FOR IMMEDIATE RELEASE: March 13, 2002
Contact: Drew Goesl 

Lincoln Urges Senate Agriculture Leaders to Remove Payment Limitations Amendment from Farm Bill

Washington – U.S. Senator Blanche Lincoln (D-Ark.) garnered additional support for her protest against the inclusion of an amendment to the Farm Bill which she says will "discriminate" against Arkansas row crop farmers.

"In an era when family farmers of all crops are finding it increasingly difficult to make a living, it is inconceivable to us that the new farm bill would include a provision that makes it more difficult for farmers to achieve the competitiveness they need to survive," Lincoln said in a letter to Agriculture Committee Chairman Tom Harkin (D-IA) and Ranking Member Richard Lugar (R-IN). The letter was signed by 15 Senators.

Lincoln urged the two Agriculture leaders to eliminate the Dorgan-Grassley payment limitations amendment from the final farm bill when they meet with other House and Senate Conference Committee members to negotiate differences between legislation passed by the two chambers. Members of the Conference Committee are scheduled to meet for the first time today.

Lincoln fought vigorously against inclusion of the Dorgan-Grassley amendment in the Senate farm bill, and eventually voted against the final Senate legislation because, with the amendment, she said it disproportionately hurt southern producers of rice and cotton. Lincoln pointed to an independent study released by the University of Arkansas that confirms her contention that the Senate Farm Bill is bad news for Arkansas and its farmers.

The University of Arkansas Department of Agriculture prepared the analysis of payment limitations and their effects under the House and Senate farm bills. Lincoln noted that Arkansas farmers would lose more than $380 million if the Dorgan-Grassley amendment remained a part of the farm bill. The study found that payment limitations would reduce Arkansas farm payments up to $382 million and would affect up to 40 percent of Arkansas's rice and cotton farms.

As a member of the Agriculture Committee since arriving in the Senate three years ago, and as the daughter of a farm family, Lincoln is concerned about the provision because she said it would openly discriminate against Arkansas row crop farmers, ultimately limiting their ability to compete in the global marketplace. Lincoln's letter was co-signed by Senators Zell Miller (D-GA), Jeff Sessions (R-AL), Mary Landrieu (D-LA), Fritz Hollings (D-SC), Christopher Bond (R-MO), Strom Thurmond (R-SC), Richard Shelby (R-AL), Bob Graham (D-FL), Tim Hutchinson (R-Ark.), John Breaux (D-LA), Max Cleland (D-GA), Bill Nelson (D-FL), and Jean Carnahan (D-MO).

The text of Senator Lincoln's letter is attached.

March 12, 2002

The Honorable Tom Harkin Chairman, Senate Committee on Agriculture, Nutrition & Forestry 328A Russell Senate Office Building Washington, D.C. 20510

The Honorable Richard Lugar Ranking Member, Senate Committee on Agriculture, Nutrition & Forestry 306 Hart Senate Office Building Washington, D.C. 20510

Dear Chairman Harkin and Senator Lugar,

In an era when family farmers of all crops are finding it increasingly difficult to make a living, it is inconceivable to us that the new farm bill would include a provision that makes it more difficult for farmers to achieve the very competitiveness they need to survive. As you near conference negotiations of the new farm bill, we urge you and your fellow conferees to eliminate the Grassley-Dorgan payment limitations amendment for the following reasons.

First, payment limits disproportionately affect family farmers of highly capital-intensive crops, such as rice, cotton, and peanuts. Because of their relatively high costs of production, these crops require larger economies of scale. Since the Grassley-Dorgan amendment would apply an arbitrary, uniform limit across all program crops, it would hit growers of these crops first and would hit them hardest. Federal farm policy should seek to treat all regions fairly.

Second, limits on marketing loan benefits are counterproductive because they hit hardest when times are toughest. The lower the market price, the more costly the loan deficiency payment. Generic commodity certificates resolve this problem by extending loan support to all of a farmer's crop. Yet, the Grassley-Dorgan amendment would cripple the marketing loan program that has been the cornerstone of farm policy for two decades by rendering generic commodity certificates useless and undermining the safety net for all crops. Rice, cotton, and peanut farmers in both the Deep South and in the West would be discouraged from planting these higher value crops on land beyond the limitation threshold of acres. In some cases, farmers would be discouraged from planting any land in rice, cotton, or peanuts. Instead, their land would be dedicated to lower value crops, such as corn, soybeans, or specialty crops. As a result, prices for these other crops could plummet. For the other program crops, this would mean that their loan deficiency payments are that much more costly, so that corn farmers and wheat farmers would hit their own marketing loan limitations that much sooner. This is one reason why every major commodity organization opposed the Grassley-Dorgan amendment. In short, the smaller farmers from grain states would not be protected against rising land rents. To the contrary, they would become more vulnerable to volatile prices due to the entrance into the grain markets by former rice and cotton farmers desperate to find a way to hang on.

Thus, the Grassley-Dorgan amendment would produce a bitter irony for all farmers. Imposing stricter payment limitations would not necessarily save the smaller farmers of feed grains and other lower value crops. For that matter, putting the Arkansas rice farmer or the California cotton farmer out of business will not save the Iowa corn farmer or the North Dakota wheat farmer. These farmers are struggling because prices are lower worldwide and because current farm policy has inadequately responded to the crises these prices created. Freedom to Farm thrust our farmers into a distorted, volatile global marketplace without protections comparable to those depended upon by more heavily subsidized foreign competitors. Nothing the Grassley-Dorgan amendment could accomplish would change this. Yet, it would make it more likely that our farmers would go out of business, and that is not what federal farm policy is about.

We urge you to eliminate the Grassley-Dorgan payment limitations from the farm bill.

Sincerely,

Blanche L. Lincoln