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SUBMITTED BY HON. COLLIN C. PETERSON

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Minnesota Association of Wheat Growers
2600 Wheat Drive • Red Lake Falls, MN 56750
Telephone: 218/253-4311 or 800/242-6118 • FAX 218/253-4320

July 30, 1998

Honorable Robert Smith
Chairman, House Agriculture Committee
Fax 202-225-3774, 0917
Washington DC

Chairman Smith:

For the sixth straight year, fusarium head blight, a major wheat and barley disease commonly called scab, will affect crops this growing season in the Red River Valley of North Dakota and Minnesota. Coupled with low commodity prices and an erosion of farm equity, another poor crop season will result in an exodus of farmers from this region. This fact is not hyperbole.

The farm crisis facing this rogion is very real, and the 1990s may rival the 1930s as the worst period ever for agriculture in this region. Some blame the new "Freedom to Farm" legislation for this crisis. We believe Freedom to Farm can work, given adequate crop insurance, adequate production, and adequate markets. Now, however, we have none of those.

Research will belp solve scab. We strongly urge changes to make federal crop insurance better, and that self-imposed sanctions and unfair export competition be resolved. We commend lawmakers for already taking steps to move these policies in the right direction. However, the fruits of these changes will occur over the long-term. We cannot stress enough the fact that after five years of scab-induced crop louses, sis with this summer-farmers in this region bave Nosocially run out of time, and need help now.

We urge that emergency assistance be enacted. We point out that an assistance program is being considered for crop losses caused by El Nino in Califomia and some other states. We urge for an indemnity program, or a paid land diversion to take scab-infected acreage in disaster-declared counties out of production.

An emergency assistance measure would not compromise the principles of Freedom to Farm; rather, it would allow the forementioned bumps in tho road-scab, problematic crop insurance, sanctions, the Asian flu and unfair export competition to be fixed so

Freedom to Farm can work. If legislation can't be established to help farmers stay in production, then we urge a program to belp them get out.

[blocks in formation]

CC: Rep. Collin Peterson; Rep. David Minge; Sen. Paul Wellstone; Sea Rod Grams; NAWG

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SUBMITTED BY THE HONORABLE COLLIN C. PETERSON

Northwest Minnesota Farm Financial Information

Dollars/Acre Spring Wheat 1994-97 (Kittson/Marshall)

Non-Valley Farms

1996

1997

18.20

28.90

Dollars/Acre

1994

1995

Total Product Return

76.53

107.58

207.31

104.73

118.77|

137.00

179.13

147.59

Total Expenses
Net Product Return

Total Product Return 56.29 146.53 160.12 98.07

Total Expenses 151.12 161.94 167.07 170.46
Net Product Return -94.83 -15.41 -6.951 -72.39

42.24

-29.42

28.18

42.86

Ins. & Gov. Payments

50.45

25.73

Net Return

8.21

-3.69

46.38

-13.96

Examples: For a 2,000 acre farm, the Non-Valley area averaged $18,470 in net return each year for both family expenses and debt reduction. A 2,000 acre Valley area farm averaged a $380 loss in net return each year during this time. A $15/acre net return yields only $30,000 for family expenses and debt reduction on a 2,000 acre farm.

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