollars simply to fund other projects. Additional cuts beyond what the Agriculture Committee has already adopted will prevent the program from providing assistance to America's farmers that is so vital to risk management. Over the years, Congress has insisted on having the Federal crop insurance program reach out to all farmers, especially small, beginning, and limited-recourse farmers. This is to be done in a fair, equitable, and nondiscriminatory manner, serving as an effective risk- management tool that all can use. According to the Department of Agriculture, the program is succeeding at this objective. Additionally, crop insurance has become essential to many farmers in securing credit from a bank, rental agreements, as well as providing confidence to more effectively market their crops through the futures market where they can capture higher prices. The farmers in my State and across the country have used this tool over and over. It must be effective or they would not be using it and paying the premiums each year. The Senate Agriculture Committee reported a farm bill that contained a two-point cut to the administrative and operating reimbursement, a cut that represents nearly $750 million in reduced program cost. Any cuts to the A&O reimbursement rate beyond those two points that were agreed upon by the committee will likely undermine the program by threatening the service America's farmers both need and deserve. Further cuts could also jeopardize the continued viability of the private delivery system that is vital to the program's success. This could put private-sector employees out of work and result in the hiring of new Federal employees to serve farmers. Private-sector delivery is efficient and results in good services. Approximately 30,000 jobs are created by this industry. Those would be in jeopardy, and we would not have small farmers and ranchers serviced the way they are now. Further, the amendment's proposal to increase the quota share could weaken the crop insurance program and may result in private insurers exiting the program. In fact, increasing the quota share is counter to the Federal policy of the past 25 years, which successfully has shifted more risk to the private sector for two primary reasons. First, private companies do a better job at loss adjustment. Both the Inspector General and the GAO have repeatedly focused on that point. Second, by shifting more risk to the private sector, Federal costs should be lower over time, as companies have more financial responsibility for indemnities. It has taken more than 25 years, and we do not want to lose that 25 years. As a matter of transparency, I wish to tell everybody in the Senate that I participate in a crop insurance program. My constituents ought to know it, and my colleagues voting on it ought to know that as well.

Mr. GRASSLEY. Would the Senator from Montana yield me some time, please?

Mr. GRASSLEY. Why don't you say how much I can have.

Mr. GRASSLEY. I would like to have 5 minutes.

Mr. GRASSLEY. Mr. President, what the Senator from Montana is trying to do has to be done if we are going to have justice for the family farmer. We have been involved in suits regarding the packing houses for 20 years. I remember when I first came to Congress, we were trying to overturn the Illinois Brick case because it stood in the way of the family farmer getting justice in business. So you end up fighting the National Manufacturers Association and the U.S. Chamber of Commerce to bring justice to family farmers. Finally, in a lawsuit down in Alabama, we get a jury who says the family farmer is right, but you get a judge who overrules the jury. Now, I want to speak about not just this particular case, because Senator Tester is doing that, but I hope everybody in this Senate remembers that on several different occasions, everybody in the food chain beyond the farmer's gate was lining up against the farmer. I will cite just a recent example in regard to food and fuel and the ethanol issue and corn going to $4 and the price of food going up and every farmer getting blamed for it. Every person in the food chain outside of the farmer's gate was involved in that conspiracy that had nothing to do with the price of food rising, but the family farmer got blamed for it when food went to $4--or when corn went to $4. But when the price of corn went down to $2.85, I didn't see the price of food go down. But the conspiracy exists. This court case and this judge and this ruling on the Packers and Stockyards Act is contributing to that conspiracy. We need to get behind it and get some justice for the family farmer. Now, if you want to know why there is a justification in doing what we are doing, all you have to do is go to a statement that a CEO of a major corporation made a few years ago--a little bit unrelated to this, but somewhat related to it--which is: Why do slaughterhouses and packing companies own livestock? We own livestock, the answer was, in a very candid way; we own livestock because when prices are high, we kill our own, and when prices are low, we buy from the farmer. What we need is a marketplace that has a great deal of transparency. We fight, trying to get information on sales from these packing companies under price discovery. We pass legislation to make price discovery real. Then we get regulations from the U.S. Department of Agriculture--we get regulations from the U.S. Department of Agriculture to the extent that we do not meet the goals of the legislation, and we don't get as much information under the regulations of the Department. I had a staff person who just wanted to go back to Iowa and work for the Department of Agriculture. He is going to work for the Packers and Stockyards Act. I said to him: You know, you want to go there because you don't want to do anything, because they don't do anything to help the family farmer. I didn't change his mind. He is still there working, and I hope he is doing a good job. He knows how I feel about it. Maybe he will actually get something done. But we have to get rid of this attitude that you are going to let everybody beyond the farmer's gate gang up on the farmers, particularly when there is a court case where the jury is giving justice to the farmers. We have to pass this amendment so we get justice for the family farmer. I yield the floor.

Mr. GRASSLEY

Mr. GRASSLEY. I ask for the regular order.

Mr. GRASSLEY. The managers of the amendments are trying to get amendments brought up. I am ready to go, and they asked if I was ready to go.

Mr. GRASSLEY. Mr. President, amendment No. 3823 deals with agricultural competition and increased consolidation in the agricultural industry. The amendment is cosponsored by me, Senator Grassley, and two Democrats--Senator Kohl and Senator Harkin. I wish to make it very clear--and I will get into some detail--there may be some people who feel the amendment I have put before the Senate is exactly the same as a bill Senator Kohl and I had introduced previously. It is very slimmed down from that bill. So any staff who is watching the debate and getting nervous about an amendment coming up that every big industry in the United States may find fault with, we are talking about a very slimmed-down version of it. I will explain all that shortly. I have been concerned with competition in the agricultural marketplace and increased competition in the agricultural industry for quite some time now. You have heard me speak about it on the floor. We have had hearings on it. I had hearings in the Senate Finance Committee, as well as hearings I participated in under both Republican and Democratic chairmanships of the Judiciary Committee. Agriculture, as you know, is a fairly risky business. I know that from personal experience because I have lived and worked on a farm all my life. But for some time, working in agriculture has become even more difficult for the little guy. The trend has been for companies in the agricultural sector to consolidate. I am talking about businesses that serve agriculture with input. I am talking about industry that processes agriculture. So there has been consolidation in that industry. I am not talking about the consolidation of farms. There has been that as well. That has been going on since 1790, when 90 percent of the people in this country were farmers. Today, 2 percent of the people in this country are farmers. I am talking about the impact of agriculture agribusiness consolidation and the impact upon the 2 percent of the people in this country who are farmers. This consolidation has created new business giants impacting competition in the marketplace for the family farmers, for producers, and for consumers. Family farms and independent producers are feeling the pressure of concentration in agriculture. Small and independent producers are seeing fewer choices--who the farmer can buy from and to whom the farmer can sell. All this consolidation in industry at both the horizontal and vertical levels leads to the very real possibility of fewer product choices and higher prices for consumers. I don't believe all mergers are, per se, bad, and I don't believe all are wrong and all lead to unfairness. But I think at the same time we need to make sure--we need to make very sure--open and fair access to the marketplace is preserved for everyone. We need to make sure large businesses are not acting in a predatory or anticompetitive manner. We need to make sure family farmers and independent producers can compete on a level playing field. We need to make sure consumers have as many choices as possible. So I am not talking just about mergers and lack of competition being harmful just to farmers, I am talking about the impact that might have on consumers paying more. The antitrust laws are all about protecting consumers, not about protecting producers. But in the case of family farmers, they are purchasers of input, and so they are consumers. But they also have to make sure that the marketplace is protected for the ultimate end-consumer, the consumer of our agricultural products. By looking out for these things, you know what we end up doing, Mr. President? We keep our economy strong because of competition. We keep our agricultural community vibrant. We keep it competitive. And hopefully, in the end, we keep our consumers happy, with quality food at a relatively inexpensive price. American consumers don't know that, but they already have that environment from our farmers. We take too much for granted in America, so I am not so sure consumers know that, and I like to remind them from time to time. So we have this amendment before us. It is an amendment cosponsored, as I said, by Senator Kohl and Senator Harkin. The language of this amendment draws from a bill that Senator Kohl, Senator Thune, and I introduced earlier this year--S. 1759. It is called the Agriculture Competition Enhancement Act, ACE for short. We call it the ACE Act. However--and this is the point I started out with--I wish to make clear that this amendment which is being offered to the farm bill is quite different from the ACE Act as originally introduced earlier this year. Amendment No. 3823, which I have called up here under regular order, does not include all the provisions of S. 1759 and either eliminates provisions in that bill or incorporates many changes to address concerns raised by members of the agricultural industry, by the administration, as well as Senators on both sides of the aisle. I also worked with the chairman and ranking member of the Judiciary Committee because this bill, S. 1759, was referred to the Judiciary Committee. Because we are offering it as an amendment to this bill, I also worked with the ranking member of the Agriculture Committee to address issues that were in that original S. 1759, which I was hoping to offer here, to take care of some opposition to this bill coming up and yet still accomplishing quite a bit about the problems I see with lack of competition. So the amendment I have called up under regular order is the product of these discussions we had with business, with agricultural leaders, with the White House--or I should say with the administration generally, not necessarily the White House--and, of course, with the Judiciary Committee members and the ranking member of the Agriculture Committee. Now, I want to explain what this bill does after having explained to you, as I just did, that it is not what we had introduced as a bill. First, the amendment would create an Agriculture Competition Task Force to study problems in agricultural competition, establish ways to coordinate Federal and State activities to address competition problems in agriculture, and make recommendations to Congress. In particular, the task force would establish a smaller working group on buyer power to study the effects of concentration, the effects of monopsony, and the effects of oligopsony in agriculture, and make recommendations to the Department of Justice and to the Federal Trade Commission on and for agricultural guidelines. The task force will help give our antitrust regulators real insight and expertise specific to the farm community that I believe is currently lacking when they address competition issues in agriculture. Second, the amendment would require the Justice Department and the Federal Trade Commission to issue agricultural guidelines, taking into account the special conditions of the agriculture industry, and require the Department of Justice and the Federal Trade Commission to report to Congress on the guidelines. Both the Senate Judiciary Committee and the Agriculture Committee heard witnesses in several hearings testify that there is a need for agriculture-specific guidelines when the Department of Justice and the Federal Trade Commission look at agriculture mergers. Currently, the Department of Justice and the Federal Trade Commission have guidelines for specific industries and issues, such as health care and intellectual property, but not for agriculture. So it makes sense-- not just to me but to these many experts in agriculture and antitrust law that we heard in these several hearings before our committees--that our Federal regulators should have agricultural guidelines because of the special circumstances and special characteristics particular to the agriculture industry and particularly because there tends to be, in Washington, DC, outside of the Agriculture Department, little consideration and understanding of the unique industry of agriculture. Some people would say that even within the U.S. Department of Agriculture there is a lack of understanding in Washington, DC, of what the problems of agriculture are all about. I don't pretend that even with the adoption of this amendment we are necessarily going to bring about the total understanding that there ought to be for the 2 percent of the people in this country who produce food for the other 98 percent, as well as a lot of surplus that is exported beyond. But whatever we can do to help, and particularly when there are policy decisions made dealing with agriculture when it is not fully understood, if we can just get some attention on agriculture in those areas, I think we will be taking a giant step forward. Those characteristics I am talking about include monopsony, which is a situation where there is a single purchaser of goods, and oligopsony, which is a situation where there are few buyers who, at the same time, have a disproportionate amount of market power. Third, the amendment would formalize the Department of Agriculture's review of agriculture mergers with the Justice Department and the Federal Trade Commission, requiring the Department of Agriculture to provide comments on larger mergers in the industry--mergers that submitted second requests for information under the Clayton Act. That is already a process that is in law. Currently, the Justice Department or the Federal Trade Commission informally consults with the Department of Agriculture when they analyze ag mergers. These agencies have what we call a memorandum of understanding to consult with each other. But I believe, following on the advice of experts who have testified on this matter before the Agriculture Committee, that the current process--meaning the current process of the memorandum of understanding--does not sufficiently ensure that farm community concerns are adequately considered. Far more than the Justice Department and far more than the Federal Trade Commission, the Department of Agriculture has extraordinary knowledge and expertise in agricultural matters. The Department of Agriculture formulates agricultural policy for our great Nation and works closely with the farm community and agricultural industry about various concerns. They have experts and economists who know and work with the data on a daily basis. The Department of Agriculture is the office that can best assess the true impact of ag mergers and other business transactions for farmers, ranchers, and independent producers, as well as the trickle-down effect on the consumer. So that is why it makes sense that the role the Department of Agriculture plays presently in antitrust review of ag mergers be more than just a memorandum of understanding; that, in fact, it be permanent and a formal role, not one that is informal and loosely contained in the memorandums. Moreover, having such a requirement of formal participation or consultation is not some new novel idea. I wish I could claim a new novel idea. Other agencies, such as the Federal Communication Commission or the Department of Transportation, formally participate in the review of mergers in their industries. They render formal decisions that are then shared with the FTC or the Department of Justice. So along the lines of the precedent set by the FCC and the Department of Transportation, I am asking that we do the same thing with the Department of Agriculture and the FTC and the Department of Justice. I hope I have described to you what is a very modest approach, much more modest than the ideas Senator Kohl and I had in the bill that I am saying I am offering a stripped-down version of here. I basically put in statute what the Department of Justice and the Federal Trade Commission are allegedly already supposed to be doing with the U.S. Department of Agriculture. The approach we advocate in this amendment will ensure that all of agriculture's concerns and needs are fully discussed when Federal agencies examine proposed ag business mergers. By guaranteeing inclusion and openness, we will go a long way toward alleviating understandable anxiety about an increasingly concentrated industry. Finally, the amendment would provide for additional resources to the Department of Justice and the U.S. Department of Agriculture's GIPSA division to enhance their ability to look at agricultural transactions and competition issues. I want my colleagues to know that we worked very closely with several agricultural and antitrust experts on the language contained in this very amendment, as we did in the original bill. The amendment is supported by a number of farm groups, and I would like to read these to you: the Organization for Competitive Markets, the Campaign for Contract Agriculture Reform, the Center for Rural Affairs, Food and Water Watch, the Institute for Agriculture and Trade Policy, R-CALF USA--and just in case people don't understand that acronym, those are people who are cattle producers but who aren't necessarily affiliated with the National Cattlemen's Association. They could have dual memberships, but they do have some different points of view. Then another organization is the Sustainable Agriculture Coalition, and lastly the Western Organization of Resource Councils. Mr. President, I ask unanimous consent to have printed in the Record a December 10, 2007, letter in support of this amendment.

Mr. GRASSLEY. I yield. Amendment No. 3771

Mr. GRASSLEY. Mr. President, I ask for the regular order on amendment No. 3823.

Mr. GRASSLEY. I am asking for the regular order on amendment No. 3823.

Mr. GRASSLEY. So my colleagues are clear, once again to repeat, Senator Kohl and I listened very carefully to the concerns expressed by companies and groups that contacted us about S. 1759, the original Agriculture Competition Enhancement Act--we call that ACE for short-- and in response to those concerns, we made significant changes and elimination to the language which has been incorporated in this amendment. This amendment does not make any substantive changes in antitrust laws. I am going to address that a little more specifically because that is one of the things we have heard against this amendment. Maybe it would be an applicable criticism of the bill but not of this amendment. Also, there is no mandatory adoption of the task force recommendations on the guidelines to which I have referred. The constitutional issues raised have been taken care of and more contentious provisions have been eliminated. The bottom line is the concerns that were raised by certain companies, as well as the Justice Department and the FTC, about our previous iterations of the ACE bill have been taken care of in the amendment. The bottom line is, this amendment is very much an attempt to address everyone's concerns and to reach a fair compromise because I think we could have gone a lot further and been even a lot more aggressive in dealing with agricultural competition issues. I had a hard time convincing Senator Kohl we ought to make these changes, but he has agreed as well. There is a real need for this amendment. We need it to beef up our ability to address competition issues in agriculture and to address concerns with consolidation in the industry. My amendment is an itty- bitty step in the right direction; maybe some would say too small of a step but still a good first step at getting something done. I urge my colleagues to support the Grassley-Kohl-Harkin amendment. I do have some other things I want to say, but I do not want to take all the time right now. I do want to speak about some of the differences between what was in our bill and what is in our amendment. I am willing to yield the floor if other people want to speak on the amendment that I have before us.

Mr. GRASSLEY. Mr. President, I listened to the Senator from Kansas. I am a farmer. I am not a lawyer like he is. He is a lawyer and farmer, so he might have some intuition. But I would just like to have him come, and I will deliver it to his desk--he needs to read my amendment. What he has said is an analysis of the bill that Senator Kohl and I introduced, but that is not the amendment. Maybe he missed my opening remarks, but I went to great length in those opening remarks to explain how my amendment differs from the bill. I want to point that out to the Senator from Kansas because I think I have addressed every concern he has presented to the Senate in his very good speech. I have taken care of his concerns, and I am going to mention those concerns he has brought up, and then I am going to go to some length to tell you how I have taken care of that. But there is no special counsel amendment in this bill, as the Senator from Kansas has said. There are no additional reviews of transactions that have already taken place. That was in the original bill. It is not in this amendment. He spoke two or three times about changing the burden of proof. That was in the original bill. It is not in this slimmed-down amendment. There is no burden of proof shifting in the amendment. The task force that we provided for has no review or study provisions in the amendment, as indicated by the Senator from Kansas. Now I am going to go into some detail, because obviously people are not listening to anything I have said. I want to state in a more elaborate way how this bill differs--this amendment differs from the bill that I said Senator Kohl and I first introduced, and the length we went to take care of concerns that the White House, the administration has raised, concerns that both the ranking member and the chairman of the Judiciary Committee raised, because this bill was referred to Judiciary, and then lastly, working with the ranking member of the Agriculture Committee, to address concerns he had. There has been a lot of smoke and mirrors--I think you heard some of that--about the provision of the bill, and most of those charges are not factual, as I have indicated. The fact is, this amendment is very different from the bill Senator Kohl and I introduced earlier this year. This amendment is also different from another amendment I had already filed to this bill. Let me list some of the things that are not in our amendment that are before us in 3823. I am hearing that people are concerned about the shifting of the burden of proof in the amendment. The burden-of-proof shifting provision that was in the prior iteration has been eliminated. It is not in this amendment. There are no substantive changes to antitrust laws at all. I am hearing concerns about reviews that will be done after mergers have been approved. The provisions that allow the task force to do a study of agricultural mergers that were approved within the past 10 years have been eliminated, not in this amendment. In addition, the provisions requiring the Justice Department and the Federal Trade Commission to review ag mergers 5 years after they have been approved have been eliminated as well. The provision creating an Assistant Attorney General for Agricultural Antitrust at the Justice Department has been eliminated. In other words, it is not in the amendment pending before the Senate. The constitutional concerns raised by the administration, not by Senator Brownback, about the agricultural competition task force are gone, the constitutional concerns. We changed the provisions requiring adoption by the Justice Department of task force working group recommendations on agricultural guidelines. The amendment now has the Justice Department and the Federal Trade Commission consulting with the task force working group on the guidelines. Any so-called constitutional concerns have been eliminated. We have made other changes to the prior writings of this amendment and/or the bill, all of which were incorporated in amendment 3823. We made these changes to address concerns that we agreed with, and we made changes in order to reach a fair compromise. The fact is, big business and the agricultural giants do not want anything that might put up any sort of review by people who know something about agriculture, of their expansion and concentration efforts. The fact is, our Federal antitrust regulators refuse to recognize that agriculture is unique and should have industry-specific guidelines to make sure that special circumstances of the agricultural landscape are considered. This brings about consideration, this does not bring about any change. Any movement to them, no matter how small, to try to address concentration and competition issues in agriculture is going to be decried by the powerful interest groups and their lobbyists. So when something reasonable is suggested, such as the Grassley-Kohl-Harkin amendment No. 3823, we still are going to get the outrageous claims that this is a bad amendment. The reality is the sky is not falling. I advise my colleagues, particularly the Senator from Kansas, to read the amendment. Forget about the bill he has been referring to. Instead, listen, and stop listening to those sensational cries being made by agribusiness and their allies. We need to pass this amendment. I yield the floor.

Mr. GRASSLEY. I will probably do that. Let me make an inquiry. Can I do that, Mr. President, without setting aside or yielding my right to continue discussion of this amendment?

Mr. GRASSLEY. But in the paragraph you were quoting, it says exactly the same thing in the letter I got of November 15 in which they were commenting on 1759, and they surely can't find the same fault with the amendment that they found with the bill because we met with them and made changes according to what they asked us to do. My staff corrects me that we didn't actually meet with the Department of Justice, but we were well aware of the changes they were demanding, and those changes are taken into consideration in this legislation. Then we keep hearing from the Senator from Kansas about investigations and reviews. Get that out of your system. I have spoken twice on that issue--no reviews, no investigation. Then when you hear all of these faults the bill is going to bring about--you are going to increase the cost of food to the consumer or maybe decrease profitability to the farmer--I don't see that anything like that is a result of a task force that is going to help the Justice Department and the FTC in determining whether mergers are anticompetitive. These are guidelines. They are not making decisions. The Department of Justice and the FTC will be making those decisions. But is there anything wrong with having a little bit of input into agricultural issues before those two agencies from experts in this town in the Department of Agriculture who may have some understanding of agriculture? I don't think the sky is going to fall if you have that sort of input. I hope we can vote on my amendment and move on. I will only speak to the extent I have to to continue to defend misunderstandings of what the amendment does as opposed to what the original bill did.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, I think everybody in this body would agree we need to provide an adequate safety net for our family farmers, and I think I ought to be totally transparent with the taxpayers who might be listening, as well as my colleagues. I want you to know that I farm in a crop share--in Iowa, we call it a 50-50 arrangement--with my son. If we get farm payments, I get 50 percent of those payments. So I have received farm payments and presently do. That is assuming prices are low enough so you do receive those payments. Right now, they aren't that low. We are talking about an adequate safety net. In recent years, however, assistance to farmers has come under increased scrutiny by urban communities and the press. The largest corporate farms are getting the majority of the benefits of the farm payment program, with 73 percent of the payments going to 10 percent of the farmers. With a situation such as that, we could lose urban support for the safety net for farmers. Government payments were originally designed to benefit our small- and medium-sized farmers, but instead, now, as you can see, the vast majority of them are going to the smallest percentage of the farmers-- the biggest farmers. Unlimited farm payments have placed upward pressure on land prices and have contributed to overproduction and lower commodity prices. Increased land prices and cash rents are driving family farmers and young farmers from the business of farming. I have mentioned this before in other debates. Land in Iowa generally, but I will use as an example land near my farm in New Hartford, IA, has skyrocketed and is selling anywhere between $4,000 and $6,000 an acre. In my home county, the value of an acre is up 64 percent since 2000. Anybody listening might say, well, why is that bad for farming? Well, family farmers don't buy land one day and sell it the next. You buy it for the long haul. Sometimes farms have been in what we call century farms, for well over 100 years. So this doesn't put income in farmers' pockets. It does give them value. And if they were to die, I suppose their heirs would get a lot of money. Across the State of Iowa, the average land value per acre rose 72 percent in the last 6 years. All these figures I am citing have something to do with the inability of young people to get started farming. When the average age of farmers is 58 in my State, we ought to start thinking about what we can do to make sure that young people, the next generation of farmers, can get started. My State isn't the only one where this is occurring, an increase in land values. In a report published by two agricultural economists at Kansas State University, land values have increased 64 percent since 2002. This trend is occurring in many other States as well. The average of typical cash rents per acre in Iowa rose 25 percent in the same period of time. Because if you can't buy land, and you want to farm, you rent land. How are family farmers and young farmers going to survive with prices like this? How can they even get started? This brings to mind a conversation I had within the last week with a young farmer near my home. He knows who gets these big payments in the State of Iowa, and he said, so-and-so--and I am not going to give the names out--just bought 600 acres of land. Why don't you guys do something about subsidizing these big farmers to get bigger? Now, this same young farmer would say to me, any farmer can get bigger all they want to. That is their business. That is entrepreneurship. But should we be subsidizing the biggest farmers to get bigger? He says, if you want to do something to get young people started--this young farmer said to me--put a cap on what they are getting paid from the Federal Treasury. In other words, 10 percent of the biggest farmers getting 73 percent of the benefits out of the farm program is just plain bad policy. I have been hearing directly from producers for years what former Secretary Johanns heard in his farm bill forums held across the 50 States. Young farmers can't carry on the tradition of farming because they are financially unable to do so because of high land values and cash rents. If that was the market, okay. But if it is being influenced by subsidies for big farmers to get bigger, they would say it is wrong. They would also say it is wrong when you have 1030 exchanges, when it is cash free, as having something to drive up the value of land as well. Professor Terry Kastens, of Kansas State University, came out with a report on this subject. The report states that since the 1930s, government farm program payments have bolstered land values above what they otherwise would have been. Dr. Neil Harl, an Iowa State University emeritus professor, worked with Professor Kastens on this subject, and he determined that: The evidence is convincing that a significant portion of the subsidies are being bid into cash rents and capitalized into land values. If investors were to expect less Federal funding--or none at all--land values would likely decline, perhaps as much as 25 percent. That would give young farmers better opportunities to buy or cash rent for less in order to get started farming. And that is necessary, because the average age of farmers in the Midwest is about 58 years. The law creates a system that is clearly out of balance. If we look at the results posted here, it emphasizes what I have already said: Ten percent of the farmers get 73 percent of the benefits out of the farm program, and the top 1 percent gets 30 percent. Senator Dorgan and I have offered this payment limits amendment which I believe will help revitalize the farm economy for young people across this country. This amendment will put a hard cap on farm payments at $250,000. For a lot of farmers in my State, they say: Grassley, that is ridiculously high. But we have to look at the whole country, so this is a compromise. No less important, we tighten up the meaning of the term ``actively engaged,'' a legal term in the farming business. What that means is that people have to be farming, because if we are providing a safety net to someone in farming, I think they should be required to actually be in the business of farming, sharing risks and putting their money into the operation. I wish to make a very clear distinction here. Some Members of the Senate have advocated that the Dorgan-Grassley amendment is not as tough as what is in the Senate Agriculture Committee bill or some say it might be too tough. I want to say why this is not true, and I have a chart here to bring this to your attention. We have to compare apples to apples. That is what my chart does. Saying that the committee has a hard cap on payment limits of $200,000 is not accurate. They only have a hard cap on direct payments and counter cyclical payments. Let me remind my colleagues, we have direct payments, we have loan deficiency payments, and we have countercyclical payments. Out of those three, the bill before us that we are amending has a hard cap on direct payments and countercyclical payments, not on loan deficiency payments. The Dorgan-Grassley amendment actually caps direct payments and countercyclicals at $100,000. In addition, the amendment will cap marketing loan gains at $150,000. While the committee--this is the loophole, this is the weakness of the argument that this bill tightens things up--it leaves loan deficiency payments unlimited. This actually weakens current law. So while the committee took some correct steps by closing the loopholes I have advocated against by including the ``three entity rule'' and by including direct attribution, it also takes a step in the wrong direction by making payments virtually unlimited. This whole debate is about good policy. Fixing one problem but leaving other doors open does not do any good. I also wish to make a clarification for some of my colleagues. I have gotten quite a few questions about how the payment cap will actually work. We set nominal limits at $20,000, $30,000, and $75,000 respectively, then we allow folks to double. So a single farmer who would get $20,000 in direct payments can actually double to $40,000. We set it at $20,000, so if they want to attribute the payments to a husband and wife separately, they can. So a husband can have $20,000 attributed to him and $20,000 to the wife, for a total of $40,000, just like a single farmer. One more clarification: If a farmer is working with his two sons, each would be eligible for the $40,000 individually. I wish to address some of the falsities my colleagues have raised since the payment limit debate. They have argued that this is not reform because it targets crops but not the Milk Income Loss Contract Program or conservation. To say that we do not have payment limits on these two programs is hogwash. The Milk Income Loss Contract Program has probably the strongest payment limits of any program. What came out of the Agriculture Committee includes caps on programs such as EQIP, the Conservation Reserve Program, and Conservation Security Program. Whether those caps are at appropriate levels is something that can legitimately be debated but should not detract from what we are doing on commodities through Dorgan-Grassley. Now, our amendment produces some considerable savings. We think there is money needed in some programs that are not adequately funded to help small businesspeople, conservationists, and low-income people through commodity programs. We support beginning farmer and rancher programs and the rural microenterprise program. We also provide funds for organic cost share programs and the Farmers Market Promotion Program. A large priority of mine has always been seeing justice is done for the Black farmer discrimination case against the U.S. Department of Agriculture. This will double the amount provided by the committee for late filers under the Pigford consent decree who have not gotten a chance to have their claims heard. It is time to make these farmers right who were discriminated against. We support the Grassland Reserve Program, the Farmland Protection Program, and finally, while the Agriculture Committee makes significant contributions to the nutrition and food assistance programs, they were not able to go far enough in light of the tight budget constraints. So Dorgan-Grassley adds money in those areas. The 2002 bill has cost less than expected. But this was not because of the payment limit reform in 2002. In actuality, we increased the nominal payment cap, and it continued the generic certificate loophole. Instead, what has happened is that we have had some good years in agriculture and prices have been high. That is why it cost us less to have a safety net over the last 5 or 6 years, not because reforms were put in, in 2002. I worked with Senator Dorgan on a similar measure in 2002, and it passed with bipartisan support, 66 to 31. Unfortunately, it was stripped out in conference. I voted against the farm bill because of that. Let me remind this body that the Senate Agriculture Committee, out of conference, set up a commission called the Commission on the Application of Payment Limitations for Agriculture. That is this report right here. They did this during conference as a sop to Dorgan and me. Is my 14 minutes up? I ask for 2 more minutes.

Mr. GRASSLEY. Mr. President, I yield myself a few minutes.

Mr. GRASSLEY. Mr. President, I will do it for the sole purpose of commenting on a couple things the Senator from Arkansas brought up. One was the statement where if our amendment is adopted, Senator Dorgan and I would be working to eliminate farm program payments altogether. I wish to make clear I am a believer in a safety net for farmers. We are going to maintain that safety net. So I hope people will ignore that suggested goal. I think it is important to understand that farm programs have been around since the 1930s. They have been around as a safety net because farmers are at the beginning of the food chain or, you might say, at the bottom of the food chain. We have a situation where farmers for input, for producing a crop--producing the food our consumers eat--pay what is charged for those imports. They might bargain a little bit, but they don't have control; they have to buy the imports or they aren't in farming. When they sell their products, they have to sell what the market bears for the day they choose to sell. They might choose a different day to sell, but eventually, whatever they sell for is what the market is there; a farmer is not bargaining for that market. So smaller farmers don't have the ability to withstand things beyond their control, such as a natural disaster or domestic policy such as, let's say, Nixon freezing beef prices, ruining the beef farmers, or stopping the exports of soybeans so that they fall from $13 a bushel to $3 a bushel. Those are things a farmer doesn't have anything to do with. So we have a safety net to help medium- and small- sized farmers get over humps and things they don't control, whereas larger farmers, the farmers whom we are putting a $250,000 cap on--the larger the farmer, the more staying power they have. Now, I admit they are affected by the same policies I have referred to, but they have the ability to withstand that to a greater extent than smaller farmers. Also, as I stated in my opening remarks, when you subsidize big farmers, it helps them to get bigger, and it makes it more difficult for people to stay in farming. A second thing I wish to give a retort to is the use of quotes from an article that says the largest farms in America produce 78 percent of the commodities, but only get 56 percent of the farm program payments. Well, the safety net wasn't set up to match the food source. It wasn't developed to follow the crowd. It was set up to protect small- and medium-sized farmers from things beyond their control, and to maintain the institution of the family farm because it is the most efficient food-producing unit in the entire world. I would compare it to corporate farms on the one hand; I would compare it to the political State farms of the old Soviet Union as an example. The family farm has a record of being the most productive. That is to the benefit of the farmer and the entire economy. It is to the benefit of the consumer. I am not advocating that there is anything wrong with large farms or large farms expanding; we just shouldn't subsidize them to do it. I yield the floor.

Mr. GRASSLEY. Mr. President, I ask unanimous consent to speak for 5 minutes.

Mr. GRASSLEY. Mr. President, I wish to speak in support of a provision in the bill that the amendment before us is going to strike, the Farm and Ranch Stress Assistance Network, which is included in the underlying bill of the Agriculture Committee. This network is a critical service to help American families, particularly rural families. I oppose the amendment offered by the senior Senator from New Hampshire that would strike this measure. Without a doubt, farmers and ranchers face unique challenges in providing food and fuel for this country. Farming is one of the most stressful and dangerous occupations in the United States. There are environmental, cultural, and economic factors that put farmers and ranchers at a higher risk for mental health problems. Stress in agriculture contributes to rates of depression and suicide that are double the national average. This is true even in good times for farmers. As a farmer myself, this troubles me. It also concerns me when rural residents, especially those involved in agriculture, are disproportionately represented among the uninsured of the United States. One-third of the agricultural population lacks health insurance coverage for behavioral health conditions. With the rising cost of health care and many farmers and ranchers in business on their own, the cost of health care can be too much to handle. We have a long way to go to make sure there is parity in our health care system. Those suffering from mental health problems do not always enjoy the same benefits of treatment because health coverage discriminates against illness of the mind. On top of the risk and cost to farmers and ranchers, access to behavioral health care is more limited in rural areas. There are fewer professional providers, and there is a stigma on this type of care, especially among rural Americans. This is why the Farm and Ranch Stress Assistance Network is needed. It is included in the farm bill because we need to provide better mental health care for people in rural areas. I will be the first to admit that things are looking good for agriculture right now because prices, particularly of grain, are good. We are developing and strengthening our safety net for producers. The renewable energy progress that we have made has helped rural economies. But just because that is a reality today does not mean that it will continue forever. Our farmers and ranchers will face challenges that are out of their control. They will face instances of terrible weather and disaster. They will see droughts and low prices. Good times do not last forever, and that is when our farmers and ranchers will need the support that this provision of the bill gives. One of the most challenging factors that we farmers face is not being able to predict outcome. We are forced to take risk. We face severe consequences when we are wrong. I remember the agriculture depression of the 1980s and what a toll it took on farmers in my State. I wondered if things would be different if the Farm and Ranch Stress Assistance Network had existed prior to the beginning of that depression. This network may support a crisis telephone hotline that farmers can access. Our rural residents and family farmers should have access to confidential and highly trained professionals during these tough times. The network could provide counseling services while working with extension offices to reach farmers. Finally, the Senator sponsoring the amendment should be aware that this network is simply authorized in the underlying bill. We are not adding mandatory money for the program. We are simply providing authority to develop this network with dollars that may be appropriated later on. So this amendment will not save money. Rather, what the amendment will do is do away with much needed support for those who work hard every day to put food on our plates, fiber for our clothing, and fuel for our economy. So let's not eliminate this essential program without taking into account the bad years that could lie ahead. I strongly urge my colleagues to oppose the amendment. I yield back the remainder of my time.

Mr. GRASSLEY. I have yielded back the remainder of my time.

Mr. GRASSLEY. I yield myself 14 minutes, as Senator Dorgan did.

Mr. GRASSLEY. Madam President, what time do we have on Dorgan- Grassley?

Mr. GRASSLEY. This Commission was set up as a sop to Dorgan and myself. We didn't get what we wanted, and consequently, you know, let's have a commission study it. The Commission ended up, in this report, recommending the very measures which we have included in this bill. So they want a study? The study says what we said in 2002 that the conferees didn't think we ought to do. And we have had all the eggheads and farmers in this country study the problem we presented in 2002, and they gave us the results we have here. The report said also that the 2007 farm bill is the time for these reforms. You might remember the last time we had a vote on payment limits was in a budget bill a couple of years ago. Many of our colleagues said they agreed with what we were trying to do, but they said the budget was not the right time; it needs to be done on the farm bill. To all of our colleagues who said: Wait for the farm bill, we are waiting. You have your opportunity. It is 2007. We have the farm bill here. By voting in favor of this amendment, we can allow young people to get into farming and lessen the dependence on Federal subsidies. This will help restore public respectability for the Federal farm program and keep urban support for the farm program so we can continue to have a stable supply of food for our consumers. I call upon my colleagues to support this commonsense amendment, and I reserve the remainder of time for our side. I yield the floor.

Mr. GRASSLEY. Madam President, how much time is left on our side?