Howell Heflin

Mr. HEFLIN

Mr. HEFLIN. Mr. President, last evening, Senator Santorum laid down two amendments that were to be voted on, as I understand, around 11, but because of some problems with some of the Senators, it probably will be delayed for a while. But as I understand it, unanimous consent has been granted for us to debate between now and that time the peanut amendments that have been laid down. So I want to take advantage of it. I understand that the author and proponent of the amendments knows of the unanimous consent, and I will be glad to divide time if he wants it. But whatever it is, we can accommodate Senators equally with the time. There are two amendments. The first amendment, I understand, that will be called up is one in which he alleges there is a conflict of interest in regard to the peanut program by the fact that co-ops and marketing associations which are run by farmers are involved in the administration of the peanut program. We understand there has been filed with the Department of Agriculture various letters by a law firm or law firms here in Washington in which it is anticipated there would possibly be some lawsuit pertaining to this matter. We feel that is an issue which ought to be determined by the courts. We have contacted the Department of Agriculture. The Department of Agriculture tells us they have authority and they constantly monitor it. They have a responsibility that is carried out to see that there are no conflicts of interest. The idea that farmers participate in carrying out the program is universal. You have committees composed of farmers that are elected at the county level to carry out the program. There are State committees composed of farmers that carry out the program. It is a matter that farmers participate in, the theory here being that at the local level they know the local problems and that they are better equipped than Washington. This seems to me to be a program that has been carried out for years to allow for those who are closest to the farmers to understand the individual problems of farmers and to work them out. Therefore, the concept of contracting out, the concept of local government, the concept of no big Government in Washington is carried out in regard to the present program if there is any problem that is involved. The Department says this is entirely unnecessary. They administer the program. There is no conflict of interest. They audit. They monitor. They carry on in a very proper and businesslike manner if there is a matter that ought to be determined, such as a court case that may arise in regard to this program. Certainly, right now we have a situation where we are in the middle of a growing season. We saw that the peanut program was reformed. There was some matter pertaining to a substantial cut, some cut that amounts to about 30 percent of the revenues that go to the peanut farmers, and we ought to allow it to work. So I think this is a matter that is unnecessary. If it is, then it is across the board in every commodity because the farmers are on committees. The conservation committees have local participants in every county. I see that Senator Santorum is here, and if he wants some time--and I see also Senator Coverdell is here--I will be glad to yield the floor at this time. I will reserve my 2 minutes before the vote is taken as we had in the previous unanimous-consent agreement. Mr. COVERDELL addressed the Chair.

Mr. HEFLIN. Do I get my 4 minutes?

Mr. HEFLIN. Does the proponent seek to go first with his 2 minutes?

Mr. HEFLIN. Mr. President, there is a little confusion as to which vote will be held, but I have to call this Santorum amendment the confusion amendment. We have, of course, argued in the past that we reformed it. And we have reformed it, the peanut program. But now we are having here, where the Senator from Pennsylvania argues that, since other commodities have a payment limitation, therefore peanuts ought to. First, the confusion is that peanuts have never had a payment. They have not had a payment. The confusion here is that he is confusing a loan program with a payment program. You had deficiency payments, which were based upon a target price in all the commodities. But peanuts never had that. And that is where the limitation was on, was on the payments. Now you have, under the new farm bill, direct payments. You do not even have to plant in order to get your payment. You preserve your history. But the limit there is on the direct payment, the money that comes to you, the mailbox money, regardless of whether you plant or not plant. And there is a confusion there. The loan program is a program which has been designed over the years to help temporarily. When a farmer says, ``All right, I need the money, I have to pay my bills, I put it in loan and therefore I take the chance. If the price goes up, I will sell it at the time I think is the most appropriate time in order to sell.'' That is a loan basis. In regards to this, we show over the years----

Mr. HEFLIN. I ask unanimous consent for 30 seconds.

Mr. HEFLIN. Mr. President, this chart shows the loan rate in blue over here. Throughout the years, the farmer's price, the market price has always been above the loan rate. So it is a matter being confused relative to this matter. Therefore, I urge that we vote against this matter and not be confused. New farmers are coming into the program all of the time, which shows that 10,000 have come into the program over the last 10 years. I thank the Chair for giving me the extra 30 seconds.

Mr. HEFLIN. Mr. President, the largest law firm in Washington, DC, is trying to have a lawsuit, and this is in connection with the lawsuit. If there is any problem, it ought to be determined in the lawsuit. The Department, for years, has had participation by farmers in every phase of the program. You elected farm committeemen to the old ASCS, which is now the Farmers' Service, and they carry out the program. They make decisions in regard to it. The Soil Conservation Agency has district commissioners that are elected, and they carry out the various programs. That is nothing different. The Department says this is unnecessary. They have, over the years, developed guidelines to ensure that there is no conflict of interest. This is just another attack on the peanut program with an effort to try to have a lawsuit, and these people have hired the biggest law firm in Washington to bring the lawsuit. They have filed a protest letter and involved that. The program is now in operation. The farmers have gone to the bank, they have made their plans, and they are moving forward. Now is not the time to change it. So I urge you to vote against this amendment.

Mr. HEFLIN. I move to lay that motion on the table. The motion to lay on the table was agreed to. Amendment No. 4972

Mr. HEFLIN

Mr. HEFLIN. Reserving the right to object, I sort of feel like some of these things are a little complicated. Could we have, on peanuts, 4 minutes equally divided instead of 2?

Mr. HEFLIN. First two. We have eight.

Mr. HEFLIN. If they come up. If we can get everyone to agree to a 4- minute time agreement, maybe we could finish tonight.

Mr. HEFLIN. Mr. President, let me say that one aspect of his argument was agreed to in the recently passed farm bill, when he talks about these people who had quotas and lived in Boston and farmed in Alabama. There was a provision in the farm bill where production was shifted to the family farm, and that was one of the accomplishments that the Senator from Pennsylvania brought about. He has already brought about several changes in this bill which was in the farm bill. The production will shift to the family farms. Public entities and the out-of-State nonproducers are ineligible now for participation in the program. What he was talking about, in giving his illustration, he has already accomplished. So that argument, I do not think, is applicable to this amendment. Originally, the amendment had a $40,000 figure on it. We figured up at 2,500 pounds of production per acre that this would come out to about a farm of about 52 acres, and the national average of the peanut farmer is 98 acres. But he then, in effect, by raising it to 125, has tripled it, which means that basically he is talking about a farm of about 156 acres which would be involved. The Senator from Pennsylvania confuses payments with a loan. They are two separate and distinct things. You put a commodity in loan; therefore, it is sort of like going to the bank, you get some money. But the commodity is in loan, and it is designed for farmers to use in order that if the price goes up, then they can make money. It is a sort of hedge. The loan program is a Government program designed to allow for generally and, in most of the commodities, for 12 months that it stays in the loan. During that time, the price may go up and down, and the farmer can choose when he wants to sell. It is sort of an aid and assistance, it is not a payment. Payment limitations, as we have it, have been in the past, up until this farm bill was passed, a limitation on what is known as target prices in a deficiency payment, and that is where the limitations came in as to how much a farmer could draw relative to a deficiency payment. For example, in cotton, there was a target price that they hoped a cotton farmer might be able to obtain in order to be able to meet the cost of production. As I recall, up until this year, it was 72.9 cents a pound. If the cotton price per pound fell below that price, then that deficiency payment paid the difference between the market price and the target price, but there was a limitation in that. Loans are different. They are not any type of limitation relative to that. It is a different situation. Now the farm bill came along and we have a contract price, and there is a limitation relative to contract price. But peanuts have never had any deficiency payments. It has only had a loan; therefore, it is entirely different. You are mixing apples with oranges here, and, therefore, it is a confusing situation. In regard to peanuts and the fact that he is talking about these people who have these quotas and they do not farm, that is more of the factor of what is known as tenants or leasing. In regard to all of the commodities--these are based on the Bureau of Census figures--actually there are more farmers who farm their land in peanuts than there are in wheat, than there are in soybeans, than there are in cotton. So that argument relative to that, I think, is one that is just misunderstood and a lot of people misunderstand it because of the fact of quotas. In regard to price, this next chart shows the relationship between the peanuts and the peanut support price and the farm value and the retail price of a 16-ounce jar of peanut butter over a period from 1984 to 1992. That is basically the same as to the present time. The blue shows the support price. The red shows the farm price. And then the green here shows the retail price. Well, note that really that in the loan price, it has always in each of these years been lower than the farm price that they got on the market. In none of these years has it been where the loan rate of where the Government is involved in it, with the payment--that could be made in the event that the peanuts have defaulted to the loan to the CCC--but in all of those years, the price has always been above the loan rate where he wants to put a limitation in regard to it. So again, that is a misunderstanding of the program as it has occurred over the years relative to this. Then the argument is made that you have to have a license to sell peanuts in the domestic market. I think you find here that this is a chart which shows that we have had a substantial increase from 1986 now here to 1995 of the number of new farms that receive quotas. Farmers have easy access into the peanut program. More than 10,000 new farmers received quotas under the peanut program over the last 10 years, proving the point that the program is not closed to outsiders. And so we have had a situation that has developed over the years that has shown that you can grow peanuts, you can start growing peanuts, you can gain quotas, you can do it. And the people that grow peanuts can sell in the U.S. market. There is, in regard to the national eatable market, restrictions relative to that. But as to the other aspects of it, they can be sold. And you do not have to have a license. You can start growing additional peanuts today anywhere you want to. There are many farmers that are doing that that have started growing it. In the new farm bill that we had, the peanut is open to new producers, more so than even in the past. Access to the program has been made easier for producers desiring to grow peanuts. So I think there is some confusion. I think, No. 1, that the Senator from Pennsylvania is to be congratulated relative to the fact that out-of-State people in these nonentities, that are public entities, that held it before --he moved and was able, with the help of his staff, to get that changed. But we now find that we are in a situation where I think there is confusion here, particularly on a payment as opposed to a loan. They are just two different things. He wants to limit the ability to use the loan. And what he is saying, in arguing on all the rest of the commodities, they have a payment limitation on Government payments to them. So I think there is a distinction there that has sort of been overlooked relative to this. So we are really talking about small farmers here, when the average peanut farm in the country is 98 acres. And we are talking about here at the utmost this would apply to a farm of about 150 acres. And those are not big farmers, the people involved in it. They are just slightly above what is the average farmer in this country. I yield the floor. Mr. SANTORUM addressed the Chair.

Mr. HEFLIN. Mr. President, I move to reconsider the vote, and I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. HEFLIN. Put my name down for an amendment on dairy.

Mr. HEFLIN. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. HEFLIN. Mr. President, I rise in disagreement with the Senator from Pennsylvania. I do not want to prolong this, so I will make a brief statement. I assume the distinguished Senator from Pennsylvania was speaking of the amendment he had at the desk, No. 4962, which was the prohibition on purchase of quota peanuts for domestic feeding programs. I assume that is what he had. He was talking about the School Lunch Program. As I understand it, he was saying that, because of the program, the Government has to pay twice the world price--twice as much for peanuts that go to the School Lunch Program and other programs that the Government might be involved in. Unfortunately, I believe that the distinguished Senator is not really familiar with the School Lunch Program and the other USDA commodity distribution programs. We have a chart here that I will point out briefly, which is based upon USDA calculations. This chart here is designed to show the manufacturer's cost, based on USDA figures, of two jars of peanut butter, both being the same size, both being generic. This chart shows that the manufacturers are able to make and sell peanut butter to the USDA School Lunch Program at 81 cents a pound. Yet, consumers at the market would pay $1.87 a pound. Eighty-one cents doubled is $1.62. So already when you have a program by which the manufacturers, in effect, bid against each other for the school lunch purchases, it ends up that there are considerable savings. I would like to point out the pack of peanuts and the jar of peanuts. This chart was prepared before the bill was passed dealing with the farm bill which had the peanut program and in which the peanut program was substantially reformed. In fact, it was reformed to the extent that it is about a 30-percent cut to the producer. But this is where it was prior to that time. A bag of peanuts that cost 50 cents is 99 percent peanuts. This is the jar of peanuts, and of peanut butter, which shows that the farmer was getting 7 cents out of the 50. Then on peanut butter where it is 90 percent peanuts, the farmer was getting 54 cents. That would have been $1.64, and then 44 cents in addition to that, which would be $2.08 for a jar of peanuts which had 90 percent peanuts. But with the cuts that have now taken place under the farm bill and under this reform, you would have to take away 30 percent, which would show 4.9 cents that the farmer got. And here, in regard to the 30 percent, it was changed; the farmer, instead of getting 54 cents, is going to get 38 cents. There has been a lot of talk that there would be pass-ons by which the savings would be passed on to the consumer. The GAO, in a study, consulted and talked to the manufacturers, and the manufacturers had indicated that they could not guarantee any savings would be passed on in that the money would be used to develop new products and advertising. It is sort of interesting what has occurred recently in regard to cereals. This is not about peanuts but about cereals. Corn and other grain prices today are at an all-time high. Corn, for example, was at a 5-year historical average of $2.30 a bushel, and the price today on corn is $5.35 a bushel, which is substantially more than double. But yet, the cereal manufacturers have recently reduced the price of their breakfast cereal by as much as 25 percent to 30 percent. I think this demonstrates that there is very little relationship between what the farmers are paid for their commodity and what food products are sold for at retail. So, therefore, it ought to be plain that any savings to the manufacturers through reduced or capped costs on the farmer would not translate into savings to the retail consumers. To give you some idea as to the cost, we have a chart showing what a jar of peanut butter sells for in the United States, being an 18-ounce equivalent jar of brand name peanut butter, not generic. It sells for $2.10. These are USDA figures. In Mexico it is $2.55, and so on. Actually, ours are the lowest in the world and by far the safest. There are matters pertaining to inspection of foreign peanuts coming in that raise questions concerning food safety because there is a problem that is known as aflatoxin, and aflatoxin in the United States is controlled. It is a disease, and it is such that can cause cancer. But the peanuts that come in from foreign countries do not have the standards that we have in the United States. I could go on, but I do not want to unduly take time to talk about this. The matter of peanuts could be discussed for a great while. The peanut program has been substantially reformed. The Department is now in the process of implementing the law. I just do not believe that we ought to move at this time to try to change it. Let us see what is going to happen with the program. So I would say that this is not the time. Most of the peanut farmers have gone to the bank, and they have made their loans. They have made their plans for the year. They have signed up relative to the crop insurance and other things. Now in the middle of a crop year, I just do not believe is the time for us to be changing the peanut program. I appreciate very much the fact that the distinguished Senator from Pennsylvania is not planning to offer the amendment. I yield the floor. Mr. President, I suggest the absence of a quorum.

Mr. HEFLIN. As I understand it, this has been shown to the Department of Agriculture, and they have reservations pertaining to this. They are in the process right now of probably becoming involved in a lawsuit. Therefore, they object to it, and because they object to it, I cannot agree to it.

Mr. HEFLIN. There are marketing co-ops. There is the Virginia- Carolina peanut growers marketing cooperative and the Georgia-Florida- Alabama co-op, and the Southwest peanut growers co-op, who are allowed under the USDA regulation to enter into various activities pertaining to the operation of the peanut program. In regard to this, it is my understanding that the manufacturers are in the process of having a lawsuit pertaining to this issue. They have filed a protest letter to the U.S. Department of Agriculture, but the issue over the years has been worked out with the co-op with the U.S. Department of Agriculture in such a manner as to be within the purview of the ethics rules and regulations. And therefore the concept is not a violation of a conflict of interest. The associations and co-ops are closely supervised by the U.S. Department of Agriculture personnel. They have extensive in-house audits by Government officials, which are conducted each year. It results in cost savings to the Government because the operation is contracted out. These are conducted in small towns where the cost is less than it would be if operated in Washington. Now, there have been large groups of merchants pertaining to it that have attempted to bid for these positions and to qualify to administer the program, and that has been several years ago, but they did not qualify pertaining to this matter. This is a matter that if there is any violation or any conflict of interest, in our judgment, it ought to be determined by the courts rather than by the Congress at this time, because there is a law firm that is very much involved. They have already filed some letters, and they certainly are in the process of working themselves into a court case pertaining to this matter. But under it, the U.S. Department of Agriculture has clearly looked at this over the years, and they do not feel that this is any violation of any conflict of interest.

Mr. HEFLIN. We can consult with the Department of Agriculture before any agreement relative to this matter. As I understand it, this has been submitted to them and they have objections to it.

Mr. HEFLIN

Mr. HEFLIN. Mr. President, I move to reconsider the vote.

Mr. HEFLIN

Mr. HEFLIN. Mr. President, I would like to take a moment to enter into colloquy with the distinguished Senator from Alaska, my friend, Mr. Stevens.

Mr. HEFLIN. First let me compliment the Senator on the excellent work the committee has done this year. This is an outstanding bill. I would also like to thank staff for their hard work and dedication. As you know, I have a keen interest in the Army's electronic maintenance programs. I would, therefore, appreciate a clarification of the guidance provided in the committee report dealing with the purchase of electro optic test equipment. The report directs the Army not to procure any sole-source off- vehicle E-O test equipment until the results of a study have been provided to the defense committees of Congress. My question is, Does this guidance restrict the procurement of variants of the Electro Optic Augmentation System, an on-vehicle tester?

Mr. HEFLIN. I appreciate the clarification of this important matter. I thank the Senator. white house communications support

Mr. HEFLIN. Mr. President, I rise today to offer an amendment to the Defense appropriations bill to enable the Department of Defense to initiate a program called Operational Field Assessments. The warfighter, as a result of lessons learned from Desert Storm, Desert Shield, and Bosnia, needs this quicker way of evaluating joint tactics, doctrine and procedures. The Operational Field Assessment is a nontraditional, field executed evaluation that pits the warfighter, that is the pilot, ship driver, or tank commander, against multiple threat hardware pieces, operated with changeable technical parameters, as would be encountered in a specific unified command's combat environment. The requirements to be satisfied and the scenarios to be executed are driven primarily, by a command intelligence element, working in concert with the command's operations personnel. It is patterned after the threat, conducted with a ``human- in-the-loop'' approach, and has no preconceived outcomes. The object is to learn from the experience. The Operational Field Assessment can be conducted on a large scale with multiple weapons and complex scenarios, or on a small scale with a few weapons and simple scenarios as required by the command. It can be executed jointly or in a combined environment with our allies. It involves a host of expert organizations; ranging from the various Scientific and Technical Intelligence Centers, owners of foreign material hardware, test ranges, research and development entities, and the services, to name a few. The DOT&E has assumed OSD advocacy for the OFA because the critical experience and expertise necessary to plan, execute, and evaluate the results of joint operational field assessments resides primarily in the DOT&E Office. The OFA program will also be invaluable in improving the future acquisition oversight of joint OT&E. The Director, OT&E, has created a MOU with Defense Intelligence Agency, the National Security Agency, and the National Reconnaissance Office to assist in support of this program. It is a new approach to provide our warfighters with valuable, needed, and usable intelligence information in an era when we must be smarter with our fiscal resources. Our warfighters need it and I fully support it. Due to the urgent requirement of this program, I urge my colleagues to fully support this amendment.

Mr. HEFLIN

Mr. HEFLIN. Mr. President, I rise today to propose an amendment designed to aid small business in this time of consolidation and reduced Federal spending. Over the last few years, as the Army has reduced its contracting personnel strength, I have seen larger and larger small business set-aside contracts. This process is known as bundling. Unfortunately, when the bundled contract values approach $50 million annually, the number of firms eligible to compete is greatly reduced. The pressure on small businesses is further increased by the Army's failure to place firm small business subcontracting targets in its unrestricted requests for proposals. My amendment would, therefore, require the Army to place firm small business, small disadvantaged business, and women-owned small business subcontracting targets in appropriate unrestricted RFP's. These subcontracts would then count toward the Army's small business set- aside goal. This amendment would not, however, increase the percentage of work being set aside for small business. As this amendment is beneficial to small business and will not affect the Army's procurement workload, I hope my colleagues will fully support it.