Nick Smith

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I would like to talk about that. The fact is if we had real limits that would include what is called the generic certificate, which is the end run, the huge megacorporation type farms used to have the million dollar payments, then there is no question that we would have a lot more money. The estimate is between 2 and 4 billion additional dollars to do some of those things. I yield to the gentleman from Arizona, Mr. Flake, for he has had some concern about the tremendous expansion of government programs.

Mr. SMITH of Michigan. Mr. Speaker, reclaiming my time, would the gentleman help me remember and understand. I thought we had provision in the farm bill at one time?

Mr. SMITH of Michigan. Mr. Speaker, that might hit our family farmers that are producing sugar even more aggressively than the tariff rate quotas that we tried to develop to protect them.

Mr. SMITH of Michigan. Mr. Speaker, I hope the gentleman from Arizona (Mr. Flake) can stay a little longer so we can talk about some of these things. I just have a chart here following up on the gentleman's mention. Farm subsidies to 12 Fortune 500 companies rose by 82 percent, and here are farm payments from these big companies that probably bought some extra land, and then they sign up this land to get government farm payments. Farm policy should be designed to give these to family farmers, not John Hancock Mutual Life Insurance, Westvaco Corporation, Caterpillar, Chevron, Georgia Pacific, the Mead Corporation, International Paper, Archer Daniels Midland, Boise Cascade, Kimberly Clark, Eli Lilly, Navistar. These are the kind of companies that are making millions of dollars in their venture as a corporation, but still in effect robbing some of the money that otherwise could go to some more substantial programs, whether it be environmental and conservation, whether it be more money for agriculture research, whether it be more money for the small farmers that really need help. The gentleman from Wisconsin (Mr. Kind) has been a leader in trying to have a farm bill that better protects the environment, the conservation effort. I would ask the gentleman from Wisconsin (Mr. Kind) to give us the latest word on whether he is going to have a motion to recommit tomorrow.

Mr. SMITH of Michigan. Mr. Speaker, let me just briefly review, or sort of give the skinny on what I see happening in the farm bill. Senator Byron Dorgan, a Democrat of North Dakota and Charles Grassley, a Republican of Iowa, were the leaders over in the Senate that said, look, for the long run, long-term good of farmers and farm programs, let us put a cap on these multimillion dollar payments that are going out to some of these huge mega-farm and landowners. They said that there is enough votes in the Senate to recommit with instructions that we go back to the original Senate language on payment limitations. However, the rules are that if the House passes a farm bill prior to the Senate having the opportunity to recommit, then the Senate no longer has that opportunity to make a motion to recommit if the House passes the bill. I suspect that that is some of the reason that our leaders in the Conference Committee on Agriculture, our chairman, our ranking member, decided to bring this up even before CBO has completed their cost estimates to file the bill, to bring the bill to a vote tomorrow. In the process of recommitting this bill back with specific instructions, that first option goes to the Democrats. Normally, the ranking member of that particular committee has a lot of decision- making ability as to how that works. The gentleman from Wisconsin (Mr. Kind) has his motion to reconstruct that puts payment limitations on. Can the gentleman give us the latest? Will we find out later tonight whether or not the gentleman's motion is going to be offered?

Mr. SMITH of Michigan. Well, I would just call to all our colleagues and all staff that might be watching. There is not going to be any debate allowed on this motion to recommit that sets real limits that this House and the Senate has voted for. That motion will come up tomorrow. The failure to include real payments limits in the farming bill, I think, is an example of entrenched special interests frustrating the will of the majority. The conferees, generally the most senior Members of the House and Senate Committee on Agriculture have chosen to ignore public sentiment and congressional sentiment in both the popular vote in both the House and the Senate in favor of serving the largest corporate farms and major grain traders. They have also slighted I think our President, President Bush, who last August noted the plight of medium-sized farms, and he promised, and I quote again the President, ``One of the things that we are going to make sure of as we restructure the farm program next year is that the money goes to the people it is meant to help.'' Limiting subsidies for any single farmer is an idea whose time has come. If we continue with unlimited government payments under the farm bill for another 6 years, we will see increasing concern among the American people as farmers with huge land holdings with a lower marginal cost of production, pocket an ever-increasing share while more small and medium-size farms go out of business. The decision for extra production by the very large farmers should be based on the market, not on a guaranteed government price. The public expects farm policy to focus on helping average traditional size family farms. Congress should respect that. Mr. Speaker, I understand, the gentleman from Florida (Mr. Miller) is considering leaving Congress after this next term. He has been a strong voice in an area that usually has not had a voice, and so he certainly has the appreciation of me and many Members of this Congress in his willingness to speak out on some of these tough issues.

Mr. SMITH of Michigan. Mr. Speaker, that is sort of a cue to allow me to talk a little bit about how we are putting pressure on the small, traditional crop farmer in the United States. We passed my amendment to put real limits on and get rid of the loophole on a vote of 265 to 158, and we did that on April 18. At the time the House motion passed, the chairman of the Committee on Agriculture was quoted as saying, ``It will have no bearing on the conference,'' and true to his word, with the apparent consent of the Senate agriculture committee chairman, the conference report that came out yesterday keeps that loophole and bows to the interests of mammoth farms and giant grain and cotton dealers who want unlimited price supports and the resulting increased production. If we asked a grain trader such as Cargill, Archer Daniels, any of them, they tend to make their money based on the amount of product going through their system, so the more product they have, the more money they have. So these conferees were under tremendous pressure not only from the huge farmers in the megafarms, but also from the grain traders and cotton traders that have an advantage with having unlimited payments and unlimited price support. Now, let me tell Members briefly how the loophole works. Nonrecourse marketing assistance loans allow a farmer the choice of repaying commodity loans at low local market prices. As an alternative, a farmer can forgo loans entirely and simply take the difference between the loan rates and the low market prices as a direct cash payment. That is called a loan deficiency payment, an LDP. Both marketing loan and the LDP benefits are capped in current law. They are capped in this bill. Many in the agricultural community, I will use the word ``hoodwink,'' hoodwink many in this Chamber and many Americans by saying, look, we have a cap on payments. But the fact is that there is a loophole. That loophole lets the farmer get around the limits through the use of commodity certificates. Here is how it works: the generic commodity certificate was initially an innovation aimed at preventing a buildup of forfeited commodities in government warehouses, so with a nonrecourse loan, a farmer can give title of that commodity to the government. The government will give a loan to that farmer, and the loan will represent the price support that is offered through the LDP, or a marketing loan program, so there are the same benefits in terms of the money that farmer now has. Where we can limit the amount of cash that can be given to the farmer with the marketing loan or the loan deficiency payment, we do not limit; and the law allows USDA, the U.S. Department of Agriculture, to give that farmer a generic certificate to buy other commodities that will result in the same price support benefits as if they got a loan deficiency payment. So it is a loophole. That is why we have so many of these farm operations receiving millions of dollars in payments every year at the same time that some brag that there are payment limits and payment caps in the proposal. The conferees said, well, we will put in language where we will study it. Here is what the study is supposed to analyze. Number one, what kind of effect will it have on the grain trade and the cotton trade? Well, the effect is going to be if we do not encourage more production, there is probably going to be less production. That means the grain trade is going to have a few less bushels and pounds going through their system, so it is probably going to have a little negative effect on their trade. But what happens to the price farmers get? With lower production, the price farmers get goes up, and we can help many of those family farms around the United States and that green and open space, as we talk about the environment. We can preserve that land and keep it in agriculture, instead of paving it over for development and housing projects. Our goal and our policy in this country should be to help family farms, the traditional family farms. It should not be to give a disadvantage to those family farms. That is what we are doing. We are saying to this huge farmer that has a lower cost of production, we will guarantee you a payment that more than covers your variable costs. So that farmer says, well, look, I have this protection, so I am going to farm the farm program as much as I farm the market and the soil, so they end up overproducing. That overproduction is getting us into real problems because that is part, with our current ability to distribute that food around the world, that is part of our problem in bringing prices down to the farmers. That is why we are working in the bankruptcy bill to make it a little easier for farmers to try to re-form their farmland and have the provisions of section 12 in the bankruptcy code. Mr. Speaker, I yield to the gentleman from Florida (Mr. Dan Miller).

Mr. SMITH of Michigan. Really, that is essentially through taxes, but an increase in the cost of their food. If you add to that maybe some production that the market is paying more than it otherwise would, than there is even additional costs.

Mr. SMITH of Michigan. Mr. Speaker, I wonder if it is appropriate, during a Special Order, to have a parliamentary inquiry. Is there even reproductions of the farm bill that are available for the Members to read?

Mr. SMITH of Michigan. I thank the Speaker. So here again is a real problem of asking us to vote on something that we are not even going to be able to read. If they give it to us at the last minute tomorrow morning, it is my guess that we are looking at a bill that is 3 or 4 inches thick, almost impossible, even with a group of staff, to try to wade through to find really what was stuck into this bill at the last minute for whatever reason.

Mr. SMITH of Michigan. Mr. Speaker, I am going to spend some minutes talking about something that I think is very important to this country, certainly important to farmers. That is the new farm bill. In 1996, we passed farm legislation that was called Freedom to Farm. It was actually a program that phased out government farm program payments, and the challenge that we are facing in this country, almost everybody wants some of those open spaces, almost everybody in America would like the opportunity to have fresh products. In America, we appreciate the fact that we have the most healthy, the most low-cost food in terms of a percentage of our take-home dollar of any country in the world. The Freedom to Farm Act passed in 1996 gave farmers a farm payment in 1996. The total payout amounted to about $6 billion. It phased down the payment for each of the next 7 years, in a sense, telling farmers in the United States that they are going to have to start producing for the market, not for government programs. They are going to have to make their best guess on how much of what crop to plant based on the information they have for the marketplaces. That is the way that the system in America has always worked. That is why we have surged ahead economically. We had a system when our Founders wrote the Constitution, that the people that work hard and try and are most efficient and learn, and put that learning to use end up better off than those that do not, and that has been part of the motivation in our economy. And it has also been part of the reason our farm industry has become probably more efficient than any other country, and we are competitive in almost every commodity. If there was an open playing field, we probably could compete effectively with most countries. We are now making a dramatic change to make farmers dependent on government farm payments, and we do this in a couple of ways. We encourage more production which brings down the price of the commodity that they sell, and we say to the very huge mega-farms and large landowners with 20,000 acres of farmland or 80,000 or 120,000 acres of farmlands, the giants, the corporation-type farms, that we will give them a government price support check for every bushel of grain that they produce and every pound of cotton that they produce. What reaction does that have in the marketplace? It is going to mean that there is going to be more production, and the challenges are that more production is going to result in lower prices. We now find ourselves in the midst in a battle for democracy. Even as the President works against the undemocratic axis of evil, he may want to take a few moments to counter some undemocratic currents in our own Congress. At the conclusion of the conference on the farm bill reauthorization that was just completed, H.R. 2646, the conference report was filed earlier this morning and it is on the floor tomorrow, I think it is clear that the conferees have defied the will of both Houses of Congress by perpetuating these unlimited farmer subsidies which will allow farms to draw millions of dollars in price support payments. By giving these very large farms this kind of unlimited guarantee of a government price support, they can farm the program rather than farm the products of their soil in relation to the marketplace. The purpose of subsidies since farm programs began back in 1933 has been to protect family farmers. It was a mistake to get into the business of subsidizing every single acre and subsidizing every single bushel and every single pound of production, regardless of the producer's size and income. operations to get bigger and bigger. About 82 percent, Mr. Speaker, 82 percent of all farm production subsidies now go to the largest 17 percent of farms. I would like to take a moment, Mr. Speaker, to invite any of my colleagues, both who support unlimited payments and those that do not support unlimited payments, to come to the floor to talk about this issue, because tomorrow we are going to have a recommit vote of the agriculture bill. We are going to talk about the agriculture bill, and then there is going to be a motion to recommit with instructions that some of the provisions of limitation apply to that particular farm bill. So it is important that we talk about this today, because under the rules of the House, there will not be any debate or discussion tomorrow on that motion to recommit. Mr. Speaker, this policy of giving most of the farm government payment subsidies to the largest farms also puts upward pressure on land prices and rents, and, as we mentioned, it contributes to overproduction because the largest farm operations can get a guaranteed government price on unlimited acres. The result is lower commodity prices, driving more family farmers off the farm. I see the gentleman from Oregon (Mr. Blumenauer) has arrived in the Chamber. I want to yield to the gentleman. I was disappointed that the gentleman did not have a chance to present his motion to instruct because they very quickly brought to the floor their filing of the agriculture bill, which preempted your opportunity to give more suggestions to the conferees. But, on the other hand, when 265 Members of this Chamber, almost two- thirds of this Chamber, voted the other week to instruct conferees to have some kind of real payment limitations, they disregarded it. It approaches arrogance when they say we do not care how most of the Members of this Chamber vote or, how many, it was 64 to 31 in the Senate, that said let us have real payment limitations. Maybe the gentleman's amendment would not have accomplished what we hoped it would. Mr. Speaker, I yield to the gentleman from Oregon.

Mr. SMITH of Michigan. I thank the gentleman. Of course, with the rush on this bill, there is a lot of work to do in informing our Members of what the gentleman's amendment is, and I think most of us in this room are cosponsoring it. Mr. Speaker, I yield to the gentleman from Arizona (Mr. Flake).

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I rise in support of this legislation sponsored by my good friend and colleague from Michigan, Mr. Ehlers. This legislation, which establishes a Deputy Administrator for Science and Technology at the Environmental Protection Agency, fulfills a recommendation made in a report of the National Academy of Sciences. It is intended to give science a more visible role at EPA and to ensure a sound foundation for science at the agency. As many in this body know, there is a widespread perception that politics more than science influences regulatory decisions at EPA. This bill addresses this problem, but it is only the beginning. There needs to be a real change in the culture at EPA. Many have asked whether it is appropriate to have a regulatory body conducting and overseeing the science used to support its regulatory determinations. It seems to me that there is an inherent conflict of interest in such an arrangement. Even when EPA science is sound, there is an inescapable perception that the regulatory decision drove the science, not the other way around. This bill is a good start at raising the profile and centrality of science at EPA. I want to thank the gentleman from Michigan for his leadership on this issue, and I urge my colleagues to support H.R. 64.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I rise in support of the Education Science Reform Act. As one famous scientist observed, ``It is nothing short of a miracle that the modern methods of instruction have not yet entirely strangled the holy curiosity of enquiry.'' That scientist was Albert Einstein, and its apparent that since his day things haven't changed all that much. Our colleges and universities are still the best in the world, but as international tests show, U.S.K.-12 students do not measure up to their peers in other industrialized countries. As Chairman of the Subcommittee on Research, we have been advocating that we devote more of our education research funding to research on how kids learn. Our current knowledge of how children acquire such academic skills as reading and math is not well advanced. Further, we know very little about the how to link fundamental research and educational practice in the classroom. We have to find out what works in the classroom, and what doesn't. In hearings before my subcommittee, we have found that new teaching methods and technologies are often introduced into classrooms with little or no data showing that they are effective. This is unfortunate, and it means that many of our kids will not be prepared for the high-tech future. If we want to do a better job of imparting to students the skills they need to be successful in science and math, we have to employ the most effective teaching methods from kindergarten to college. To help do that, we must conduct the kind of research and date collections to better discover what works. Currently, federal funding for education research is a fraction of a percent of all education spending. It stands to reason that increasing funding in this area will allow us to develop policies and programs that will spend the other 99+ percent of funding on education programs more effectively. I am pleased that National Mathematics and Science Partnerships Act, which passed the House last summer, contains language I proposed to have NSF establish centers for education research. These multidisciplinary centers will focus on research that has the potential to transform education research and teaching practice. Complementing this effort is the work being done by the Department of Education authorized in this bill. I am particularly pleased that the bill establishes ``scientifically-based research standards'' for this program. Witnesses before my subcommittee testified to the shortcomings of the research being conducted by the Education Department. This legislation brings scientific rigor to an area of research that often lacks it, and I want to commend the gentleman from Delaware, Mr. Castle, and the Chairman of the Education Committee, Mr. Boehner, for their work in making this needed reform. Mr. Speaker, it is in this country's best interest to see that students receive the education they will need to compete and win in the global marketplace of the future. This bill will help us achieve that goal.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, in this November's election, there is going to be a lot of talk and debate about Social Security. As a person that has worked for the last 9 years on the Social Security problems; and how we achieve the best possible solution to make sure that we keep this important program, and having served in the last session as chairman of the bipartisan Task Force on Social Security, I would like to make a couple of suggestions. One is that we do not try to scare people in an effort to achieve some kind of political advantage, but rather that we talk about the real problem of Social Security; we talk about the real cost of doing nothing. Right now we have a $9 trillion unfunded mandate. It needs to be rationally discussed; we need to face up to the challenge. It is a serious problem. In conclusion, Mr. Speaker, the longer we put off a solution, the more drastic that solution. Let us move ahead with real discussion and debate, not demagoguery.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, the leadership is currently considering a proposal to change the definition of debt subject to the debt limit. This proposal would create a new lower limit applying only to debt held by the public. This would exclude debt owed to government trust funds, principally the Social Security and Medicare trust funds. As chairman of the Speaker's debt limit task force in 1995 and 1996, I oppose this proposal. Ending the inclusion of debt held by government trust funds, what the general fund has borrowed from Social Security and Medicare, in the statutory debt limit is unwise for good fiscal reasons. I think that the proposal of creating two classes of debt will create opportunities for the manipulation of government accounts to disguise the true level of debt. This concern is not wholly theoretical. The Treasury has used some accounting gimmicks available in the past. As my debt limit task force report documented, the Treasury divested $39.8 billion from the civil service trust fund in November of 1995 to avoid bumping up against the statutory debt limit. Though the divestment was reversed after an increase in the debt limit, it put the retirement benefits of millions of government employees at risk while masking the true size of government obligations. If we change the debt ceiling to apply only to Wall Street debt, the same thing could happen to Social Security and Medicare. The truth is, however, that there are only a limited number of opportunities for this sort of finagling under current law. Creating a broad class of accounts outside of the debt limit will increase the danger of this sort of manipulation exponentially. Further, it will complicate government accounting and make it even more difficult to understand the government's true financial situation. I have another concern as well. Taking government-held securities out of the debt limits comes close to saying that our debts to bondholders on Wall Street are more important, or more real, than our debts to the Social Security and Medicare trust funds. The change could be portrayed as discounting our obligations to Social Security and Medicare while protecting Wall Street bondholders. It would be, in fact, a denial of the fiscal mess we are in with our entitlement programs. Not only do we owe that money in the trust funds that some would like to ignore, we have tens of billions of dollars of unfunded liabilities for Social Security and Medicare. We have to face up to this challenge and make some hard decisions. Instead, the proposed debt ceiling change would sweep it under the rug, our future obligations, leaving the problem to our children and grandchildren. If we are interested in honest accounting and fair depiction of our government finances, we would increase the debt ceiling dramatically to account for these unfunded liabilities, what we have promised in Social Security and Medicare which are going to be future debt and future cost, and we would account for these in addition to what we have borrowed from the Social Security and Medicare trust funds as well as the so-called Wall Street debt. Perhaps raising the debt ceiling would wake up those in Congress who hope the obligations of the entitlement program will simply go away or simply be dealt with with future Congresses, because it is politically difficult to acknowledge how and who is going to pay for those future obligations. I would just like to say that Chairman Alan Greenspan suggests that possibly we should have no statutory debt limit, because the true obligation comes from how much Congress spends and legislation we pass promising future benefits or future spending. I disagree. Though painful, I believe that we should have a full discussion about how much debt, including the unfunded liabilities, our country should leave to future generations, and how this would best meet our country's goals of fiscal discipline and honest government accounting.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Was that a derogatory remark towards the Senators that wrote this language in the farm bill and is that appropriate in the Chamber?

Mr. SMITH of Michigan. Madam Speaker, on that I demand the yeas and nays.

Mr. SMITH of Michigan. Point of order, Madam Speaker.

Mr. SMITH of Michigan. Madam Speaker, I would like to correct the gentleman from Arkansas when he states that this proposal limits the participation of retired farmers or retired farmers' spouses or widows of retired farmers. The Senate proposal provides exemptions. For example, retired farmers and widows of farmers can have their labor and management requirements met by a relative. If you have additional sons or relatives on the farm, if they are actively participating, they are also eligible for the $150,000. I think we should remind everybody that up until the last 2 years, the limit on LDPs and marketing loans was $75,000. The year before last, because prices were so low, we upped that to $150,000. We are facing a situation now where when we passed this bill through the House, unfortunately, in the bill we passed through the House it was stated that there were limits on commodity loan payments, marketing loan payments. Technically that is true, but it is not totally honest, as I pointed out, because there was a loophole, and the loophole was the ability of farmers to use certificates and forfeitures. So they went and got a non-recourse loan. They were given the lending money. They gave title of that commodity to the government. Then, if they wanted the same benefits as a loan deficiency payment or a marketing loan, they simply kept the money and told the government to keep the commodity. Moreover, this bill fails to address the use of generic commodity certificates that I think are so important, and that is why we are suggesting to this body that we look very closely at closing this loophole and not hoodwinking the individuals and people that might think there is some kind of a limit simply because there is a limit on part of that price support payment. Farmers are going broke. We need help to the smaller family-sized farms. When I say smaller family-sized farms, maybe it is 1,000, 2,000, 5,000, 10,000 acres; but it is not the 80,000 acres, it is not the 100,000 acres, where land bearers have these lands, they have tenants, where they can divide up this money. That is why we have these press reports of these enormous amounts of millions of dollars that some of these farmers and farm operations were receiving, is because of that particular loophole. Madam Speaker, in closing let me say that we often hear that farmers and ranchers are too independent to agree on anything, but on this issue there is remarkable agreement. We have a list of 32 farm and rural-related organizations that have endorsed this effort to instruct conferees, and we are proceeding with a ``Dear Colleague'' tonight. We will hand it out tomorrow when we vote. We have to start asking ourself, when is enough enough? How long will the American public put up with programs that send out billions of dollars to the biggest farm entities? All this does is damage our ability to help people we originally intended to help, the small, average, medium-size farms, and even now the larger family-size operations. Look back at the intent of our first farm bills. We have never intended to subsidize every single acre of every single bushel. We need to move back closer to having the marketplace be part of that decision on how much of what crop a producer produces. So to say to these giant farm operations that we are going to subsidize you at a level that is going to protect however many bushels or pounds that you produce of whatever commodity, then we encourage that additional production. I say one of the effects of this kind of limitation is to have that big farmer think twice and look at the marketplace, look at the demand, and put some effort into expanding our international markets, expanding our ability to sell our products in foreign lands. So I would ask, Madam Speaker, that we support this effort to have some kind of a limit on payments. I am so convinced, spending my life in agriculture and as a farmer, that if we continue to have this bad publicity of these huge million-dollar payments, I think we are going to, if you will, jeopardize the future of farm programs. This bill also says let us make a greater effort in conservation and in agricultural research that can help all farmers. Madam Speaker, I include the following for the Record. The following table, prepared at your request, shows the number acres it would take to reach $150,000 if LDPs were made based upon actual past marketing loan prices and season average farm prices.

Mr. SMITH of Michigan. Madam Speaker, I yield myself such time as I may consume. Let me just say that a Senate that quite often is partisan in trying to come to agreement overwhelmingly supported this idea of some kind of a payment limitation. The gentleman from the other side of the aisle suggests that this kind of a limitation hurts a lot of the hard-working family farmers. Let me just report to you the following information that comes from the Congressional Research Service, prepared by Jasper Womach, Agricultural Policy Specialist. The report calculates how many acres of the different commodity crops would have to have been grown to reach the $150,000 limit that we put in this suggestion of instructing conferees. Allow me to go down through them. Wheat based on the price of wheat last year, you would have to exceed 60,000 acres of wheat. Corn, it would take over 27,000 acres of corn to get close to the $150,000 limit. Soybeans, it would take over 5,000 acres of soybeans to get close to the $150,000 limit. Cotton, it would take 11,000 acres of cotton to reach the $150,000 limit. Rice, it would take over 2,600 acres of rice to reach the $150,000 limit. Let me stress this: whether it is 27,000 acres of corn or whether it is 2,600 acres of rice, we are dealing with an average commercial farm operation in the United States of 460 acres. So I think suggesting that this measure has a limit or cap on anyone except the very, very large farmer is not being fair in terms of communicating what this legislation does. Let me just suggest that you may have heard from some of the big international commodity traders or farm groups in opposition to this idea; but make no mistake about it, they do not speak for the majority of farmers and ranchers in the United States. Here is how I would back up that statement. Last year, 27 of the Nation's land grant colleges from all of the Nation's regions came together to poll their farmers and ranchers on their opinion of the farm bill. On the issue of farm payment caps there was enormous consensus, and that was, nationwide, 81 percent of the farmers and ranchers agreed that farm income support payments should be limited and targeted more to the small farms. With that, Madam Speaker, I will reserve the balance of my time for a comment or reaction from the gentleman from Arkansas.

Mr. SMITH of Michigan. Madam Speaker, I yield myself such time as I may consume. Just to review from where we were an hour ago, I think it should be made clear to all of our colleagues and the American public that the purpose of subsidies since the beginning, since back in the 1930s when we tried to make sure that the agricultural industry was going to survive, the purpose has been to protect family farmers. Unfortunately, over the years, we have had programs that made it tough for any farmer to survive, because part of the farm policy in this country has been to encourage a little more production than what we need. The effect of that increased production a little over and above the current market demand meant that prices tended to stay down. So there was an attempt, of course, to keep those prices somewhat low for consumers and what happened in the evolution and the pressures that were put on farms in the United States over these years was that the small farmer was backed up against the wall, the medium-sized farmer felt like if he added a few more acres, then he might be able to send his kids to the same music lessons and schools and have the same benefits as their country cousins, so that medium-sized farmer said, ``Look, well, I'll buy some more land, I'll spend a couple of hours extra a day and try to make it.'' What we have done is had programs that encouraged larger and larger farms. That is part of the reason that we have this motion to instruct today, is to give a little greater relative advantage to the smaller farms by, in effect, saying all of your production is going to be eligible for the price support payments that we have in farm programs. Where the big, larger farms, the very big farms, we are saying, there is going to be a limit to how much of your commodity that you produce that is going to be eligible for this price protection. Therefore, it is going to have the effect on these larger farmers to think twice about what the market price is going to be if there is no support subsidy price. The gentleman from Arkansas (Mr. Berry) and I, we both want to have a situation where we expand markets, where we have better farm prices and hopefully the kind of farm prices that the support payments that are guaranteed in this farm bill will not even be applicable because that is what we are looking at, is better farm commodity prices to keep more farmers in business. Unfortunately, today about 82 percent of all of our farm subsidies go to just 17 percent of the farms. By providing unlimited subsidies, we have encouraged huge corporate farm operations to get bigger and bigger, squeezing out family farmers. With this we have encouraged excess production that has tended to reduce prices paid to farmers. That is why I think it is so important that we have some kind of price limit, that somehow, someway, someplace, whether it is a limit of $275,000 as suggested by the Senate or maybe a half a million, but it is bad for farmers, it is bad for the support they get from the American people to have these exorbitant millions of dollars given to some of these megafarm operations. Madam Speaker, I reserve the balance of my time.

Mr. SMITH of Michigan. Madam Speaker, I yield myself such time as I may consume.

Mr. SMITH of Michigan. Madam Speaker, I ask unanimous consent that the time of the gentleman from Michigan (Mr. Bonior) be returned to my time to be yielded to the gentleman from New York (Mr. Hinchey) upon his arrival.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I would like to welcome to our Chamber Senator Grassley. He is the sponsor of the Grassley-Dorgan amendment. Mr. Speaker, I ask unanimous consent that his statement be inserted into the Record at this point in the testimony.