SECTION: CAPITOL HILL HEARING TESTIMONY

LENGTH: 402 words

COMMITTEE: SENATE AGRICULTURE, NUTRITION AND FORESTRY

HEADLINE: 2002 FARM BILL

TESTIMONY-BY: RICHARD LUGAR, SENATOR

AFFILIATION: INDIANA

BODY:
Senator Lugar Opening Statement Hearing of the Senate Agriculture Committee Tuesday, July 17, 2001

Mr. Chairman, thank you for holding another farm bill hearing. I commend you on last week's hearing where a number of commodity proposals were thoroughly considered.

In reviewing the agenda for today's hearing, I was once again reminded of the significance of Trade Promotion Authority (TPA) for agriculture. About forty-five per cent of our nation's rice crop is exported. (It is also interesting to note that previous key rice markets are countries against which the United States placed unilateral economic sanctions). Rice farmers have therefore taken a double hit in the trade area. By Congressional inaction on Trade Promotion Authority, the message to rice and other farmers is clear ---- you are not a priority to this Congress.

Two topics on today's agenda represent extraordinary public policy failures - the sugar and peanut programs. According to the General Accounting Office, forty percent of the benefits of the sugar program go to only one percent of the growers. While the farm bill envisioned a sugar program that would operate at no cost to taxpayers, last year USDA purchased $ 54 million worth of sugar, initiated a PIK program and now pays a million dollars a month in storage fees for surplus sugar. The sugar program costs taxpayers $ 465 million in fiscal year 2000.

The peanut program is a good example of outdated, market- controlling federal farm policy. Supply is managed by an arcane national poundage quota and import restrictions. The price support feature of the program has two tiers - one for domestic food use and one for peanuts crushed into peanut oil and meal.

The current national peanut policy is a combination of efforts to hold on to a quota system that benefits quota holders, not necessarily peanut producers. More than sixty percent of the peanut quota is not produced by the quota holder. Quota rents add 12 cents per pound to the cost of peanuts to consumers.

I am heartened by reports that some peanut growers are attempting to develop proactive peanut reform ideas and look forward to reviewing their proposals, especially if market-oriented. My personal commitment to major reform in the sugar and peanut programs will be vigorously reflected as farm bill development proceeds. Again, Mr. Chairman, thank you for holding today's hearing.



LOAD-DATE: July 18, 2001