Richard Lugar

Mr. LUGAR

Mr. LUGAR. Very well. We would like to hear the Senator from Minnesota speaking on his amendment, of course, but I, on behalf of our side, thought I ought to interject this comment at this point.

Mr. LUGAR. Reserving the right to object, and I will not object, my objection immediately to the Senator from Minnesota was that perhaps, as opposed to having a stacking of amendments, all on the Democratic side--and admittedly yesterday we debated Republican amendments all day--is that there are a number of Republican amendments. Could we get perhaps some alternation?

Mr. LUGAR

Mr. LUGAR. I suggest the absence of a quorum.

Mr. LUGAR. Mr. President, I will not add to the frustration and discomfort of my chairman except to empathize with him, having stood in a similar situation 5 or 6 years ago when we last proceeded with the farm bill. I found it was seemingly an endless task. It does finally come to conclusion. That will be good news for the chairman. I will work with him to try to identify the amendments so we can have appropriate debate and votes. Both the chairman and I realize we are near the end of the session, and conference reports on important bills are likely to intrude. The chairman recognizes that. He stated correctly this is the pending business. It ought to be our pending business, aside from the privileged motions on appropriations bills that the leaders have designated for debate on Monday and early Tuesday. I believe there probably is a finite set of amendments. I suggested earlier during the day that we will compile a list of 44 at that time. I think some of those perhaps disappeared in the course of the day. Hopefully others do not emerge. But I think there are some basic issues involving payment limits, for example, that are still out there. Perhaps some are not parochial interests but interests of particular Senators in their States, such as, for example, the distinguished Senator from Oregon, Mr. Smith, with a legitimate basin problem not requiring much time, although the Senate may or may not agree with his point of view. Even if these are simple amendments, perhaps they will not be offered in the event they are already accepted. Perhaps the chairman and I will be able, with staff, to work together to see which amendments can be accepted. We have been engrossed in very heated debate on sugar and on dairy-- things that claimed our attention at the time so that we have not really sifted through those things that are perhaps acceptable. But in the course at least of the next couple of days of debate, I think the situation will become more clear. The chairman knows I have a number of problems with the commodities title. I have already expressed those in the form of one amendment and others. The chairman is also correct that we did reach remarkable accord on at least eight titles, perhaps nine. My memory fails as to how many are in our bill. But those are good titles to this piece of legislation. It doesn't mean that others may not at least insert lines in them, and they may do so, but at the same time they are in fairly solid shape. The commodity situation is one that is bound to be of controversy because it has money attached to it. Nevertheless, we will have to reach decisions. I pledge to work with the chairman to do that. I will offer at least I hope comfort this evening and the belief that the chairman's day tomorrow will be a better one. I yield the floor. Mr. President, I suggest the absence of a quorum.

Mr. LUGAR

Mr. LUGAR. If I may respond, Madam President, with the disposition of the Domenici amendment, the next amendment--at least on our side--that we are prepared to offer is that of the distinguished Senator from Missouri, Mr. Bond. Then Senator Burns has an amendment that he wishes to offer, Senator Murkowski has an amendment, and Senator McCain has one. These are ones that are clearly identifiable at this point. Senator Burns may have more than one amendment, but he will commence in this batting order with his initial amendment.

Mr. LUGAR. Madam President, I am pleased to be a cosponsor of an amendment that I think is truly important. The majority leader certainly outlined the basic reasons for it. But let me illuminate further. From hearings we had before the Agriculture Committee in recent years during the period of time when I was privileged to serve as chairman, in each of those years we asked for reports from those responsible in USDA on progress in the area of civil rights disputes. There were so many. They were so complex and pervasive, and the backlog always seemed to be unusually and uncomfortably large. Just last year we had an extensive hearing, and this came because the Secretary of Agriculture, then Dan Glickman, our former colleague from the House who had become the Secretary, had taken a great interest in this issue as a Member of the House and likewise in his new capacity. He recommended, after following the lead of the Civil Rights Action Team of the Department of Agriculture, that the head of civil rights become an Assistant Secretary. I think this is an appropriate time, in the farm bill, as we project agriculture and its governance for the coming years. I would simply say that the reasons for civil rights problems at the Department of Agriculture appear legion, but they are not simply problems of committees in the field, often a point of dispute in the past, but frequently allegations of discrimination in the administration of the Department itself, which is something that is here in Washington--or at least very much under the control of those who administer the Department. Whatever the reason--and certainly some will say this is precedent for the appointment of a similar Assistant Secretary ad seriatim in Cabinet after Cabinet post--and I appreciate that argument that has been offered from time to time--this is, I believe, a fortunately unique situation. Despite the best observation in a bipartisan way in our committee, and even with the cooperation of the Secretary of Agriculture, we have not overcome. So I am pleased the distinguished majority leader has taken this initiative. I was immediately pleased that he asked me to be involved with this effort, which I am delighted to do. I think this is a constructive amendment, and I am hopeful it will find the approval of our colleagues. I yield the floor.

Mr. LUGAR. Mr. President, I appreciate the words, as always, of our chairman. My understanding is, in a couple minutes Senator Domenici will offer an amendment. After disposition of the Domenici amendment, we are anticipating an amendment to be offered by Senator Bond, and then, following that, an amendment by Senator McCain. In the meanwhile, amendments might come from the other side of the aisle. But these three amendments are known quantities with the Members who wish to be recognized as we dispose of the amendments. I thank the Chair and yield the floor. I suggest the absence of a quorum.

Mr. LUGAR. Mr. President, I rise in support of the amendment offered by my distinguished colleague from New Hampshire, Senator Gregg, which, as has been pointed out by all speakers, effectively phases out the subsidies provided under the existing Federal sugar program. Apropos of the comments made by my colleague from Wyoming, almost all farmers are supported by some program, as I attempted to point out this morning, and only about 40 percent of farmers in our country receive any benefits from all of these programs. I appreciate that colleagues find this difficult to believe, but nevertheless it happens to be the case. It is the case because historically programs arise attached to very specific crops. In the case of the row crop of wheat, corn, cotton, and rice and the evolution of things, soybeans have come into that category and there have been very special programs over the course of time established for sugar or peanuts, for tobacco, for wool and mohair. In due course, programs have come up largely through a sense of equity and disaster areas that have somehow touched upon so-called specialty crops. But after all is said and done, the farm bill essentially is a focused bill historically on program crops. Sugar is one of these. As a result, those who are involved in the sugar program are among the 40 percent who are beneficiaries as opposed to the 60 percent of American farmers who are not. Having said that, in the amendment I offered this morning I did not offer discriminatory comments with regard to the sugar program any more than other programs. Rather inclusively, I suggested that $1 of revenue from sugar ought to be treated the same as $1 of revenue, say, from honey or from wool or whatever. That would be true, in my judgment, for sugar farmers. If the farm does only the production of sugar, that is going to be the only item in the list. But, nevertheless, that sugar grower would have been entitled to a 6-percent voucher on the first $250,000 of value, 4 percent on the next $250,000. Admittedly, that would bring a certain amount of discomfort to a very small number of sugar growers. But, as Senator Gregg pointed out, a very small number receive 40 percent of all the money in the sugar program, as is the case again and again in agricultural programs as they are now. They go to a minority of farmers to begin with. A very small minority of that minority receive a disproportionate amount of the payments--such as, in the totality of things, 47 percent of payments going to just 8 percent of farmers. The sugar distribution is even more pronounced, with a vengeance. Therefore, the amendment Senator Gregg offers, a phaseout of these sugar subsidies over the course of a period until we get to zero in the year 2006. There is a transition that phases into the world market that has been discussed. I will touch upon that. It offers, at least, a glidepath out of this, given the fact we are not going to have a whole farm view but continue with very specific commodities because the program has had very unfortunate results, as Senator Gregg has detailed and that I want to underline. In essence, his amendment would phase out the so-called loan rate for sugar beets and sugarcane, reducing it to zero. Marketing allotments and quotas for both sugar beets and sugarcane would be eliminated beginning with the year 2003 crops. Senator Gregg's proposal would make the funding offset of approximately $1.2 billion over 10 years, according to CBO estimates, available to lift the shelter cap in place in the Food Stamp Program. So, in essence, Senator Gregg is moving this money, which is going disproportionately to very large sugar growers, to nutrition programs for the poor. Eliminating this cap, as the Senator points out, will help a large number of families whose actual housing and utility costs put them in a situation of choosing between shelter and food. This morning, as we discussed my amendment, I chose to offer a solution of roughly doubling the amount of money over the course of 5 years in food programs. Senator Gregg goes about this in a different way, given the loss of my amendment this morning. The Senate committee bill maintains, as it stands, many of the current sugar program provisions and, in fact, provides additional benefits that proponents have required as well. It eliminates the marketing assessment on sugar, reduces the CCC interest rate on pricing board loans, authorizes a payment-in-kind program, reestablishes the no-net-cost feature of the program, and provides the Secretary with authority to implement allotments on domestic sugar production. The loan forfeiture penalty on sugar also is eliminated. The taxpayer cost of all of this is expected to be about $530 million in mandatory new spending, above baseline, during the next 10 years. This is the CBO 10-year score. I mention that because there has been considerable discussion. Whatever may be the merits or demerits of the sugar program, the costs to the taxpayers is de minimis. Albeit, a small problem in the past year, but nevertheless this was an aberration, as suggested. But it is no aberration when CBO scores the sugar program in the Harkin bill as $530 million. That is real money, taxpayer money over the next 10 years. This is hardly a harmless procedure. There has been long debate about the effectiveness in the administration of the program. I wish to touch upon some of those problems as an illustration of unintended consequences of the sugar program. The U.S. Government, for many years, as all have pointed out, has subsidized domestic sugar production through a combination of price supports but, perhaps equally effectively, import quotas. That has led to, if we were discussing this in a foreign policy debate, some very serious problems. For example, throughout the 1980s, as this body and the President of the United States seriously talked about democracy in Central and South America and in the Philippines, the sugar situation arose every time. The countries were attempting to help find their way to the ballot box but then, fairly rapidly, due to some type of economic consequences in which the newly elected officials could be supported, they ran up against the fact that we restrict the amount of sugar imports to this country and restrict them rather severely. A so-called sugar quota system occurred in the world, country by country--literally of how many pounds each country was allowed to ship to us. It mattered not what the price was. The entire situation was carefully regulated. Why? Because those who had formulated the sugar program readily saw that if we were offering stimulus to production in this country at the same time mandating imports from other countries, a collision was going to occur--which has occurred, from time to time. But what also happened was that other countries around the world were prohibited, really, from the economic sustenance that those exports to our country would have meant for them. So on the one hand we talked about foreign assistance, foreign aid to these countries to shore up their fledgling economies and fledgling democracies, but not through allowing them to ship to us something of which they had surpluses and in fact produced at a fairly low production cost. Throughout this debate, the production cost, the worldwide cost has been mentioned at approximately 16.5 cents. But that is the average cost. That is almost saying there is some type of average cost for the production of corn in the United States of America, which means maybe approximately half of corn growers are more efficient than that. Some are very much more so, as a matter of fact. I mention this because some countries have a natural advantage in the production of sugar that we do not have. This is an acquired skill in the United States. Our problem, then, in terms of foreign policy, was exacerbated further, as has been pointed out, when we came into the NAFTA agreement. This is a serious problem on the horizon, not touched upon in great detail today but it would be by anybody in a sugar conference because we pledged to have a fairly free flow of Mexican sugar. This gets into other internal agricultural disputes because those who are producing high fructose syrup--and this is largely corn growers who are interested in this situation--feel badly treated by the Mexicans. They have protested in about every way, in all the various settlement fora, that they are being shut down by Mexican intransigence. Mexicans are replying: By the way, you are supposed to take our sugar. So to say the least we have a problem here between corn growers, if we were in that fora, and sugar growers. Likewise, our treaty obligations somehow are in some disarray when it comes to this issue. In any event, domestic sugar processors have benefited from price support loans that guarantee them at least two to three times the world price of sugar and sometimes more. We touch upon, once again, this price of sugar. And others have pointed out that the true average of 16.5 cents is the world price. I took a look at the Wall Street Journal this morning, and it is now somewhat less than 8 cents. It has not been a good week for sugar. The proponents at least of the sugar program point out that this is so-called dumped sugar and that what I and others don't understand is countries and big users contract with each other. Presumably the idea is that they contract at some price that must be adverse to their situation because clearly it must be higher than the world price. Apparently, do this year after year, and keep on doing it regardless of how far above the world price it is. For a commonsense listener of this debate, that listener might say: Why, just to test out the system, don't you just buy the 8-cent sugar? Why would you want to make a contract at 15, 16, 17, or 18 cents? The sophisticated sugar producer might very well say: Well, because that is about what it cost. And, by and large, that is where the bulk of it is if you have a big contract. You really need a lot. You need a certainty of supply. You need continuity of management, and so forth, as some have pointed out, and long-term contracts. But you don't look at the daily posting in the Wall Street Journal. But if you have something out there, I understand that. We have sophisticated discussions about sugar prices that involve all of these aspects of certainty. With regard to the pricing of various commodities, in my farm experience from time to time the starch company has suggested that, if I would guarantee a flow of corn month by month, which means that I would bear the storage costs and the problems of transportation and marketing, and what have you, they would be prepared to pay a premium for every bushel of corn well above anything that I could sell it for in the futures market, for example. Why would they do that? Because a guarantee of a certain number of thousands of bushels month by month with a fairly short haul and certainty in the neighborhood is valuable to them. I can well understand why people would come to contractual agreements on sugar that might be above the fluctuations of the world market at some point. However, for the domestic consumer of sugar--this includes others well beyond candy companies or those who are commercially involved in these operations--it would be attractive to consumers in the United States if they could consider the possibility of buying this dumped sugar. It is as inexpensive as the sugar that was not dumped. As a matter of fact, domestic producers say that would be unfair because our production costs are well above that cost. One can understand their argument on this despite the contracts which they claim to have made at prices that are much higher in a situation. But consumers are always helped by markets and by genuine competition. There is a lot of it out there. The suggestion is that somehow if we were seduced by the idea of 8- cent sugar and started buying, that suddenly it would be gone, and that it would be back to 16 cents. That is nonsense. My experience, at least in visiting people all over the world who are involved--in the Caribbean, South America and Philippines--is they have a lot of sugar. It would not just be dumped. It would come in a steady flow, and it would come at a cost that is substantially less than that which is now paid by consumers. We would have tax reductions across the board. It has the same effect as a drop in the price of gasoline, which we all applaud. No one, to my knowledge, is condemning Saudi Arabia for dumping gasoline on the American market. As a matter of fact, we want them to dump some more--as much as they can. We fear that our good fortune might end at some point; that the cartel might get together and somehow remedy the predicament. But for the moment, as consumers of gasoline, we understand the issue clearly. So should we as consumers understand the issue of sugar, a common substance used by most of us. I am saying in terms of our standard of living that our situation would be enhanced. It would be a tax cut through the Gregg amendment. For the moment, however, imports are restricted through quotas that are among the last remaining protection barriers in U.S. trade law. That, of course, means even with our barrier with Mexico with whom we thought we had reduced the barrier--the whole purpose of NAFTA--and despite claims that the sugar program operated at no net cost in fiscal 2000, the sugar program cost the taxpayers--not consumers but taxpayers--$465 million, according to the U.S. Department of Agriculture. That is a substantial sum of money. Furthermore, as we have heard, the Federal Government ended fiscal year 2001, the last year we were in, owning 1 million tons of surplus sugar, some of which is now given back to producers as payment for plowing up their growing crops. USDA projects that by decade's end, the Government will own not 1 million but 4 million tons of sugar acquired through this program-- through forfeiture of sugar pledged for collateral for nonrecourse loans under the program. Senator Gregg has said--and I affirm--that we cannot follow this indefensible path. Under our current international trade commitments, we must soon permit increasing imports and obligations under ``WTO'' and NAFTA, which, coupled with record high domestic projections, will result in a sugar supply far in excess of demand. A long-term and rational solution must be implemented in the near future. I compliment the Senator from New Hampshire for at least a bypass solution rather than an abrupt termination. The sugar program, in essence, is a transfer of wealth from many who are not able to pay-- low-income persons--to a fairly small group of producers, many of whom are, in fact, very large corporations and wealthy individuals. We are now talking about the sugar producers--not the candy companies that have been given some criticism for their wealth and their financial means. Nearly all other farm programs make transfer payments from the Treasury. Thus, the transfers--whatever their merits--bear some relation to ability to pay since they utilize funds generated by the progressive income tax. But the sugar program works just the opposite. Any tax on food places a greater burden on low-income Americans. Thus my point: Any decrease in the price, such as the ability of incoming shipments of sugar at the world market, serves as a tax decrease for the same reason. The sugar program ultimately must hurt consumers, despite the pledge that somehow stability is maintained, somehow that a moderate price is maintained, as opposed to prophecies that the price literally would take off if we were going to buy in the world exports at 8 cents. Finally, I would just say, simply, the price of all food that contains sugar would be affected in addition to the raw product. Sugar growers' own statistics show that in developed countries with access to this world-priced sugar--and I cite particularly our friends in Australia and Canada; these are countries that really have not been so inhibited in utilizing the world-priced sugar at these prices--retail prices in Canada and Australia are lower than in the United States. Only countries with protectionist sugar regimes--and that would include the European Union, of course--have consumer prices that are higher. If this were entirely an economic debate, it would be serious enough because we are talking about consumers all over the country in what amounts to a tax increase. And now this is augmented by actual Treasury payments in the hundreds of millions of dollars. Senator Gregg touched upon the Everglades. Let me go into this further. Sugar production on approximately 500,000 acres at the top of the Everglades has substantially contributed to the environmental degradation of the Everglades. In 1996, the Senate Agriculture Committee supported the inclusion of $200 million in that year to purchase lands in the Everglades agricultural area, simply to help in the process of restoration. This was a bipartisan effort and one which Florida Governor Bush called ``the linchpin of Everglades restoration.'' From my personal experience, for a variety of reasons, I was campaigning in Florida that year and was made well aware of what was a collision of cultures, so to speak. A very huge number of Floridians described the situation to me in detail. I went to the Everglades to see this degradation for myself, as well as the sugar plantations and all that was involved. People could have rationalized, in times gone by, that, after all, human beings should be supported in agriculture, that the spoilation of whatever was there had happened elsewhere in our country at various times in history, that it was too bad if additives to the crop: fertilizers, chemicals, what have you, floated downstream and even got offshore and created all sorts of ecological difficulties; that is the way it goes. And to seriously talk about winding this up, at this point in history, even if it meant that you could never restore the Everglades, or even the waterways of Florida, was really beside the point. But for many Floridians it was not beside the point. As a matter of fact, they proceeded to a very tough referendum campaign that was decided ultimately by a very narrow margin in favor of the sugar growers, not those who were in favor of restoring the Everglades. Thus, as a result of that debate, and in part because many of us in the Nation as a whole believed that this is a very important environmental project, the Congress has come into it in a big way to try to work with those in the State of Florida who still, in a fairly modest way, are trying to wind up the worst of the predicaments and wrestle with the history of the past. Let me just make the point, Members who are thoughtful about this sugar amendment need to think about the economics. I appreciate the problem is the Everglades, not North Dakota or Minnesota or sugar beets in the North. One cannot describe the same environmental catastrophes to those, and yet they are caught in the same economic problem. But we really need to consider the expenditures that are now going to be involved as the Congress, the President, and others, including the Governor of Florida, have become not only aware but determined, really, to turn around the course of history which ecologically has been disastrous in this situation. Clearly, we ought not to be doing, in this bill, what we are doing, I fear, with almost every other crop; that is, offering incentives for more production. And that, I fear, we are doing again here. One can say that, after all, what is sauce for the goose is sauce for the gander. If you are going to offer more incentives to corn farmers to plant more corn, why be sparing with regard to the sugar brethren at this point? I suppose there is a certain rough equity. If you are planning to simply overproduce everything, then, perhaps, consistency gets in the way here. But I would suggest that would be a mistake not only with regard to the sugar program but clearly with regard to the ecological and environmental consequences. The right move is to wind up the sugar program. Members have pointed out such amendments have been offered seemingly for time in memorial. During the 25 years I have served on the committee, I cannot remember how many sugar amendments have arisen, but they have come frequently, at least one every farm bill, usually with great discouragement to the proponents. I believe three farm bills back, if memory serves me right, a modest proposal came during the markup around the Agriculture Committee table. A Senator offered a suggestion that the loan rate be reduced by 2 cents. I think even in those days it was 18 cents or 16 cents. The suggestion was 2 cents be subtracted from that. That was roundly defeated. If it got three votes, that may overstate it. How could this be? Why such support of a reduction of such a modest amount? The fact is, around the table in the Agriculture Committee--and this is not news to the Senator from Delaware--many of us who are deeply interested in the crops and in the agricultural practices in our States have a feeling we have come to that table to protect whatever is there. Sometimes that is very difficult for Members. The case is tougher and tougher to defend as the years go on, but that does not deter most. Apologetically, we will say: I have to do what I have to do. I can be a statesman somewhere else, but not when it comes to sugar or peanuts or tobacco or even corn. I understand that. As a result, what I often have observed, in 25 years, is that those who have something to protect, as a matter of fact, make up a very large majority of us around the table. The situation would be--I think simplicity may be overstating this, but, essentially, if you are there to protect tobacco, you call upon your brethren who are protecting sugar or protecting peanuts or wool and mohair or indigo or honey or whatever the program may be--all of these programs have been highly suspect for years. From time to time, some have actually been wound up. There was good fortune in this respect a couple of farm bills ago when I think we finished the honey program. Wool and mohair certainly was gone, but it reappeared, not because of a farm bill but in the dead of night, in an appropriations bill at the end of a session, such as now, the proponents have managed to bring it back. So even around the table, when we make reforms, they do not necessarily stick. Therefore, I admire the courage, the foresight, statesmanship, and the wisdom of the Senator from New Hampshire in trying again today. He has offered a constructive amendment which is good for America. At some point we really have to think about that. We can become so parochial and so narrow in our focus that we believe that a very few growers of any crop, whether it be sugar or something else, are worthy of our utmost attention. But Americans generally listening to this debate, I believe, will find the equation I have offered a reasonable one; namely, we welcome the so-called dumping of oil by Saudi Arabia and others; we welcome the lower price of gasoline because our cost of living situation is helped. We would welcome, in my judgment, the purchase of sugar at the world price. We would welcome the fulfillment of our agreement with Mexico because that is so important not only with regard to agriculture but with regard to general trade and prosperity with our neighbor to the south as well as an enhanced standard of living in this country. And we welcome fulfillment of our WTO obligations because all of us want to export more of the things we do well in our States. We cannot withhold our obligations to recognize that in other places sometimes people do things well also, and our consumers benefit from those laws of trade. I call for support of the Gregg amendment and yield the floor.

Mr. LUGAR. I anticipate that the Senators will offer their amendment. They have been working on it, and I understand they are not prepared to do so today. Perhaps they will be prepared to do so tomorrow.

Mr. LUGAR. I respond, respectfully, to the Senator that at this point a finite list is not possible. But it may be possible sometime tomorrow. We are attempting to canvas. I have simply identified amendments that I think are significant, and the amendment the Senator identified would be, too. The two amendments that we have dealt with this afternoon have taken about 3\1/4\ hours and 2\1/2\ hours, respectively, so these were not insignificant debates, which Members on both sides of the aisle engaged in in a spirited way.

Mr. LUGAR. I have not inquired of the Senator as to whether he wishes to have a recorded vote. That would be his privilege and I would support that. I do not know the degree of controversy that will attend his amendment or how many Senators wish to speak on it.

Mr. LUGAR. I cannot respond to the Senator on that.

Mr. LUGAR. Reserving the right to object, my understanding--perhaps someone can advise me--is that Senator Gregg wanted to make a final argument. Could the leader offer at least a proviso of time for Senator Gregg?

Mr. LUGAR. At least we know there will be some activity. I want to speak on the sugar program. For the moment, I am prepared to yield to my distinguished colleague from Wyoming because I will be here for quite awhile, and to conserve his time so he might be heard, I yield the floor, and I will ask for recognition again.

Mr. LUGAR. Mr. President, I say to the distinguished colleague from Nevada in response, it is indeed my impression that following the debate on the sugar amendment, Senator Domenici wishes to offer an amendment, and then Senator Bond from Missouri will come in, and then Senator McCain.

Mr. LUGAR

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

Mr. LUGAR. Mr. President, I suggest the absence of a quorum.

Mr. LUGAR. Mr. President, I respectfully say to my distinguished colleague that the only well-thought-out aspect of the bill before us are thoughts as to how a Senator might be enticed by more money for particular crops for his or her State. It is a catchall bill. It really has no particular philosophy. One subsidy is piled on top of another. That is my point. Somebody has to bring an end to this chaos. The chaos is not going to be joyous if continued as the Senator from Iowa pointed out. Sixty percent of farmers get nothing from this; they are not going to get a dime. I hope that understanding finally comes through to agricultural America. This bill is targeted at a very few farmers. Forty percent at least have a chance; but as a matter of fact, as we pointed out numerous times, half of the payments go to 8 percent of those farmers who have a chance. And very sharply, large percentages go to a very few that fall behind the top 8 percent. In fact, by the time you get to the top 20 percent, 80 percent of the money is gone, even for that segment that is getting something. This bill has been a grab bag of trying to figure out how various Senators might be enticed into a coalition if a certain amount of money was promised, regardless of who it goes to--the size of the farmers and the problems of the farmers notwithstanding. I have tried to shake up the order and say that if we are going to distribute money, let us do so to all farmers, all States, all crops, all animals, as opposed to the very few that are clearly the targets of the bill that came out of the Agriculture Committee. The chairman is right. We have been doing it this way for almost 70 years. With increasing overproduction, increasing reduction of prices, this bill stomps down prices. They have no chance to come up. I hope there will not be any speeches next year on why prices are at an alltime low. Of course, they are going to be low. If you stimulate overproduction, they will go down every time. We have been doing that consistently year after year. To suggest that chaos ensues because you try to bring an end to this seems to me not very logical. I admit that it would be a total surprise to the country if all farmers shared, if all States shared--a remarkable surprise. I think it would be a good surprise, as a matter of fact. That is why I am suggesting what is admittedly a very large change. We are winding up the old and trying out a true safety net for all of us in agriculture. Let me respond briefly on the nutrition side. The distinguished chairman has pointed out what he believes are deficiencies in my approach. Let me say that, at the bottom line, we may not provide as much information about how you get the benefits, and perhaps that is a deficiency, but we simply provide more food, more nutrition for millions more Americans. That is pretty fundamental. The outlays in our bill are $4.1 billion, and the chairman's bill is $2.1 billion. That is twice as much food. In ours, the budget authority is 3.7 and his is 1.6--twice again. It is very hard to match the quantity of the service, the number of people being affected, by getting into the particulars. Having said that, I am perfectly willing to work with the chairman, as he knows, to try to find whatever deficiencies we can meet, making certain that all Americans know of the possibility for whole meals. That is our intent, to have a very strong nutrition safety net with the assistance of almost every group in our society; they have been working at this longer than the chairman and I have. I hope Members will vote for my amendment. I believe it is a significant change that will lead not only to less subsidization but to higher prices, higher real market values that come to farmers, with a safety net in the event there are weather disasters, trade disasters, and other things well beyond the ability of farmers to control. I yield the floor.

Mr. LUGAR. Madam President, I suggest the absence of a quorum.

Mr. LUGAR. Madam President, I ask unanimous consent that the time in the quorum call I am about to propound be charged equally against the two sides.

Mr. LUGAR. Madam President, I ask unanimous consent the order for the quorum call be rescinded.

Mr. LUGAR. Madam President, I yield to myself the time I may require. Being mindful there are others who may wish to speak on my amendment but seeing none for the moment, let me review the amendment for the benefit of Senators who, perhaps, followed the debate yesterday. I have offered an amendment which, in essence, changes substantially the ways in which farm families are supported in the United States of America. I have moved to a concept of a safety net in which, essentially, each farm family--regardless of the State, regardless of what products or farm animals or timber or what have you which comes from that farm--has equal standing. I think that amendment ought to be appealing to most States. As I cited yesterday, just 6 States of the 50 receive about half of the payments under the current system. That would be concentrated further in the bill that now lies before us. That concentration really occurs regardless of State, although many States receive very few benefits at all. If, in fact, 6 States receive about half, the 44 divide the rest and, as I cited yesterday, many States have fewer than 10 percent of their farm families who participate in these payments at all. I make that point again because I suspect it is not apparent to many Senators, to many people in the public as a whole, who believe we are talking today about the totality of agriculture in our country, farm families of all sizes. Much is said about small farm families, those who are in stress, in danger of losing their farms. Without being disrespectful of anyone's views on these subjects, I pointed out these small family farms are not likely to gain much sustenance from the subsidies that are being suggested presently. Let me cite, without getting into anyone else's backyard, the situation in the State of Indiana. The current program targets 16 percent of the payments in Indiana to 1 percent of the farms--1,007 farms. In fact, it becomes equally apparent at the top 2 percent, which gets 26 percent, a quarter of all the farms. By the time you get to the top 10 percent, which now includes 10,000 farms out of roughly 100,000 that received payments from 1996 to 2000, the top 10 percent receive 66 percent of all of the money. Any way you look at it, the reasons for this are perfectly clear. Essentially, the payments are made on the basis of acreage and yield. Those farmers who are strongest make use of research; they make use of marketing techniques. They, in fact, have costs that are less than the floor, so there are incentives to produce more each time we come along with another farm bill. And that will be the case again. Therefore, the gist of my amendment is we must change. The distinguished chairman of the committee, as he responded last evening, said the Lugar amendment contemplates so much change it will be shocking to country bankers; it will be shocking to farmers generally. When you knock the props out of all kinds of layers of programs that have been built up year after year, one subsidy on top of another, even if it only touched 40 percent of farm families generally with 60 percent not touched at all, certainly there will be an impact on the 40 percent. My point is the 40 percent overstates it. The real impact will be upon the 1's, the 2's, the very top numbers in terms of people who have very large enterprises. I think that is not the will of the Senate. But the effect of the policies has been this, as detailed State by State by the Environmental Working Group Web site. Any Senator, prior to a vote on this amendment, can go to that Web site and find out, person by person, every farm that has received subsidies during the last 5-year period that is covered, plus the summary I have cited. The change I am suggesting is one that is still a generous amount of taxpayer money. Yesterday Investor Daily editorialized about the debate we are having and commended my bill as the best of the lot but suggested it is still a lot of money from some taxpayers in America to farmers. Indeed, it is to the extent that I am suggesting a farmer receive a voucher worth 6 percent of all that he or she produces on the farm and that it not be simply curtailed to wheat, corn, cotton, rice, and soybeans but to livestock, to fruits and vegetables, to wool, to whatever comes from that entity--all things added up on the Federal tax return that arrive at a total farm revenue picture. I used the hypothetical farmer yesterday who received, say, $100,000 of total receipts from all sources getting a voucher for $6,000, enough to pay for a full farm insurance policy that guarantees 80 percent of the revenue based on the last 5 years. There are very few businesses, if any, in America that could purchase this kind of revenue assurance that would guarantee--given the ups and downs of our economy--at least 80 percent of the revenue would be available come hell or high water, including bad weather, bad trade policies, and whatever. This $6,000 voucher would not be paid for by the farmer. It is by virtue of the production indicated on the tax returns that he or she submits. It is possible, because we already have a generous crop insurance program as I pointed out that undergirds agriculture now, that not all farmers will take advantage of that, which is too bad. The educational process must continue so farmers understand how much insurance and assurance they could obtain under current legislation. My point is, we ought to be providing a safety net that has equality for all States, all crops, all conditions, and all sizes of farms and that genuinely meet the needs of a safety net as opposed to a haphazard disaster relief bill here or there on the appropriations of agriculture, and the perennial summer debates about supplemental assistance, that somehow there are shortfalls, even though this year we are having a record net income for all of agriculture--$61 billion. It has never been higher. Yet this debate proceeds as if the totality of American agriculture were in crisis. The 10-year bill suggested by the House of Representatives suggests the crisis inevitably goes on for 10 years adding one subsidy on top of another throughout that period of time. That is what my amendment tries to stop. I appreciate that for many Senators the problem of explaining all of this to their constituents may be difficult. The easier course may be simply to say: I did my best for you. As I witnessed the debate thus far, I have an impression that many Senators have come into that mode as they approach the distinguished chairman of the committee, or me, or other Members who have been involved in the debate. The question is not that overlayers of subsidies on top of subsidies is good for the country, good for farmers generally, good for the deficit, or good for whatever. The question is, what is in this bill for me, or my farmers, or the political support I can gain from the person to whom I can write that I was in there fighting for the last dollar for you. I must admit that the bill which has been laid down before us by the Agriculture Committee has a lot of money in it. The disillusionment will come that 60 percent of farmers will find there is nothing in the bill for them--nothing. I hope they understand that before we conclude the debate. In my State of Indiana, two-thirds of the farmers will find out very rapidly that there was very little left for them after the top 10 percent took the money. That will come as a disillusion, perhaps. But hope springs eternal, perhaps. A trickle-down theory might occur even in farm subsidy bills. Let me point out that there is an opportunity here for both a safety net for farmers and finally a turnaround from a policy that came in a long time ago with deep origins in the row crops coming out of the Depression but less and less relevant to the actualities of farming in America today and what people actually do. The 2 million farms that are listed by the census in most cases do not have active farmers on the farm. The most rapidly rising source of new farms in the country are persons who are professionals, doctors, lawyers, teachers, and others who purchase 50 acres, or sometimes more within a reasonable driving distance of their urban offices, or locations, because they like some space. If they produce on that entity of 50 acreas or 100 or whatever the acreage may be, at least $20,000 in sales of anything agricultural, they are classified under USDA standards as a farmer. So the 2 million are made up principally of persons who gain some income from the farm. The only persons who gain the bulk of their income from the farm are commercial farmers in America. Most of them have 1,000 acres or more. They comprise roughly 10 percent to 15 percent of all of the entities. Even on those farms it is usual that one member of the family has a day job in the city or somewhere else. That is the nature of the business. I mention this because, in an attempt to have a comprehensive farm bill, it is virtually impossible to target and to find 2 million people. I think my bill does this the best because it simply says whether you produce $20,000, and you are in fact a lawyer, you still qualify as a farm so that there is at least something more than a casual interest in the farm. If you have $20,000 in sales of any sort, you are eligible for the 6 percent voucher. My bill is not excessively generous as you rise in income because after the first $250,000 total revenue the voucher percentage drops to 4 percent to the next $250,000. After $500,000 to $1 million in revenue, it is 1 percent. Then sales on your farm over $1 million would not have the voucher. Thus, there is a limit effectively of about $30,000 for a farm family coming from this program. The distribution to all farm families in America in all States means that the money that is finally provided in my bill is spread even over a 10-year stretch. We are talking about a 5-year bill. Because many of these bills have been scored for 10, it is still less than the bill before us. But the cost of my bill in the 5 years we are talking about is dramatically less in large part because, although a lot of money is going to all the farm families at the rate of 6 percent of everything they are doing, essentially we are winding up the target prices, the loans, and the other subsidies on top of another. Therefore, as you subtract those savings, OMB has scored this 5-year experience in the commodity section of the Lugar bill of only $5 billion as opposed to, as I recall, the $27 billion for 5 years in the bill before us now. That is substantial money. Let me point out that in addition there are some important aspects in the second section of my bill. The distinguished chairman of the committee, as he responded yesterday, pointed out that the committee bill has much more generous provisions for the nutrition section. I applaud that. I worked with the chairman to make certain we had very strong bipartisan support for doing more in the food stamp area, in the WIC Program, in the School Lunch Program, and in the feeding of people wherever they may be in America. But there is a difference between the two bills--my bill, essentially, is the amendment before the Senate now--with some of the savings that come from this remarkable difference between $5 billion for commodities in my bill and $27 billion in Senator Harkin's bill. My bill provides $3.7 billion for nutrition in the first 5 years and the Harkin substitute $1.6 billion. That is a substantial difference. Yesterday, I detailed the extraordinary efforts of hunger groups throughout our country, of advocates not only for the poor but for better nutrition, of people involved in the School Lunch Program who regularly testified before our committee, as well as those who have been advocates for full coverage of the Women, Infants, and Children Program--the WIC Program--to fulfill those objectives. My bill allocates $3.7 billion in the next 5 years. If it were scored over 10 years, it would be up to $11.9 billion. The Harkin substitute has $1.6 billion in the first 5 years, scoring $5.6 billion in the 10- year period, with less than half the nutrition impact. That is not by chance. For Senators who believe one of the major points of a farm bill that comes from Agriculture, Nutrition, and Forestry ought to be the feeding of all Americans, in addition to targeted benefits for very few Americans on the production side, I hope they will find my amendment appealing. It was meant to be that way. The priorities are significant. For the moment, Madam President, I will yield the floor so I will have a few moments, perhaps, at the end of the debate to refresh memories of Senators who may not have heard all of this presentation today and may be preparing for their votes. I yield the floor and suggest the absence of a quorum.

Mr. LUGAR. Mr. President, my understanding is that I have a minute and a half, which is declining as time goes by equally charged to both sides. So as opposed to seeing all of that decline, let me say I am most hopeful we are going to have a strong vote for the Lugar amendment because I believe it is a good amendment for all Americans. I stress that because sometimes in our zeal in these agricultural debates we are doing the very best we can for those in agricultural America, and that may be in many of our States as much as 2 percent of the population. But the rest of America also listens to this debate and wonders why there should be, as in the underlying bill, a transfer of $172 billion over the next 10 years from some Americans to a very few Americans--particularly, if 60 percent of the farmers don't participate at all and if it is narrowed to those who have very large farms. Most Americans, when confronted with that proposition, don't like it. I am preaching today, I suppose, to the choir of all Americans and hoping that agricultural America also understands that if we are ever to have higher prices and market solutions on farms, we must get rid of the subsidies that are a part of the underlying bill. And I do that. At the same time, I provide assurance and a safety net which I believe is equitable to all farmers and likewise to all Americans who look into this and find at least some hope for farm legislation as we discuss the Lugar amendment. I ask for the support of my colleagues. I yield the floor.

Mr. LUGAR

Mr. LUGAR. Mr. President, I suggest the absence of a quorum.

Mr. LUGAR. Mr. President, I share the eagerness of the distinguished leader in wanting to complete the bill. For the moment, I am awaiting the presence of the distinguished Senator from Idaho, Mr. Crapo, who has one amendment on dairy. I anticipate his arrival imminently. After he offers that amendment and in the event it is still in order, I will offer an amendment that will amend the commodity nutrition sections of the bill. To advance the process, I will discuss that amendment pending the arrival of the distinguished Senator from Idaho. If he does not arrive, I will offer the amendment and let it be the pending amendment. As many of us have pointed out, current farm programs, including the program we adopted in 1996 and supplemental farm assistance programs we have adopted at least the last 3 years during the summertime, have encouraged overproduction of a small number of selected program crops; namely, wheat, corn, cotton, rice, and soybeans. The effect of our farm bills, intended or unintended, has been to encourage those who are in the five row crops I have enumerated to plant more. This should not have come as a total surprise because we have set incentives in our bill which make it profitable to do that. As I pointed out from my own experience in Indiana, if you send a bushel of corn to the elevator, you are guaranteed to get $1.89 because the last farm bill has a loan deficiency payment program that guarantees that. That has no relationship necessarily to the cost of production of an additional unit. So many farmers in Indiana, myself included, produce knowing that our cost for the marginal bushel is going to be less than what was meant to be the floor. The $1.89 was not to be touched. Of course, as more and more of us produce more and more corn, the surpluses grow, the price predictably falls, and given the size of the surplus, it stays low. Then people come to the Senate Chamber and point out, correctly, that prices are very low and, as a result, we ought to do something about that. And farm bills are passed to do something about that. The dilemma with the pending bill that came out of the Agriculture Committee is that, in my judgment, the incentives to produce even more have been increased substantially. Therefore, it is a large step in the wrong direction. If we adopt the bill out of the Agriculture Committee, we will, in fact, have low prices. They are almost guaranteed. Senators will say: But whether the low prices happen or not, that is the market. What we are talking about in this bill are payments for a bushel that have no relationship to the market because we are going to guarantee a payment that is well above the market, almost in perpetuity, whether it is a 5-year bill or a 10-year bill. That will provide new income to farmers, quite apart from what supply and demand either in this country or the world might suggest. I think that is the wrong course. As a result, I simply want to point out that caught in this cycle of low commodity prices that reinforce themselves, I tried to think through a different way of approaching this; namely, one that in effect accepts that we have markets that work and people ought to produce for the market price. In the event the market price is not adequate, they ought to produce something else. They ought to have a mix in terms of their farm situations, as most farmers do, or become much more efficient so the costs become lower than the market price and they make a profit doing that. I do not make that shift abruptly. There are a couple of years of phaseout. But the heart of the matter, in light of the amendment I am going to introduce, says instead of just the five row crops that are the focus of farm legislation and that lead to six States receiving close to 50 percent of all the payments, every person who is involved in farming, whether that person produces livestock or row crops or fruits and vegetables--whatever is produced on that farm, every dollar of that farm income counts. It is a level lie. We don't pick and chose, as historically we did from the New Deal days onward, for crops that became the so-called program crops, the focus of farm programs. In the event we were to adopt my amendment, all States are equal. All farmers are equal. It doesn't make a difference what they produce and they have the freedom to produce whatever will make a profit. They look to the market for whatever that may be. After they find that market, under my proposal, they add up--and their tax return will show--all the money that has come from all agricultural sources on their farm. They receive, up to a certain limit, a 6-percent credit or voucher from the Federal Government of the total value of what they produced. If their total production is $100,000 on the farm--say $40,000 from corn, $40,000 from soybeans, $20,000 from hogs--$100,000 of revenue, then they get a voucher for $6,000 with which to purchase a crop insurance--or really a whole farm insurance, more accurately, because now we are doing not only crops but livestock or anything else--whole farm insurance that guarantees that they will receive 80 percent of the average 5-year value that they produce. In essence, it is a safety net. It doesn't guarantee 100 percent of their average year by year, but says in no case can they dip below 80 percent regardless of weather disaster or export/import disasters or all the things that can befall agriculture in America. In other words, we leave behind target prices, loan rates, prices that have no relationship to the market. People produce for markets. They get credit for everything they produce, unlike the current system. And they have sufficient money to buy insurance that makes them whole--at least 80 percent, a 20-percent reduction being the worst that can happen in any farm year with that kind of coverage. I think this makes sense as a long-term farm policy for our country. It ends the cycle of overproduction, of stimulation from our farm bills. One could say this has not been all bad. In fact, if you own land then, in fact, it has been very good. Some agricultural economists do not prophesy a bubble in farmland, but many point out that the values of real estate, agricultural real estate, have leapt far beyond the income potential--largely stimulated, again, by Government payments and the certainty of these payments. Unfortunately, 42 percent of farmers who are involved in this program rent land. They are out of luck because, essentially, our programs build value into the value of the land--into the heightening of the rent. Mr. President, I am advised, happily, that the distinguished Senator from Idaho, Mr. Crapo, is available. As I indicated as I began this discussion of my potential amendment, I am very pleased that he has an actual amendment that he is prepared to introduce and discuss for the benefit of all of us at this time. So, therefore, I am prepared to yield to the distinguished Senator from Idaho for the purpose of his offering an amendment and his discussion of that important amendment.