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CONTENTS

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Barrett, Hon. Bill, a Representative in Congress from the State of Nebraska,

prepared statement

Boswell, Hon. Leonard L., a Representative in Congress from the State of

Iowa, prepared statement

Chenoweth, Hon. Helen, a Representative in Congress from the State of

Idaho, prepared statement

Lucas, Hon. Frank D., a Representative in Congress from the State of Okla-

homa, prepared statement

Peterson, Hon. Collin C., a Representative in Congress from the State of

Minnesota, submitted material

Pomeroy, Hon. Earl, a Representative in Congress from the State of North

Dakota, prepared statement

Submitted material

Smith, Hon. Robert F. (Bob), a Representative in Congress from the State

of Oregon, opening statement

Stenholm, Hon. Charles W., a Representative in Congress from the State

of Texas, opening statement

Thune, Hon. John R., a Representative in Congress from the State of South

Dakota, prepared statement

WITNESSES

Adams, Gary M., program director, Food and Agricultural Policy Institute

Prepared statement

Ambrose, Al, on behalf of the Coalition for Competitive Food and Agricultural

Policy

Prepared statement

Gardner, Bruce L., professor, Department of Agricultural and Resources Eco-

nomics, University of Maryland

Prepared statement

Glickman, Hon. Dan, Secretary, U.S. Department of Agriculture

Prepared statement

Hamilton, Jack, president, National Cotton Council of America

Prepared statement

Submitted material

Harl, Neil E., professor of economics, Iowa State University

Prepared statement

Kleckner, Dean, president, American Farm Bureau Federation

Prepared statement

McLain, Phil

, past president, National Association of Wheat Growers

Prepared statement

Northey, William H., past president, National Corn Growers Association

Prepared statement

Skees, Jerry R., professor, Department of Agricultural Economics, University

of Kentucky

Prepared statement

Winter, Ted, National Farmers Union

Prepared statement

SUBMITTED MATERIAL

Goldberg, Gary, national president, American Corn Growers Association

183

STATE OF THE AGRICULTURAL ECONOMY

THURSDAY, JULY 30, 1998

HOUSE OF REPRESENTATIVES,
COMMITTEE ON AGRICULTURE,

Washington, DC. The committee met, pursuant to call, at 2 p.m., in room 1300, Longworth House Office Building, Hon. Robert F. (Bob) Smith (chairman of the committee) presiding.

Present: Representatives Combest, Barrett, Ewing, Doolittle, Goodlatte, Pombo, Smith of Michigan, Everett, Lucas, Lewis, Chenoweth, Bryant, Foley, Chambliss, LaHood, Emerson, Moran, Blunt, Schaffer, Thune, Jenkins, Cooksey, Stenholm, Condit, Peterson, Dooley, Clayton, Minge, Pomeroy, Holden, Baesler, Farr, Baldacci, Berry, McIntyre, Etheride, John, and Boswell.

Staff present: Paul Unger, majority staff director; Bill O'Conner, policy director; Pete Thomson, legislative director; John Goldberg, professional staff; Mike Neruda, Keith Menchey, Callista Bisek, assistant clerk/scheduler; Wanda Worsham, clerk; Chip Conley, minority staff economist; and Anne Simmons.

The CHAIRMAN. The committee will come to order. We have an excellent list of witnesses today, and therefore as usual I will have a short statement. I will then call on the ranking member, Mr. Stenholm.

OPENING STATEMENT OF HON. ROBERT F. (BOB) SMITH, A

REPRESENTATIVE IN CONGRESS FROM THE STATE OF OREGON

The CHAIRMAN. There is no question in anyone's mind here on this committee and throughout the country that we have problems in farm country. Prices have declined precipitously for farmers and ranchers. Many producers are wrestling with multiyear crop losses and others are suffering as a result of this year's severe adverse weather. Livestock prices are down, and in some parts of the country forage is virtually non-existent. It is a political reality that we will have to address this situation, as we have faced all challenges to agriculture, together as a committee.

For this reason, Mr. Stenholm and I thought it would be helpful to our members as we went forward with a common understanding to analyze what is occurring in the country and to ask representatives of the various areas of the United States to come here today and talk to us. If we are to be responsive and responsible, it is critical that we understand our own problems in this country and that of our neighbors.

(1)

Therefore, this hearing is intended to help to define the nature of the economic, of the disease, of the weather problems being faced in the upper Midwest and Oklahoma, Texas, North Carolina and the Southeast, and wherever they may be in the agricultural community. And that again is the reason that Mr. Stenholm and I and the leadership here joined together to try to address the long-term issue of agriculture when we advocated forthrightly and aggressively a square deal for agriculture which included lifting sanctions for foodstuffs to go into Pakistan and India, which was accomplished; to normalize relations with China, which was accomplished; and indeed to give the tools necessary to this administration and to all of us the opportunity to trade internationally with the support and funding of the International Monetary Fund and the passage of fast track.

Now if we are indeed going to go into 1999 with the tools that this administration needs, and we all need to rectify some of the many problems we have around the world and to reduce barriers against our products coming into those nations, we can't compete anywhere in the world, we can't compete if there are barriers and tariffs against our products. Those are the reasons that we were most aggressive on international trade.

In the short term, we have placed crop insurance on a program that is not subject to annual problems, and we agree that it is very possible that crop insurance ought to be revisited to see if it is taking the proper direction for our farmers.

We aggressively reached out and supported research which many of us believe is the future for agriculture in this country. And beyond that, we will pass next Monday the Emergency Farm Financial Relief Act which will place $5.5 billion in the hands of farmers across the country by the 1st of October which we think will help the cash flow immensely of farmers who are facing very difficult situations.

Before the August recess, I anticipate that there will be many other ideas, maybe ideas coming out of this hearing that we can address with respect to the disaster and income problems in farming. We have a responsibility, I believe, to consider each one of them. So today we will carefully weigh the testimony of our witnesses about the nature of the problem and about some of their thoughts of rectifying some of these issues, and together we will craft productive responses.

I would like to recognize the gentleman from Texas, Mr. Stenholm.

OPENING STATEMENT OF HON. CHARLES W. STENHOLM, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS

Mr. STENHOLM. Thank you, Mr. Chairman and thank you for holding this hearing today. It has been a long time coming for us.

When we passed the 1996 farm bill which was definitely a change, a new direction for U.S. farm policy, there were a lot of concerns expressed at that time, and many felt like we never got a good chance back in 1995 and 1996 to in fact explore what might happen under this new direction.

And I think it is very timely now that we are looking in year 3 to see what is happening. There is evidence that the safety net that

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