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The other concern has to do with the flexibility given our short staff in situations where farmers can take a portion of the payment at any time. Some have construed the legislation to allow a farmer to come in and get 10 percent of his payment one month, 10 percent the next month, and 20 percent the following month.
I will have to tell you, if you want to start getting calls into your office because of confusion-and my office as well—that will create it. We need to set some reasonable standards about how those payments are going to be advanced to make it easy for those folks out there in those county offices to do their jobs. In principle we support the legislation and we want to work with you to see that it is passed.
Just a couple of final points. The farm bill imposes a lifetime ban, without exception, on USDA loans to family farmers who have received debt forgiveness. There is no such rule for obtaining private sector credit from any bank in America.
When I was out in Texas, I talked to several farmers who said, "We restructurrd in 1989 or 1990 or 1991, and what can we do if we need new loans" and they may or may not qualify for certain loans, but we have requested congressional authority to give creditworthy USDA borrowers a second chance. Unless this provision changes, some producers will be forced out of business even though they have the ability to repay the loans they need, and I urge Congress to work with us to try to fix those provisions.
Finally, let me say on the export front, I generally agree with you, Mr. Chairman, on most of your comments in terms of opening markets, but I will have to tell you that the No. 1 priority is the IMF assistance. That is what is going to get stability in the world immediately so these countries can use our GSM credits and buy our products right away.
I want to see us do nothing to take away our ability to get the IMF assistance adequately funded, aiding in the economic recovery of Asian economies which buy about 40 percent of American agricultural commodities.
I think I have summarized the statement as fast as I can. Short term-short term, we have to get emergency assistance. The agricultural appropriations bill provides it. We are going to get you a fuller assessment of damages in a couple of weeks, and I think we need to provide the augmentation of emergency assistance this year before you leave so that livestock producers and crop insurance holders who are not adequately covered can be protected.
We support the moving up of AMTA payments. We hopefully can work together to make sure that language is responsible so we can make those payments as quickly as possible. We support the IMF assistance. We think that is critical for American agriculture.
We do have some problems. It was a lot more fun being Secretary in 1996 and 1997 than it is this year, but I think we have the opportunity to do some positive things to help out, and that is what I would like to see us do working together.
Also, France has approved the two corn GMO varieties. I said this once before and then they told me I made a mistake. We should be able to participate in the remaining Spanish corn tenders and move a substantial quantity of corn there in the coming weeks. I thought I should mention these breaking developments.
Thank you, Mr. Chairman.
[The prepared statement of Secretary Glickman appears at the conclusion of the hearing.)
The CHAIRMAN. The other part of that tariff rate quota fulfillment is substantial to Spain. I have forgotten, what is it?
Secretary GLICKMAN. There are about 600,000 tons left.
Thank you. And as you know, we worked together in Europe, and there is a lot of pressure upon the European Union and upon France to fulfill their commitment which they have finally responded to, and it will make a difference.
For clarification, I want to ask you about the language in the Senate bill that you are asking us to support. We understood that it was originally designed to impact North and South Dakota and Minnesota, which was designed to take care of losses in 3 out of the 5 years which they have experienced.
Having said that, looking at the language it does not narrowly identify that situation. It appears as though it is_open now to drought conditions and severe weather conditions in Texas and the Southeast and all across the Nation. With that in mind, we understood that the cost would be about $500 million, now expanded to $800 million if we had the condensed version, 3 out of 5-year loss. What is the version that you propose with the expanded language?
Secretary GLICKMAN. I can't give you the amount yet, but if you used the same criterion of 3 out of the 5-year loss, coupled with the livestock feed assistance, coupled with the planting in the areas under water over an extended period of time and you based it on the amount of losses that occurred around the country, it is probably going to be significantly more than $500 million using that same criteria.
My belief is that we can get you, sometime in August, the nature of the loss and what costs would be under that criteria or under other criteria-and the conferees working with you are going to have to decide what eligibility criteria should be used. All I can tell you is at the time we came up with that proposal, I do not believe that there had been an adequate assessment done of the damage in the Southwest, particularly in Texas, and that damage is considerably higher now than we anticipated that it was going to be.
The CHAIRMAN. I only press you for accuracy, Mr. Secretary. So are you suggesting that we limit the language to 3 of the 5-year losses?
Secretary GLICKMAN. I would say the following. Chairmen Cochran and Skeen and the appropriators had asked us to come up with basically a formula by which we would spend that $500 million. If you notice, their amendment does not provide any specific allocation for how those funds are to be spent.
The CHAIRMAN. That is right.
Secretary GLICKMAN. So we came up with the proposal you could spend it that way, and we thought that the $500 million figure would be an adequate amount.
Now, saying that, I want to make it clear that while North Dakota and South Dakota and Minnesota were the prime places where there were problems, there were also disasters that occurred in other parts of the country, and this was not meant to just deal
with one region of the country alone. There will have to be some limiting criteria to control the costs, I will grant you that, but the damage in other parts of the country is very significant.
The CHAIRMAN. We understand that, and I am attempting here to identify exactly what you are requesting. So you want to open up the criteria beyond 3- to 5-year loss?
Secretary GLICKMAN. We stand with the letter that we wrote on that criteria because we were requested by Congress to come up with some criteria. And we will let you know how much that criteria will cost as we do our full assessments in expanded parts of the country. But, we will work with the Congress if you decide that you want to modify that criteria in some degree. There was a lot of rush at the time to come up with some disaster assistance, and we came up with a criteria that we thought could fairly spend those dollars.
The CHAIRMAN. Your idea is to spend $500 million only?
Secretary GLICKMAN. No. The Senate put $500 million in the account. They asked us to come up with some funds to do that. I think the $500 million was basically based on what they thought and what we thought the extent of the damage would be at the time.
The CHAIRMAN. In North Dakota, South Dakota and Minnesota?
Secretary GLICKMAN. Primarily, but nationwide as well. It was mostly in the northern Plains. The damage now is clearly greater than that, and we are trying to figure out an assessment of what it is. If you live within that $500 million, those funds will have to be severely sequestered down to provide money for other States with disaster. I have been to Florida and Georgia and South Carolina and I can tell you that there are portions of those States that are every bit as bad as those in the Dakotas and Texas, although the Dakotas and Texas seem to be the worst overall in regional areas.
The CHAIRMAN. I am just trying to identify. Of course, if you expand the 3 losses out of 5 years,
you have gone much beyond the issue.
Secretary GLICKMAN. The Congress will have to determine if they want to go this road—what the criteria ought to be. The fact is if you go 3 years out of the past 5, 3 out of 5 where indemnities have been paid, and you use that as the period to augment crop insurance, virtually every State that suffered a disaster will have large areas that will be covered under that as well.
The other thing is the Livestock Feed Assistance Program is one that will probably affect the State of Texas and perhaps Oklahoma even more than it will affect the Dakotas.
The CHAIRMAN. Very quickly, you purchased $250 million worth of wheat for the assistance, the Food Assistance Program from the CCC stocks?
Secretary GLICKMAN. Right.
The CHAIRMAN. Which have in them some $30 billion of money. Have you considered using additional parts of CCC to purchase either feed, which you can do, or other grains for other purposes, using the authority you already have to assist in this problem?
Secretary GLICKMAN. I would ask Mr. Schumacher to come up here, if I might, because it is a good question. I told my folks we need to use the authorities of the CCC as liberally as we possibly can, and we need to have good lawyers who don't necessarily respond to questions the way that you expect them to, but are creative and imaginative in using this fund with a $30 billion authorization to it, although its use eventually requires appropriations.
The CHAIRMAN. Is Gus a good lawyer?
Mr. SCHUMACHER. Just to bring you up to date on the initial question, the President authorized us to move forward with 2.5 million tons of purchases under the CCC charter, roughly equivalent to about $250 million without transportation included. The Secretary tendered for 550,000 tons last Friday. Additionally, purchases will be made in the coming weeks. We intend to ship a portion of the 2.5 million tons by the end of the year. We need to finalize the plans with the different countries and are negotiating agreements with recipient countries. This by and large has been focused, all has been focused on wheat, and we are also looking at wheat flour. A number of the countries have expressed an interest in that and we are going to work closely with USAID. We will keep you informed on that.
The CHAIRMAN. I appreciate that, Gus. I am going to ask you to look at the authorized $30 million that you have at your elbow to use, and to be aggressive about how you might improve the situation with the authority already given to the Secretary and to the Department of Agriculture. I wish you would do that.
Secretary GLICKMAN. Can we use that CCC money to buy livestock feed for domestic use? How aggressive can we be and what have our lawyers told us?
Mr. SCHUMACHER. The counsel has counseled us on interpreting the law. We can only use it to dispose of surpluses and then to move those for humanitarian purposes overseas. As far as I understand it from the attorneys, we are not permitted under the CCC Charter Act to use it for things like domestic livestock feed.
Secretary GLICKMAN. I think I would encourage your lawyers to work with us if you have a contrary view.
The CHAIRMAN. I think we ought to examine it carefully because I think that may be a narrow view, but we will be working with you.
Mr. STENHOLM. Just following up on the supplemental crop insurance benefits which was in the Senate-passed package of $500 million—if I understood you correctly, with the other States involved now in what is rapidly growing into a multistate disasteris $500 million enough?
Secretary GLICKMAN. In my judgment, no.
Mr. STENHOLM. Do you have an estimate what might be required to meet the same guidelines present in the Senate amendment?
Secretary GLICKMAN. I don't have a good estimate. I think you have to wait until August 12 when we get the crop reports. It is going to be substantially more than $500 million, in my judgment.
Mr. STENHOLM. What becomes even more important to us because do you have an answer from the leadership and the House of Representatives when the conference report between the House and Senate conferees might be concluded?
Secretary GLICKMAN. I do not.
Mr. STENHOLM. Mr. Chairman, do you have any information concerning when the conference will begin to work out the multiple details of this supplemental insurance
benefit? The CHAIRMAN. I can't answer the question. I do not know.
Mr. STENHOLM. I suppose it is reasonable to suppose it is not going to be done this week or next week?
The CHAIRMAN. Next week is the only time we are in, and the Senate is out next week. It would have to be done in the next day or two. So it would be done in September.
Mr. STENHOLM. That would be my assumption, also.
Mr. Secretary, you mentioned that the most critical aspect other than the supplemental benefits were the IMF funding. Have you received any assurances or any direction from the leadership from the House of Representatives when we might consider IMF funding?
Secretary GLICKMAN. No. I know that the President has repeatedly asked that this be put on the table and voted on as quickly as possible.
Mr. STENHOLM. Mr. Chairman, do you have any information as to whether we might consider IMF funding next week?
The CHAIRMAN. I don't have any direct information. The only information is that we will vote on IMF and fast track before we adjourn in October.
Mr. STENHOLM. So from the leadership of the House, we might guess that we will not consider IMF funding before we go home for the August break unless something changes, which we hope it does, and I know that you share that benefit?
The CHAIRMAN. I will be pressing to try to get a vote on IMF next week, as I have told you often.
Mr. STENHOLM. I would certainly join again with you, as many other members on the committee on both sides of the aisle, join with you in encouraging the Speaker of the House and which he indicated very strongly that we would be considering IMF funding before we went home for August. And I would hope that the leadership would see the importance of this, because we are literally playing with fire as wheat prices hit $2.11 in Texas today. We have some and that is—the same in all of your States. The prices are collapsing, and part of this can get to be very serious if the Congress has not exercised our responsibility dealing with IMF properly in this. So I certainly will join with you, Mr. Chairman, in encouraging the leadership of the House to take this up.
My final question, and you referred to it somewhat, the advance of the AMTÀ payments. I think it is important for us to understand these are not new dollars, these are dollars expected by farmers next year. I support this. It was on our immediate list when we started looking at what could be done. This would be one way that we could possibly help in this at a relatively modest cost. But I have found now in talking with bankers and producers that this is not a panacea. And as you responded to the chairman's questions a moment ago, I think it behooves all of us to understand that this can be a very complicated, and not nearly as helpful across the board, program as might first have been indicated by me and by others.