Copyright 1999 Federal News Service, Inc.
Federal News Service
SEPTEMBER 14, 1999, TUESDAY
SECTION: IN THE NEWS
LENGTH:
1705 words
HEADLINE: PREPARED STATEMENT BY
RYLAND
UTLAUT
CHAIRMAN OF THE NATIONAL CORN GROWERS ASSOCIATION
BEFORE THE
HOUSE COMMITTEE ON AGRICULTURE
BODY:
Mr. Chairman, of the committee, my name is Ryland Utlaut. My family
and I grow corn and soybeans near Grand Pass, Missouri, and I currently serve as
chairman of the National Corn Growers Association (NCGA), representing more than
30,000 farmer members nationwide.
Thank you for the opportunity to testify
before the committee today. In early August, nearly 200 farmers visited
Washington and told the story about the state of the farm economy. During that
time, a NCGA task force, made up of growers across the nation, spent countless
hours shaping NCGA s response to the current situation. I am happy to be here
today to share our recommendations with Congress to deal with today's dire
situation. Let me begin by first touching briefly on where we are today.
It's no secret to anyone in this room that the price of corn and other
commodities has declined dramatically in recent years. Farmers received an
average price of $3.24 per bushel for corn produced in 1995. That price dropped
to $2.71 per bushel for 1996 corn and $2.43 for 1997 corn. The 1998 marketing
year ended August 31 with an average price of $1.95 per bushel, and the U.S.
Department of Agriculture, most recently, projected the price for 1999 corn to
between $1.75 and $2.15 per bushel. Yesterday, I was bid by my elevator $1.69
per bushel.
Our current problems are caused by a complex web of factors, not
the least of which is weak worldwide demand compounded by ever-increasing U.S.
stocks. Lately, it's been popular to pin all of our problems on the Freedom to
Farm provisions of the 1996 Farm Bill. But Freedom to Farm did NOT cause the
current economic crisis in agriculture and abandoning it is not the answer. The
nation's corn growers continue to support a market-oriented approach to farm
policy -- an approach that allows farmers to make the production decisions for
their operations and focuses on building demand for corn both in the United
States and abroad.
But if Freedom to Farm is going to work, there are other
factors that need to fall into place. We need a commitment to research to keep
us competitive in the future by unlocking new uses, maximizing production levels
and preventing major disease problems. We need affordable, effective crop
insurance tools to help us manage the risk inherent in an industry dependent on
weather. We need a strong global economy and access to markets around the world.
We need a tax system that allows us to keep a reasonable portion of what we own.
We need viable, efficient transportation systems to best serve our customers at
home and abroad. And because those things are not fully in place, America's
farmers find ourselves in a very difficult position today.
Despite the
fundamental soundness of Freedom to Farm, the current price situation
underscores the fact that, regardless of how good a farm program is, there is
always the possibility that farmers' cash income will not cover production costs
and other expenses. In those cases, we need the federal government's help to
address problems that are beyond farmers' control. That is why we are all here
today.
Given the current state of the farm economy, there's clearly a need
for assistance. The trick is how best to provide it. Farmers need immediate,
short-term relief to help them weather the current crisis. But at the same time,
we cannot lose sight of the importance of forward-thinking, long-term policies
that will help us avoid future farm crises by building stable markets for our
products both at home an abroad. That said, the recommendations I will outline
for you will attempt to encompass both.
To address the current economic
crisis facing U.S. agriculture, NCGA urges Congress to take immediate action in
the following areas:
* Market Loss Payments -- Support emergency market loss
assistance to provide immediate, short-term relief for struggling farmers.
Specifically, an emergency market loss payment equal to 100 percent of a
producer's 1999 Agricultural Market Transition Act payment.
*
Payment Limitation -- Support changes to the marketing assistance loan program
to ensure that a producer's full production is eligible for loan deficiency
payments (LDPs). Current payment limitation rules will severely restrict
marketing options, increasing loan forfeitures and storage and interest costs.
* Storage -- Support the restoration of a storage facility loan program and
enactment of an Orderly Marketing Program to provide short-term storage
assistance without encouraging the stockpiling of grain. All corn would be
eligible for the six-month program. Participating farmers would receive a
sliding-scale payment of three cents for each bushel stored for the first two
months, two cents per bushel for the third and forth months, and one cent per
bushel for the fifth and sixth months -- or a maximum of 12 cents per bushel
over six months.
* Risk Management -- Pass crop insurance reform legislation
that increases affordable risk management options for all producers. The
preferred means of doing this is by maximizing subsidies at the highest levels
of coverage. To reinforce the importance of producer- driven risk management and
provide financial assistance to producers, 1999 crop insurance premiums should
be waived.
* Trade -- Loss of export sales due to the Asian economic crisis,
unwise U.S. sanctions policies and trade protectionism against corn and corn
products is a major contributor to today's price problems. Congress and the
administration must take steps to restore export markets with a goal 2.5 billion
bushels this marketing year. Specific actions that should be taken to achieve
this goal include:
o reform of U.S. sanctions policies that restrict
shipment of food, feed and medicine, with an immediate focus on lifting
sanctions against Cuba;
o support for China's accession to the World Trade
Organization;
o enhanced funding, support and use of international market
development programs;
o resolve trade disputes with Mexico regarding high
fructose corn syrup;
o responsive and aggressive implementation of food aid
and donation programs in countries where this will build long- term demand and
not disrupt commercial sales.
After Congress completes its work on current
pressing legislation, producers and legislators must work together to avoid the
problems being faced today and to ensure the viability of this nation's
agriculture industry in the years to come. To this end, the NCGA urges Congress
to concentrate its efforts on: * CRP and Acreage Idling -- Oppose acreage idling
efforts that will result in global shifts in production.
Short term,
mandatory idling proposals will not work. Congress should support full
utilization of the Conservation Reserve Program at its current 36.4 million acre
cap. In addition, NCGA recommends that continuous enrollment acres be fully
supported and removed from the existing acreage cap.
* Transportation --
Support authorization and funding for needed improvements to the aging lock and
dam system in order to help farmers ship their grain more efficiently and
cost-effectively.
* Ethanol Market Development -- Support efforts to
increase the use of clean-burning ethanol in reformulated gasoline, a move that
could add 20-50 cents to the value of every bushel of corn grown in the United
States.
* Taxes -- Support efforts for a more fair and equitable
tax structure including; further capitol gains
tax relief, repeal of the federal
estate tax, and immediate full deductibility of health
insurance premiums.
Mr. Chairman, Congress has the opportunity, through the
pending Agriculture Appropriations Conference, to assist their farmers through a
difficult time. NCGA was fortunate to have been given the opportunity to assist
in the development of the Senate Farm Aid package and we feel that it is a step
in the right direction for our producers.
As you know, the Senate version of
the fiscal year 2000 Agriculture Appropriations bill (S. 1233), passed August 4,
contains roughly $7.4 million in farm assistance. The bill includes a number of
NCGA- supported provisions, including:
* As mentioned earlier, a provision
for direct payments to farmers equaling 100 percent of a producer's 1999 AMTA
payment. For corn growers this equals 36 cents per bushel.
* Funding to help
producers purchase additional crop insurance coverage for the 2000 crop year.
* A provision raising the cap on payment limitations in the loan deficiency
program (LDP) from $75,000 to $150,000.
Also included in the bill, and
critical to members of the NCGA, is a sanction reform amendment sponsored by
Senators John Ashcroft (R-MO) and Chuck Hagel (R-NE). The amendment requires
prior congressional approval before the President imposes unilateral sanctions
that include agricultural products or medicine, and it also requires the
president to cease implementation of such sanctions already in place.
Before
I close, I would like to take this opportunity to thank the committee for their
work on long-term risk management solutions. Specifically, NCGA supports this
committee's efforts to provide long term risk management in the form of H.R.
2559, the Agricultural Risk Management Act of 1999. The $6 billion the bill
provides for years 2001 through 2004 to boost subsidies for crop insurance
premiums, expand the list of covered crops and provide incentives for developing
new policies is crucial to today's farmers and demonstrates the committees
understanding of the tools necessary for a prosperous farming economy. It is
NCGA's hope that this measure will be considered before the full Congress soon.
Mr. Chairman, members of the committee, the nation's corn growers thank you
for holding this timely hearing and we appreciate the opportunity to express our
views. I'd be happy to answer any questions or provide more details on the
recommendations I've just outlined.
The need for Congress to pass an
emergency assistance package is very real. Farmers throughout the country are
struggling and the time to act is now. Many producers will not be able to
sustain their farms and families on today's prices. We look forward to working
with you in the weeks to come to fine-tune this vital package.
END
LOAD-DATE: September 15, 1999
