Tom Harkin

Mr. HARKIN

Mr. HARKIN. Mr. President, I ask for the yeas and nays on my amendment.

Mr. HARKIN. I yield the remainder of my time.

Mr. HARKIN. Mr. President, I will not take much more time. I appreciate the arguments made by my friend from Indiana. I have visited with hog farmers in Iowa, too, and there is a battle going on in my State, and it is not a very pretty one. There are decisions being made about these large hog operations in Iowa. I do not think that is the point of this argument here. The point of my amendment is simply to say, in terms of cost-share money coming from the Government--and it is not a bottomless pit--let us focus that money on our smaller family farmers, who are really not that well-equipped with working capital sometimes to meet the higher standards of environmental quality. In many cases, they do not have to, but with the cost-share program, this would give them incentive to do so. The larger operations can handle themselves. They have the capital to do so. When you are talking about 15,000 hogs, that is an extremely large operation in any State. If you are talking about 10,000 cattle, that is a lot of cattle. So I think the original numbers that were in the bill, which, as the Senator from Indiana pointed out, do correspond with the regulations covering the Clean Water Act. I believe they still hold pretty true today and will in the future, again, when we are looking at a limited pot of money we can use. I do not need to take any more time.

Mr. HARKIN. Mr. President, I will try not to take much time on this. What this amendment does is to reinstate the limits on the size of livestock operations eligible to receive benefits under the Environmental Quality Incentive Program. Last year, the distinguished Senator from Indiana, Senator Lugar, and Senator Leahy introduced a bill called the Environmental Quality Incentive Program. Quite frankly, it was based upon a bill I introduced several years earlier called the Water Quality Incentive Program. So I have been very supportive of it. I think it is a good bill. I have no problems with it because it provides for technical assistance. It provides for cost-sharing assistance and incentive payments for farmers to meet environmental problems with their livestock operations. In the original bill that the Senator from Indiana introduced last year, there were the following limits, and if you went over these limits, you would not be eligible for cost sharing by the Government, and things like that. Let me read the limits: 1,000 beef cattle; 100,000 laying hens or broilers; 55,000 turkeys; 2,500 swine; or 10,000 sheep and lambs. That was in the original bill last year. In the bill before us today, all of those numbers have been bumped up to incredible extremes. Rather than 1,000 cattle, we now have 10,000 beef cattle. Rather than 2,500 hogs, we now have 15,000 hogs. And rather than 100,000 laying hens or broilers, which I do not know a great deal about, we have 150,000. I think the original bill that Senator Lugar and Senator Leahy introduced had good limits. Why? Because those numbers in the original bill corresponded to the provisions of the Clean Water Act--I should say, corresponded to the provisions of regulations implementing the Clean Water Act--in terms of livestock concentrations. So basically, the bill before us raises these limits up to what I think are really unconscionably high levels. You might say, ``Well, look, if they are big operators and they are polluting, we want to solve these environmental problems, so why not let some of this money in cost sharing and taxpayers' money go to some of the bigger operators to clean up their environmental problems?'' My point is that these larger operators fall under the provisions of the Clean Water Act, and they have to clean up their act. They have to do that. Take a smaller farmer who has maybe 1,000 hogs, maybe he has 1,000 beef cattle, a family-size operation. That farmer does not have to meet the provisions of the Clean Water Act, but it would be nice if he did so. It would help us all out. So the limited amount of money that we are going to have to help clean up our environmental problems, I think, would better be directed toward the smaller family farmers because it will give them an incentive to do so. They do not have to do so, but cost sharing, technical assistance and support will give them the kind of incentive to go ahead and put in waste management control systems, lagoons, and things like that. For these bigger operators who have 10,000 beef cattle or 15,000 hogs, they have to do it anyway. They are so big, they ought to have the capital resources that would allow them to do that. Quite frankly, most of them do. So rather than taking the limited amount of money that we are going to have and try and spread it out--and let us face it, bigger operators have attorneys, they have accountants, they know how to go after Federal dollars. You can bet your bottom dollar that the biggest operators will be in there to get the cost share and technical assistance. What the heck, free money. If I am a big operator and I have to comply with the Clean Water Act and there is a pot of Government money over here that I can go after that will help me meet the requirements of the law and I do not have to dip into shareholders' equities or anything like that, well, I will do that, I will go after the free Government money. That is what will happen under the provisions in the bill before us. The larger operators will go after the Government money, squeeze out the smaller guy. The smaller family farmer has 500 hogs, 1,000 hogs, 700 head of beef cattle. They do not even know this provision is there probably, or if it is there, they will not know how to apply for it. But if we limit it to those smaller operators, then that is where the money will go, and we can focus it where it is needed. So I really do not understand why the initial numbers that were in the Lugar-Leahy bill were changed. I thought they were quite adequate. I think there should be a limit on Federal assistance to these larger operations. In order to get large, they have to have capital resources. They could not get large if they did not have the capital. If they have the capital, then they have the money to make sure they meet the provisions of the Clean Water Act. So, again, I will just say, yes, they do have problems, but they can solve them themselves. The Federal Government should not be subsidizing the growth of large operations. My point is that large hog and cattle operations are first and foremost a State issue. States ought to address that issue forcefully. But second, I do not believe the Federal Government, the taxpayers, ought to be in the position of subsidizing in any way the growth of these large operations, and that really is what this would do under this bill as it is before us. So basically, to repeat, all my amendment does is it takes the numbers for livestock operations that would be eligible for technical assistance and cost-sharing incentive payments to meet environmental standards under the Environmental Quality Incentive Program. It just reinstates those numbers that were in the bill last year. Again, I want to make it clear that the large operations can still get the technical assistance. I do not mind that. They just cannot get cost share to build an animal waste facility. So that is all I am saying. As far as the cost share money goes, let us target that to the smaller operators.

Mr. HARKIN. Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.

Mr. HARKIN. Mr. President, I send an amendment to the desk.

Mr. HARKIN. Yes, fine.

Mr. HARKIN. Mr. President, I ask unanimous consent that I be allowed to offer my amendment but that Senator Ford be able to offer the next amendment.

Mr. HARKIN. I understand there is a unanimous-consent agreement that Senator Ford was going to go next. If he is not available, then I have an amendment I want to offer. I want to make sure Senator Ford offers his amendment, but I do not want to let the clock tick, because we are under time pressure.

Mr. HARKIN. Might I inquire if there is going to be another amendment on the other side. The clock is ticking.

Mr. HARKIN. Mr. President, I would like to ask for the yeas and nays on the two amendments I offered.

Mr. HARKIN. Mr. President, this is my second amendment. I yield back all my time. I already discussed it.

Mr. HARKIN. Mr. President, this is a good debate, and I appreciate the comments by the distinguished chairman on this issue. But I would engage him even further. The interest rate was raised in the bill to meet budget considerations. They were looking for every bit of money they could find to meet the budget, and so someone, I do not know whom, decided, well, we will raise the interest rates on Commodity Credit Corporation loans to farmers by a percent, and that gained us $260 million. We are not now engaged in a budget debate. That has gone. We have room within the budget for this. That is the key. There is room in the budget for this. Let us take this $260 million that my friend from Indiana said is costing taxpayers. No, it is not. What this $260 million represents is $260 million taken from farmers. That is what it is. Farmers pay it. If we do not have them pay it, that means farmers get to keep that $260 million over 7 years. Now, if we take it from them, what is the difference between that and a tax, I ask you? It is a tax on farmers. And, no, it is not true that taxpayers have to pay it. That is not it at all. Why should farmers get a better rate on their commodity loans than they can get at the local bank? Why should they? I will tell you why. Because a farmer, an individual farmer out there does not have the economic clout to go to the big banks in Chicago or New York or Kansas City and get the prime rate. They have to pay whatever the local rate is. And it is usually a lot higher. Now, Cargill, if they want to borrow money, they go to Chicago and they get the prime rate. They might even get it better than that, for all I know, because they are big and they are a big customer. Farmer Joe Jones in Iowa, though, who goes to the local bank to borrow money so he can pay his bills and keep his crop and market it when he wants to, has to pay local going rates. That is why we have this in the bill. That is why we have had it for 60 years, I think, if I am not mistaken. For pretty close to 60 years we have had that provision which allows farmers to borrow from CCC. And now they are getting slapped with a tax. I am sorry, I am just going to tell it like I see it. This is $260 million taken from farmers. Talk about takings, this is taken from the farmer. There is no reason for it. On the farmer-owned reserve, again, $81 million over 7 years is a small price to pay for stability for farmers and for consumers to know that if there is a drought or flood or some other national disaster, they are not going to get hit with exorbitantly high food prices. So on both of these issues, but especially on the interest rate issue, I say to my colleagues, do not stick it to the farmers and charge them more interest than what is necessary for the Government. By doing so, you are just taking $260 million more out of farmers' pockets over the next 7 years, and we ought not allow that to happen.

Mr. HARKIN. Mr. President, how much time do I have?

Mr. HARKIN. I appreciate that, Mr. President. Mr. President, I will just take what remaining time I have to respond to the distinguished chairman's comments on the Commodity Credit Corporation. He said it would cost $260 million--that is true--over 7 years, a very small price to pay for ensuring that farmers are not charged higher interest rates that are not even warranted. Now, when you say that it costs money, it does not really cost money. It just adds to what is in the present bill because the present bill raises interest rates. So if you take that out, you are saying it costs money. No, it does not. This is sort of a shell game. It does not really cost money. It only costs money because by the bill raising interest rates to farmers, the Government is going to make some money. Well, I do not think the Government ought to be making money off of farmers by charging them another percent interest rate on commodity credit loans. So let us not get caught up in that kind of nonsense. Second, on the farmer-owned reserve, the Senator is right; there is no grain in the farmer-owned reserve now because prices are high and farmers have sold their grain. Who can say next year or the year after or the year after or the year after for 7 years? He talks about the grain hanging over the marketplace. That is the way it used to be when the processors and the elevators got the grain and the grain companies. When Cargill got the grain, yes, they could hold it over. But now that farmers have it, they can market that grain whenever they want, and that is the way it ought to be. It is a marketing tool for farmers, not something that depresses the market. The 7-year cost of this amendment is $81 million, which still keeps the bill well within CBO's baseline. So I did not need an offset for that. So there are no pay-go problems relative to the baseline here. The bill now saves $784 million against the December 1995 CBO baseline. It saves about $8 billion against the February 1995 baseline, so there is room in the budget for these amendments. So this first amendment on the Commodity Credit Corporation will cost farmers $260 million. That is what it will do if we leave it in there. If we take it out, it is not going to cost the Government and it is well within the baseline. These increased interest rates on farmers are a tax on farmers. Make no mistake about it; it is an additional tax on farmers. I think it is usurious, and I hope we can get this stricken so the farmers do not have to pay increased interest rates when it is not even warranted by anything happening in the marketplace. Mr. LUGAR addressed the Chair.

Mr. HARKIN. Could I send the other amendment to the desk? I thank the chairman.

Mr. HARKIN. Yes.

Mr. HARKIN. Yes.

Mr. HARKIN. Mr. President, the modification I sent to the desk was simply to strike the provision on the farmer-owned reserve and that leaves the amendment to strike section 505, which is striking that portion of the bill that raises the interest rates to farmers. I will have another amendment that I wish to send to the desk that would reinstate the farmer-owned reserve. I ask the chairman if I can do that now, or do I have to wait for another time? These are two separate issues, and I did not mean to get them together in one bill. So now I have an amendment at the desk that simply strikes that section which raises the interest rates. I wish to also offer the amendment to reinstate the farmer-owned reserve.

Mr. HARKIN. Mr. President, I have a modification of my amendment I send to the desk.

Mr. HARKIN. I thank the Chair.

Mr. HARKIN. Mr. President, my amendment would do two things. First of all, it strikes section 505. What is section 505? Section 505--believe it or not, I know this is going to come as a shock to you, Mr. President, and others who may not have been privy to what is in this so-called farm bill--section 505 raises interest rates that the Commodity Credit Corporation charges farmers. Under current law, the USDA charges farmers interest on commodity loans at a rate based on the costs of money to the CCC, the Commodity Credit Corporation. It is a Treasury-based rate. This is the way it always has been. But the bill and the Leahy-Lugar or Lugar-Leahy amendment would increase the interest rate on commodity loans by 100 basis points above the rate, as calculated under the formula in effect on October 1, 1989. There is simply no justification for hiking the interest on farmers above a level representing the cost of funds to USDA. This bill, as drafted, would constitute usury against farmers. It is unreasonable. Here we have the Fed finally, I think, coming to its senses, I hope, in starting to reduce interest rates. They never should have hiked them in the first place over the last couple of years. Yet, on the other hand, we are going to charge more interest to farmers. I wonder how many farmers know that. I wonder how many farmers know that in this bill their interest charges are going to go up 100 basis points, for no reason. There is no reason for it. The Treasury rates are going down, not going up. These commodity loans are among the most effective and cost-effective of all farm programs because they do allow farmers to market their grain in a more orderly fashion. It helps them obtain funds to pay their expenses using their commodity as a collateral while improving their opportunity to take advantage of higher prices that usually occur after a harvest. So maybe that is the reason they are raising the interest rates to farmers. Maybe they will not be able to keep their grain and they will have to dump it at harvest time when prices are low. That is OK for the grain dealers, OK for the processors--bad deal for farmers. These loans also help alleviate the stress and overloading on transportation and marketing channels during the harvest season. Mr. President, there is simply no reason for USDA to make money from farmers using this program by charging interest rates exceeding the cost of money to USDA. So my amendment would simply retain current law. Because it would simply retain current law, there would be no cost relative to baseline for the amendment. As for the cost of the overall bill relative to baseline, adding the cost of this amendment would still leave the cost of the bill well below CBO baselines. Mr. President, that is the first part of my amendment, to strike that section that raises interest rates to farmers, leave it as under current law that is the cost of money to the Government. As I said, these commodity loans help farmers market their grain in an orderly fashion. They can hold their grain and market it when prices are higher. It leaves the farmer more in charge of when he wants to market it rather than when he has to dump it to pay his bills. But there is another important tool that farmers use in order to maximize their income and to ensure that they can sell their grain at the appropriate time. That is something called the farmer-owned reserve. That is the second part of my amendment. That is to reinstate and restore the farmer-owned reserve, which is eliminated in this bill and in the Lugar-Leahy amendment. The farmer-owned reserve again helps farmers store crops in times of surplus when prices are low. It alleviates the glut on the market. It helps farmers await opportunities for better prices. It is a marketing tool for farmers. The farmer-owned reserve also protects consumers because it helps to hold grain grown in good times in reserve so that drought or other natural disasters will not drive prices to extremely high levels. The availability of grain in reserve is also important in bringing a little stability to both grain and livestock sectors. The reserve helps to keep grain prices from going as high as they might otherwise. It helps prevent the liquidation of livestock herds in teams of short feed reduction. The liquidation of these herds eventually leads to higher meat prices at a later point for consumers. The Food and Agricultural Policy Research Institute at the University of Missouri and Iowa State University estimated that substantial stocks that we held on hand going into the 1988 drought prevented some $40 billion in extra food costs to consumers mostly in keeping the meat prices from going sharply higher. So the farmer-owned reserve bill is good for the grain farmer, has allowed that grain farmer to market the grain when he wants, and it is a marketing tool. Second, it is good for livestock producers because in times of short production or over demand, it keeps their prices from spiking up, which may cause them to liquidate their herds. They do not have the luxury of not feeding their cattle for a long period of time and waiting until the prices go down. A lot of herds are liquidated because of the sharp spikes in prices. The other thing is, if we get a glut in the price, they go way down. A lot of livestock people put on more animals, and that leads to great fluctuations in the livestock market. So the farmer-owned reserve bill provides stability, a marketing tool for grain farmers, some stability in protection for our livestock producers, and it provides a great deal of protection for our consumers. Who knows when we will have the next drought or the next flood? Who knows what crop conditions are going to be like next year with global warming and everything else that is going on and the crazy winter weather? Who knows? It is in our best interest to ensure that we have a farmer-owned reserve. I remember when the farmer-owned reserve came into existence. I remember the debate at that time. The farmer ought to keep the grain, not the processors, not the shippers, not the elevators. The farmers ought to have control over that grain and sell it when that farmer wants to. That was the whole idea behind the farmer-owned reserve. It had broad bipartisan support. Check the record. I am right. Republicans and Democrats across the board supported the institution of the farmer- owned reserve. There is no reason to do away with it. Yet, this bill, and the Lugar-Leahy amendment, does away with the farmer-owned reserve. My amendment simply reinstates it as it was. My amendment does not include an offset because the bill is well below the Congressional Budget Office baseline. The amendment would only constitute a continuation of the farmer-owned reserve as it was in the 1990 farm bill. It would not result in spending on the farmer-owned reserve above a baseline level. So, again, Mr. President, my amendment does two things to help farmers and consumers. One, it knocks out the provision of the bill that raises interest rates to farmers. I see the chairman is here. Perhaps we can have some discussion. I do not know why we are raising interest rates to farmers 1 percent when the Fed is already starting to lower interest rates and Treasury rates are going down. There is no reason for that. So the first part of my amendment knocks that out and leaves interest rates on CCC loans at cost of money. The second part of my amendment reinstates the farmer-owned reserve. I reserve whatever remainder of time I might have. Mr. President, how much time do I have remaining?

Mr. HARKIN. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. HARKIN. Mr. President, I send an amendment to the desk.

Mr. HARKIN. I see. I did not understand the process under which we were operating. I was not privy to those deliberations that went on late last night. Mr. President, let me say I do not even know what the Lugar amendment is, right now. It is probably OK. I just want to take at least a couple of minutes--I guess I have the floor--to raise my voice in protest against this process we are now undertaking. Agricultural legislation is serious business. It not only affects the farmers in my home State and farmers and ranchers all across the country, it affects consumers and affects people who live in small towns in rural areas. I have been here 22 years. I have been on the Ag Committee that long, 10 in the House and now 12 in the Senate. I have been through a lot of farm bills. I have never seen such an obscene process as what we are going through right now, and I use the word with its full import and meaning, ``obscene.'' The fact that we have before us a 7-year farm bill--I do not mind debating the farm bill and offering amendments and whatever comes out of this body, fine. That is the will of the body to do that. But, to be choked by a process that only allows several hours of debate, that only allows 10 amendments on this side, allows 5 amendments on that side; that only allows a half-hour evenly divided for any amendment--what kind of deliberative process is this? Is this the U.S. Senate? Or is this some Third World dictatorship, where somebody is trying to cram something through? I just want to say I protest to the utmost what we are doing here and how we are doing it today. Farm legislation deserves more than 7 hours. We can spend 2 weeks on a telecommunications bill, or longer. I do not know how long it took. We can spend days and days debating other things. But for perhaps the most important thing for farmers and ranchers and rural people, what do we get, 8 hours, 7 hours, to debate and amend and try to fashion a bill? I am sorry, this process smells to high heaven. I have some amendments I am going to be offering, but I want to make the record very clear I object to the way this bill is being pushed through, the way we are being choked off and strangled in this process. The Senate deserves better.