I am just saying it is an impossible thing to police failure and the moral hazard and the risk of fraud and abuse there is indeterminable. And I just think you are asking for real trouble if you try to do something like that.

I realize the problem of areas that have high risk in them and I think this will take care of it coupled with the market loan.

I have a set of values on the back sheet of my thing because that is the first thing farmers ask me, they cannot-they sometimes cannot imagine how these things will work but when they get to the bottom line, what kind of price are you talking about offering. These prices were put together for me-I was helped in this respect by the people at FAPRI that work with you. We took this, that if we took the money that we had been using for these farm programs, particularly the last 2 years, and had a marketing loan in place, raised all the commodities to the same level, what kind of price levels would we be able to offer farmers. And that is what it shook out on the back. I was surprised at how good they really were. On a counter-cyclical basis, I think you could even do better than that.

My point is that you can decide how much money you want to put in these farm programs and you can style a program that will answer that sort of thing. These are safety net prices, they will not make anybody rich, but they will keep farmers in business. I have asked farmers to evaluate those numbers and I have asked bankers to do the same thing, and they have all assured me that it is not great stakes but at least it will get us along. And that is the whole thing.

I can tell you the two limits of these prices that have to be met. They have to be high enough to let farmers cash flow or these things are of no use to them. You can get them too high and you will have a revolt from the taxpayers and such a drain on the Treasury that nobody can defend it. It has got to fit between those two levels. It depends on how much money you want to put in it. If you put it in in a counter-cyclical way, I think you will have enough money to support these programs. And how much more wholesome it would have been than maybe the way that it fell out with the AMTA payments and that sort of thing.

I am going to break off there, I know I have overused my time, Mr. Chairman, and I apologize for that. And I can respond to questions when we complete.

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

The CHAIRMAN. Thank you, Mr. Dupree. Mr. Sebree.

STATEMENT OF GARY SEBREE, RICE AND WHEAT PRODUCER,

STUTTGART, AR

Mr. SEBREE. Yes, sir, Mr. Chairman, members of the committee, I thank you for allowing me to appear before you today. I am Gary Sebree, a rice, soybean and wheat producer from Stuttgart, AR. I am representing the USA Rice Federation.

I have been farming for 36 years and I am in the field every day of the working season, and I feel the pressure of low commodity prices and the increasing cost of production. With the prediction of a drought for the upcoming summer, and the tremendous increase

in fuel cost, I see no reason to believe we will not need assistance in the form of additional AMTA payment this year, at least equal to last year's funding level. I would point out that most producers in the south must have the payment limits waived, as occurred last year to be eligible to receive these benefits.

A marketing loan program is a good program that has worked well and is a sound program to move grain when markets are depressed. Presently for rice, the loan rate is $6.50 per hundredweight and this is well below the cost of production. It makes no sense to set payment limits that force farmers to forfeit rice to Commodity Credit Corporation and we thank you for reauthorizing the use of commodity certificates. It was only by raising limits and the use of certificates that allowed the emergency AMTA payments to help many of the financially strapped farmers in the south that raise multiple crops.

I also encourage you to use the AMTA payment if additional assistance is enacted. And the point being that the $475 million that was allocated to oilseeds this past year is still in the hands of the USDA while the AMTA payment was in the farmers' bank accounts 2 weeks after enactment. And I thank you for that and my banker is in the audience back there and he thanks you for that.

I would like to talk just a little bit about payment limits and targeting. There is a misconception that small farms should be helped more and that means the "family farm." In rice growing areas of Arkansas, I would say that I am an average sized farm and I am a family farm. I bought out my dad, two uncles and a cousin and all of my neighbors are family farmers. Congressman Berry is a family farmer, he knows what we are talking about. I do not know of one corporate farm in Arkansas counties. There are corporations but they are all family-owned corporations.

A farmer that raises 450 acres of rice and 450 acres of soybeans is not eligible because of payment limits on LDP payments at the levels that we have today, and that is below the average size farm and does not consider that in many parts of Arkansas, Mississippi, Missouri and other southern States, that cotton is added to the crop rotation. Therefore, I would strongly encourage that limits and targeting be eliminated altogether.

On crop insurance, I would like to see reform that set premiums at more affordable levels and see the program expanded to provide revenue as well as yield insurance.

Also, we would like to explore possibilities that allow rice to be covered under drought conditions. At the present time, this is not possible. However, I believe that crop insurance should be in addition to and not a substitute for farm program payments.

In closing, I would like to make a few comments. You asked that we say what we like and what we do not like about the present bill. Here are some things that I like very much:

• Marketing loan

• Planting flexibility

• Freedom from Government acreage control

• AMTA payments

• Reduced tariff

• Better market access

• Removement of trade sanctions

• Reduced Government regulations of EPA and others.

Here are some items that I do not like:

The fact that the last four items I have mentioned were never delivered. We still have limited market access, we still have excessive tariffs on rice in the EU is $400 per ton; in Japan it is $3,000 per ton. Do not tell me I cannot compete with these people if you take those tariffs off. We can give them a shot.

Trade sanctions are still in place in Cuba, Iran and Iraq and these were all the number one market for U.S. export rice when they were imposed.

Quite frankly, I am reluctant to tell you today what our No. 1 market is, for fear that we will lose it.

On_regulations, we in fact have more regulation instead of less. And I could go on about that for a long time, but just leave it at that.

Mr. Chairman, in 36 years and many farm bills-and I have not farmed under all of them but I farmed under most of them-I can never recall when a farm bill was passed and only 80 percent of it enacted. And I truly believe had the above mentioned actions been delivered as promised, we would not be having this hearing today.

I do not pretend to have all the answers and I am a little embarrassed to tell you that after all of these years, I do not even know what all the questions are. I thank you for your time. The CHAIRMAN. Thank you very much. Mr. Loewer.

STATEMENT OF PAUL LOEWER, JR., RICE PRODUCER,
BRANCH, LA

Mr. LOEWER. We appreciate the Agriculture Committee coming and hearing our comments and for the opportunity you afford us. My name is Paul Loewer, I am a rice producer with my wife and my two brothers and their wives on a family farm of 3,500 acres in Acadia Parish in Louisiana, the home parish of our Congressman Chris John, who did have to leave and we are sorry about that.

Those two brothers are walking levees today, so I can be here talking to you. It is kind of indicative of the times that we live in that you need to be as skilled in front of a camera as you are behind a tractor steering wheel. Both are necessary at this time. Also, just to point out, my wife and I also own 500 acres of ground in Marion County, KS, Mr. Moran-to make you feel a little bit more at home.

Mr. MORAN. That is in my district.

Mr. LOEWER. We find in Louisiana that there are three resources necessary to farm in this global economy; Mother Nature, Father Time and Uncle Sam-a family business. Many things farmers are doing, they can do for themselves, but there are a lot of things that we cannot that only our Government can, and that is why we are here today.

Mr. Sebree mentioned that we probably harvested the largest crop that we have ever harvested in the last year and it probably begs the question why in the world do you stupid farmers keep doing that. There are six answers to that, but because of time, I am only going to give you one, because it is the most important.

When Freedom to Farm was passed, we were given assurances from our Government that if we accepted a declining, fixed payment, then the Government would begin to dismantle the barriers that have walled off our markets. I recommend, therefore, that the lifting of the unilateral sanctions give us back our markets in Iran, Iraq, Syria, 90 miles away is a customer that consumes 350,000 tons of rice and we cannot sell to them. Give us back Cuba. Remove the licensing restrictions that you have given us that are so cumbersome that it makes it almost impossible to use.

Help us gain access to those markets that you do have open to us, but that are closed by other governments through tariffs in the EU and tariffs in Japan and in other countries that are closed to us through shallow, superficial excuses that keep our products out. We need help in enforcing WTO standards. We need fast track. We would like the export programs to be expanded. We want to commend you and thank you for the recent section 416 that was granted for additional purchases of rice for our Government for donations. We need increased P.L. 480 funding, we need increased use of credit programs, GSM, and additional market promotion programs that are so important to us as we compete with other countries around the world.

We also recommend that the LDP and under the marketing loans that this program be managed aggressively so that the adjusted world price for rice is increased so that our share of world trade would go back to 17 percent from 13 percent where it is today. Historically, we have been at 17 percent.

Mr. Chairman, farmers are an independent, industrious lot. We appreciate the freedom we have to farm for the market, but our hands are tied in dealing with markets closed to us by our own Government and other governments. We need help in dealing with these things we cannot control.

There is more to farming than placing the seed in the ground. Farming is also marketing the crop. Marketing is to selling what shopping is to buying. We are free to shop and buy, we are not free to market.

Freedom to farm should mean freedom to market. If we cannot get these markets open, we are not free to farm. We are not free to farm if we are not free to market.

I thank you for this opportunity to visit with you today and if you have some of these hearings at a later year, we invite you to come to Louisiana and we will feed everybody.

[The prepared statement of Mr. Sebree and Mr. Loewer appears at the conclusion of the hearing.]

The CHAIRMAN. We will be there about 6:00 tonight. [Laughter.] Mr. Minton.

STATEMENT OF KEN MINTON, RICE PRODUCER, DEXTER, MO

Mr. MINTON. Thank you, Chairman Combest, members of the committee. I would like to thank all the panel for their time, energy and enthusiasm that you have shown for agriculture by being here today.

I currently serve as secretary of the Missouri Rice Research and Merchandising Council, I am a charter board member and sec

retary of the U.S. Rice Producers Association. I am also a charter member of Cargill's Missouri producer board.

You know the worst thing about speaking toward the end of all these panel members is that everybody swiped your ideas and there is no tree to go behind when you really need one.

As each of you know, agriculture is in a very precarious position. I recently read in a local agriculture paper that Congress is considering doubling the current AMTA payment to farmers. Based on the current market conditions and outlook, I urge Congress to do that for the 2000 crop year. Market loss payments and other program improvements provided by Congress last year made the difference between a profit and loss for many farmers.

With regard to farm policy, I ask the committee to consider what would happen if the commodity loan rates were raised while keeping the loan deficiency payment in place, to ensure that the grain would be sold and not stockpiled.

There has been debate over revisioning set-aside acres in the next farm bill. I have mixed emotions in that area. My question is if increased set-aside decreases commodity levels, how do we stop our foreign competitors from filling the void?

I am also concerned about the distinction between big business and the family farm. Payment limitations of $30,000 as has been suggested by some, will now allow the family farm to survive during these economic times. In our area, a full time farming family of four needs a gross income of close to $500,000 just to make ends meet. If they get a 5 percent return on this gross income for living expenses that leaves them with about $25,000. We cannot all be hobby farmers, someone must purchase the new assets.

We need to continue open export markets if producers are to survive. More than 40 percent of the U.S. crop must be exported each year if the industry is to remain profitable.

In Missouri, we have a producer export project that is nearing completion. A group of farmers decided to raise a new variety of rice in the United States and market it directly to the foreign importers. Each of us understanding that if our project failed, we would be responsible for our own losses.

Programs that help educate producers while at the same time helping importers cover the costs of working with new-to-the-game producers are a valuable resource. USDA's Foreign Agricultural Service has an ingenuous new program called a Quality Samples Program, which was a valuable asset in our making a new rice sale. We are very appreciative of the FAS and of the U.S. Rice Producers Association which helped us with the technical aspects of this new program. We are also very appreciative of Missouri's congressional representatives particularly Congresswoman Jo Ann Emerson, Senator John Ashcroft and Senator Kit Bond, who all endorsed our efforts.

Rice growers from Missouri and other States continue to encourage USDA to provide our export buyers with the rice form that best suits their needs. Despite these efforts, rice is the only remaining major farm commodity that our Government routinely fails to offer potential customers in its unprocessed form.

For example, late last year, USDA broke its 45-year record of restricting access to the P.L. 480 program to rice processors and