ture discussions, if Mr. Squires would repeat one more time that portion of your testimony where you talk about the production and what inflation has done, could you restate that for the record? What the real bottom-line effect has been on the peanut quota. Mr. SQUIRES. I said the U.S. farmers, and specifically peanut farmers, have not benefitted from trade agreements and domestic policy. Since 1996, we've lost an estimated 35 percent of the U.S. peanut farmers. In addition, we now receive an inflated adjusted price for domestic peanuts that has been reduced by over 26 per cent. Mr. LUCAS of Oklahoma. The result of a 10-percent reduction and the result of inflation eating away, I think that's a good point that needs to be made. In peanut country, producers are not staying even. In fact, changes are happening. That's absolutely important. You really stirred my blood, too, John. Part of the challenges also that we face as we work towards the next farm bill, whatever that may be, we're trying to balance out all of these competing pressures. And I must say I appreciate testimony from everyone here. I have to fall back, though, to one question I've been asking of each and every panel. In regard to land prices in your home communities, up, down, neutral, no transactions taking place? Give me a feel. Mr. FINCHER. Basically the same with maybe a small percent upward. Mr. HARRAL. Congressman, during late 1998-99, when people felt like the stock market was starting to top out or thinking about it, a lot of them started bailing out. They bought a lot of ranches in our area, which had a little bit of recreation potential, kind of hedging themselves there. Once the market appear to be topped out with safe stock, I expect them to start again as the oil business continues to pick up here in Texas. Normally that's what happens. Mr. SQUIRES. For the most part, it's been declining to a small degree. Mr. VASSBERG. It remained basically the same until this year. For whatever reason, middle of the summer, prices started dropping off a lot, and there has been a lot of good irrigated and dry land available in our area. Mr. LUCAS of Oklahoma. Thank you. Thank you, Mr. Chairman. The CHAIRMAN [presiding]. Mr. Simpson. Mr. SIMPSON. Thank you, Mr. Chairman. I don't really have a question, but I do have a statement. Since you pointed out that there was sugar in the lunch, I don't feel like I would be doing my duty if I didn't point out there was also potatoes. And I have been noticing which members did eat their potatoes and which didn't. In reality, we don't care if they eat potatoes, as long as you take them. But as far as being a dentist by profession, I have to tell you, Mr. Vassberg, I not only support, but I thank you for the sugar program. And I agree with you that we need to eliminate the debt reduction provision that was put in on sugar. Mr. Stenholm asked about PNTR with China. One of the other questions that has been asked is about trade relations with Cuba. How do you feel about that? Mr. VASSBERG. If it's totally fair trade, all things equal, I'm in favor of it. If you could guarantee me fair trade, standard of living adjustment, salaries and wages, insurance costs, tort reform, exchange rates, and environmental issues that are placed on us, we can compete with anybody, all things equal. I don't know if that answers your question, but I do believe it. Mr. SIMPSON. Well, you bring up many issues when we start talking about trade relations. You bring up environmental issues, labor issues, insurance issues, all sorts of things like that. Is that a qualification on PNTR With China as well as other trade agreements that we have-when you say you support those agreements? That we should negotiate also equal Mr. VASSBERG. Congressman, it comes into play on any of the commodities that have been represented here today. Everything I just mentioned raises the cost of production in any commodity. So you have to take that into account to give us a fair playing field. Mr. HARRAL. Congressman, it seems to me when you negotiate these trade issues, fair always has to be a factor if we blend it in with free. And as the gentleman over here was saying, we're in a transition period, and I have concern when we talk about just free trade, because in economic terms, nothing is free. Mr. SIMPSON. OK. Mr. HARRAL. And sometimes I feel like some of us have been paying that free bill. And the modifications are maybe necessary, and in that area, we're drifting that way. But we need to modify the system as we go that direction. Mr. SIMPSON. Well, I guess one of the questions that comes up when we talk about this, is that in Seattle at the WTO, that was one of the issues that came up about environmental issues, labor issues, and those types of things. And I support our engagement in WTO, because I think it opens up markets around the world, but I'm not sure that I want the WTO Or other trade agreements to get that broad, that it becomes more or less a world government and controls everything. And I thank you. The CHAIRMAN. Mr. Thornberry. Mr. THORNBERRY. Mr. Harral, you made reference in your testimony to predator control. It reminds me that's one of the issues that we consistently have a difficult time with in Congress, because there are some people in Washington, I think, who would give greater protection to coyotes than they would to farmers. And that is part of the thing that we struggle with. It reminds me a few years ago, one of the committees I serve on, Resources, had a field hearing down in the Hill Country, and included in that was a tour of a sheep and goat operation where they were restricted on using their land because of a bird that would nest in some of the trees. I think Mr. Stenholm was there part of that. All across our region now, we're hearing about prairie dogs, and if it's not one thing, it's another. It just occurs to me, and I don't know that this is a question, really, but while we are working on all of these difficult situations with the global market and price, we also can't forget those basic private property rights on what we do with our land, rather than the Government coming in and telling us what we can or cannot do, which is essential to our earning a living just like a price is. I don't know if you want to comment on that, but I think it's important. Mr. HARRAL. Congressman, we definitely agree with everything that you're saying there. In our area, as large parts of the west, it's a very arid area. And we feel like we, as the ranchers, we're the ones providing the environment in the form of water, salt, feed, all the amenities that make life possible. You go back 150 years when my ancestors came out there, there was a lot of grass, and the only place there were any deer or wildlife was around an isolated spring or a little stream somewhere. And by putting in the water, everything has multiplied. And with that, in turn, we have to be able to manage those coyotes at times. I mean, that's what stewardship is. It's management of our re sources. And thank you for your support. Mr. THORNBERRY. Thank you, Mr. Chairman. The CHAIRMAN. I want to thank this panel for their testimony and taking the time to come, and appreciate it very much. And I would invite our next panel to come to the witness table. Mr. James Hinton, cotton, wheat, and feed grain producer from STATEMENT OF JAMES HINTON, COTTON PRODUCER, Mr. HINTON. Thank you, Mr. Combest. Honorable members of the Committee on Agriculture, thank you for bringing the field hearing to Lubbock and allowing me to present my testimony at this time. Today I speak with knowledge and expertise gained from farming for the last 22 years. The Freedom to Farm portion of the 1996 farm bill has allowed me to make planting decisions each year based on goals of profitability and conservation. Fields can be planted to cotton, wheat and grain sorghum, or left fallow without having to meet exact acreage requirements. I can plan crop rotations 2 or more years ahead. It is a relief to be able to farm the way conservation demands and markets influence rather than on an acreage allotment that was established back in 1980. Acreage controls have always been a sore spot to me. I hope we never see them again. I appreciate Freedom to Farm for that provision. In the last 20 years, farm program payments have amounted to as much as one-third of my gross income each year. I can say that my economic bottom line is dependent upon those payments. AMTA loan deficiency payments and disaster payments have been most helpful in keeping my operation profitable. In most years, the farm program payments have put the net into profit. I would rather all my farm income come from crop and live stock production only. That has not been possible due to the fallout of grain embargoes, monetary policy, trade barriers, regulatory hurdles, natural disasters, and missed market opportunities, just to name a few. To get the best possible income, I now place my crop production in a marketing pool. I use futures and options contracts to hedge my production up to one-half of expected yield. Drought and hailouts tend to mess up a marketing plan. Great rains make it a little easier. My father has often told me that the difference between a good farmer and a not-so-good farmer is a 2-inch rain at the right time. To get the best possible yield at the lowest cost, I am using conservation tillage, LEPA water application, and genetically enhanced crop seeds to allow me to use new weed control technologies. The techniques and practices are not cheap, but they return greatly for the dollars invested. For a safety net, I take level one 50 percent crop insurance. It is the first level above catastrophic coverage. The premium for higher coverage takes too much from the profit margin in a year without insurance claims. The hardest check for me to write is for crop insurance premiums when crop losses do not trigger claims and my crop income is barely going to cover expenses. Yes, there needs to be a safety net for farmers, but I do not believe crop insurance is the answer. Yes, Government subsidies for premiums buy down the cost. It is still too expensive for the money covered. If I had to pay the total premium, I would enroll only in catastrophic coverage. The crop revenue coverage program is not an option for me. My insurance yields are too low to make it work. I believe that the subsidy paid for crop insurance would be utilized better if it was placed into a farmer crop loss savings account with withdrawals made only when disaster losses occur. Many of my neighbors would rather have a fully funded disaster program paying on actual field losses instead of having to rely upon Federal crop insurance. In the last 2 decades, there have been numerous disaster programs for agriculture. Most have been under funded. We get our hopes up on the promise of getting relief from economic loss on a natural disaster only to get half. Before Freedom to Farm, acres and yields were established as a normal basis back in the 1980's. Today the AMTA payments are made according to those 20-year-old acres and yields. Those established acres and yields do not reflect sound farming practices nor the current yields of our crops. I realize that program acres and crop yields are used as a vehicle to make those AMTA payments, but this is an antiquated method. Making price support payments based on a formula tied directly to the actual production of each crop would make more sense. This is what makes the loan deficiency payment work. The problem is, that with extremely low prices, the payment limitation rules keep us from getting the full value for our crop from the loan deficiency payment. At this time, I see that this committee needs to be considering the safety net for agriculture. We need the removal of trade bar riers, we need the removal of laws and regulations that detract from our profitably. Farming is complicated enough with weather, insects, and weed pests, broken machinery, and the cows breaking down the fence. We do not need excessive regulations to burden us. The enhancement of price discovery at a fair market value for our crops and livestock that is tied more closely to the actual cost of production would help in keeping agriculture profitable and farmers financially solvent. Thank you for listening to me today. [The prepared statement of Mr. Hinton appears at the conclusion of the hearing.] The CHAIRMAN. Thank you very much. Mr. Kimbrell. STATEMENT OF CASEY KIMBRELL, CORN AND WHEAT PRODUCER Mr. KIMBRELL. Thank you, Mr. Chairman and members of the House Committee on Agriculture. I really believe you are sincere in wanting to hear from producers on agricultural policy, and I am honored to have the privilege to speak before you this morning. My name is Casey Kimbrell. I am a full-time wheat and corn farmer from Moore County, TX. I currently rent 1,000 acres of irrigated cropland, and I'm making payments on an additional 160 acres. I grew up on a small farm in Castro County, and I've had an active interest in agriculture since my youth. I began farming on my own in 1994 with the help of an FmHA direct operating loan. Now, many people criticize the FSA Loan programs, but I believe they're essential to the future of American agriculture. Young farmers would have no other way to get started in this business without the FSA Loan program unless they came from a wealthy family. The current instability in agriculture, however, makes this program seem like a waste of taxpayer dollars. When I received my operating loan in 1994, I was required to attend a borrower training course. And of seven young producers who took the course at the same time I did, I'm the only producer still in business. Now, policy failed those producers. This is a monumental statement for the need of a farm policy that promotes stability. I would like to ask your consideration of an amendment to the current farm bill which promotes stability at the farm gate while allowing producers to maintain the flexibility of the current farm law. This amendment called the Food Security and Land Stewardship Act, it's also called the Flexible Fallow Program, can help improve farm income with lower Government cash outlays compared to the current record-level spending. The basic premise of the program is to give producers the voluntary option of creating conservation use acres as a percent of their planted acres in exchange for higher loan rates. This act is strikingly similar to the Flexible Parity Act of 1978 proposed by then Senators Bob Dole, John Tower, and Strom Thurmond, among others. |