stock. Without your support, there will be no farmers left to attend your next farm policy forum. Thank you.

[The prepared statement of Mr. Dowdle appears at the conclusion of the hearing.]

Mr. STENHOLM. Mr. Gravois.

STATEMENT OF DEAN GRAVOIS, SUGARCANE PRODUCER,

VACHERIE, LA

Mr. GRAVOIS. Mr. Chairman, thank you for the opportunity to testify regarding the many problems facing America's family farmer. I am Dean Gravois and I am a family farmer rasing sugarcane in Vacherie, LA. I speak to you today on behalf of myself and the other 700 family sugarcane farmers and 18 raw sugar processors in Louisiana who make up the American Sugarcane League.

Farmers in Louisiana have been growing sugar continuously for more than 200 years. Together, we support a rural society, a culture, built on the traditions of sugar farming. The family farmer is an institution that is still an integral part of our communities. Over 32,000 people in Louisiana depend on the sugar industry for their livelihoods. Yet, while virtually every other part of our national economy enjoys the fruits of a record boom, the family farmer is suffering in ways unseen since the great depression.

For sugar, the problem is rooted in an over-supply created by many factors, but most importantly, the entry into the domestic market by subsidized foreign sugar and by program management problems that have destroyed the market confidence.

To understand how best to address these problems, we must remember how they came into being.

Until last summer, raw sugar prices remained pretty flat for almost 20 years. During all this time, the world dump market price of sugar, tossed up and down wildly as production and export subsidies by many major exporters encouraged a glut on the thinly traded world market. Under the weight of this glut, the world price eventually fell to a level that was equal to no more than a fraction of the cost of production for even the lowest cost producers in other parts of the world.

Inevitably the pressure from this glutted world market was borne onto the United States. Importers began looking for creative ways to evade our TRQ and bring in some of their subsidized foreign sugar. They found access through a TRQ circumventing syrup known as stuffed molasses and by importing excess Mexican sugar at NAFTA second tier duty rates. The dilemma was exacerbated by the unusual 2-month delay in the USDA's announcement of the Farm Year 2000 TRQ. This delay undermined market confidence causing more problems. It was simply too much to overcome.

The domestic raw price of sugar has plummeted by 25 percent since then. Losses to the current crop from this price catastrophe translate to more than $1 billion to the cane and sugar beet industries. Unless prices rise significantly, massive, costly forfeitures are inevitable.

To resolve the current supply crisis and to avoid massive costly forfeitures, the USDA should immediately purchase a significant amount of sugar from the domestic market. The sugar could be sold or donated overseas or could be used for non-food purposes such as

the production of ethanol. Such a purchase will improve the crisis by minimizing government cost, invigorating producer prices and rebuilding market confidence in the government's ability to manage the program.

The long-term strategy includes improvements to both our trade agenda and our domestic foreign policy. On the trade front, we need legislation to prevent continued circumvention of the TRQ by products just like stuffed molasses. We also need to shore up the integrity of NAFTA by refusing to be buckled by Mexico's attempts to undermine the side letter on sugar.

As for our farm policy, we must make four important changes. To put these suggestions into context, it should be remembered that sugar growers are not eligible for any AMTA payments. Except for a temporary suspension of our marketing tax, we have not shared in any emergency relief packages provided by Congress to farmers each of the last 2 years. So addressing our disaster will require focusing on specific provisions of our sugar program.

First, Congress should reinstate the no-cost provision.

Second, Congress should permanently eliminate our marketing assessment on sugar.

Third, Congress should abolish a 1-cent forfeiture penalty. Further, Congress should direct the CCC that in the event sugar is forfeited, such forfeited sugar will not be sold for food use back into the domestic market, but instead will be disposed of in a way that will strengthen the domestic producer prices.

Finally, Congress should assure sugar farmers of non-recourse loans regardless of the level of imports.

After more than 200 years, Louisiana farmers have learned a thing or two about sugar. It is not only our best crop, it is our only crop. We have tried growing other crops with no success. Nothing else but sugar grows well in our region. The loss of our industry would mean absolute devastation to my heritage, my community and my State.

Sugar farmers do not want unfair protection, nor do we want an unfair advantage. We simply want fairness itself.

Thank you, Mr. Chairman.

[The prepared statement of Mr. Gravois appears at the conclusion of the hearing.]

The CHAIRMAN. Thank you, Mr. Gravois. Mr. Lemoine.

STATEMENT OF BYRON F. LEMOINE, III, SUGARCANE AND GRAIN SORGHUM PRODUCER, HAMBURG, LA

Mr. LEMOINE. Mr. Chairman and members of the committee, thank you for the opportunity to address you today concerning Federal agricultural policy. I am Byron Lemoine, a farmer from Hamburg, LA, which is located in the central portion of Louisiana east of Alexandria. I am active in various organizations at the parish and State level and serve on the United Soybean Board. I, along with my wife Karen and my two children, grow cotton, corn, grain sorghum, soybeans, sugarcane and wheat. As a diversified producer, I can tell you that the past 2 years have been the most difficult times in my farming career.

Even as diversified as my operation is, there is not one crop that currently looks more promising than another to me. While some

commodities are inter-related, the market forces and factors that can affect one commodity are very different than those that affect another.

As you know, improved trade and regulatory reforms were promised when the FAIR Act of 1996 was being debated. Efforts to make improvements in these areas and to add additional resources to public research should be increased.

In the area of trade, we must maximize and expand the uses of measures that will enhance exports. Investments in developing new markets should benefit us in the future, as long as there is access to those markets.

Biotechnology is the future for agriculture to be able to have an abundant, healthy and environmentally friendly food supply. It should not be a trade issue.

Currently, imported sugar is streaming across our borders disguised as molasses and flavored sugars in order to circumvent U.S. tariffs that ultimately affect our markets and the income of U.S. producers. We must also continue to realize that other factors such as extensive regulations on U.S. agriculture will diminish any competitive advantage. I cannot pass on the increased costs of regulations.

Research is also key in sustaining a viable U.S. agriculture. In my opinion, we are in jeopardy of losing the advantage we have had in developing and adopting advances in technology improvements. Technological improvements have been a key part of the success of agriculture. While private and checkoff-funded research is important and has increased in some areas, the need for continuing and increasing public research cannot be understated. We should increase public funding for agricultural research. Land grant university research and USDA's competitive grants program should be increased. New alternative uses research for all crops should be encouraged. We need to use our crops in other ways other than traditional uses.

While I like the flexibility in the current farm bill, a personal example of the negative effect of flexibility can be cited with the rapid influx of program crop contract acres into sugar production. This in large part has led to surplus sugar production that has caused domestic sugar prices to decline by roughly 20 to 25 percent in the past year. On my other crops, I collect an LDP and sell the crop when the prices are trading below the loan rate, as sugar currently is. However, since sugar does not have a marketing loan, a downside risk protection mechanism is a non-recourse loan that is only available if we import a minimum of 1.5 million tons. This places sugar producers at a disadvantage when prices trade below the loan rate, because it requires producers to pay 1-cent forfeiture penalty and forfeit their sugar to the government, to receive the loan value for the crop. This is the only means of establishing a price floor for sugar and seems to me to be an inequitable arrangement for traditional sugar producers.

If the committee would entertain my thoughts, I would suggest a few changes:

First, remove the 1.5 million trigger to maintain a non-recourse loan. None of the other commodities I produce has to qualify to receive a non-recourse loan.

Second, remove the 1-cent per pound forfeiture penalty. If prices are so low that you have to forfeit the crop, the last thing you need to do is pay a penalty reducing your income even further.

I would prefer a system where the differential between the market price and the loan price is paid to the producer, similar to an LDP, so that we receive the downside protection and can sell into the market and not forfeit the crop to the Government.

The assistance provided the last 2 years has enabled a lot of producers in my area to continue to stay in business. However, it is nearly impossible to make any production loan cash flow without some assumptions of the assistance that will be provided this year. As I stated earlier, all commodities I produce are experiencing very low prices. The assistance provided to oilseeds last year was helpful. This year, that type of program may need to be increased and expanded to other non-AMTA commodities such as sugar. It is extremely difficult for many to obtain credit under this uncertainty. That is why an ongoing program needs to be added or current benefits need to be increased as soon as possible.

Again, thank you for holding these hearings and allowing me the opportunity to testify. I will be happy to respond to any questions that you have. Thank you.

[The prepared statement of Mr. Lemoine appears at the conclusion of the hearing.]

The CHAIRMAN. Thank you very much. Mr. Lyons.

STATEMENT OF DANIEL LYONS, GRAIN AND LIVESTOCK
FARMER, CHURCH POINT, LA

Mr. LYONS. Good afternoon, Mr. Chairman and committee members, I am Daniel Lyons from Church Point, LA, from the heart of Cajun country and crawfish country. I grew up on a dairy farm and my total income is derived from my family farm that my wife and I have operated for the last 31 years. Our operation consists of grains, hay, dairy and quarter horses and beef cattle. I appreciate the opportunity to provide my views on farm policy, which affects the livelihood of farmers as well as the consumer, here today.

What we are really here to talk about is guaranteeing the consumer of America a safe and abundant food source for years to come and what that cost will be. We, as farmers in the United States are producing against other countries, not farmers. We must not use food as a tool for foreign policy. When we do, farmers must be justly compensated.

The 1996 farm bill promised us improved trade and regulatory reform. I feel that there has not been enough given to combat unfair trade practices. We have not lifted trade sanctions against certain countries which deny export markets for U.S. crops and livestock. I support granting permanent trade relations with China. I also support the use of carousel retaliation in enforcing trade agreements. Being in a global economy, we need to make sure that all commodities are on an equal playing field and that agriculture does not become a sacrificial lamb for other entities or special interest groups.

Until trade barriers are removed and fair trade achieved, an increase in price supports through higher loan rates is needed. We

need loan rates that reflect cost of production more closely so that when we go to the bank to make a loan, we can cash flow.

I also support additional funding for USDA export assistance programs as well as domestic programs to assist the movement of all the commodities. While I support the flexibility of the current formula, I am not interested in going back to the old set-aside program, because in today's global market, other countries would just increase their production.

Fairness of AMTA payment distribution must also be addressed. I farm 900 acres of corn, wheat and soybeans and only have 232.6 acres qualified for AMTA payments. Our ability to add program acres and yields to some of our crops was frozen in the 1985 farm bill. Program acres and yields need to be adjusted to today's planning acres and production capabilities. Agriculture production has come a long way since 1985, so if we are to use AMTA payments to help farmers survive, we must bring this up to date to get maximum benefits to farmers from this program.

My next issue deals with the safety net or crop insurance program. That can be used across the board for all commodities and has the farmer's best interest in mind. This can be achieved with a crop insurance program based on cost of production, with strong emphasis on oversight and compliance. This type of program would be adaptable to all commodities and take into effect regional differences within commodities. Insurance programs need to be optional and on an individual basis. Farmers need to get the money and not the delivery system.

The Livestock Assistance Program and programs for non-program crops need to be brought up to date so it more closely reflects today's production levels and be fully funded. The EQIP Program, which helps to protect our natural resources of this country, need to be fully funded.

In another issue, we have 25 States that have asked for dairy compacts to assure a fresh supply of milk to their consumers in their States. We need to allow them to do this.

We also need to label meat as to country of origin as everything else is labeled. Just look on what you are wearing today.

Our FSA and NRCS offices need to be kept separate and funded at a level so that services that they provide to farmers can be met on a timely basis. NRCS, which is a science-based USDA program, put in place years ago to protect the land of this country, needs to be the source that we use to do our environmental and our EPA programs.

I support full funding for agriculture research with emphasis on value-added products, development of new varieties and best management practices. Agriculture provides us with renewable resources and agriculture research is the key to developing new products from the renewable resources. Best management practices developed to protect our environment must be based on sound science and be cost effective.

The death tax must be eliminated. My son having to buy this farm that I am buying now from the Government is ridiculous.

In closing, thank you for the opportunity of allowing me to state my concerns and as I said before, what we are doing here today is trying to decide what the American consumer is willing to pay