Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2004

AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND RELATED AGENCIES APPROPRIATIONS ACT, 2004

Mr. GRASSLEY. Mr. President, I rise to speak on an amendment that I think is coming up this afternoon. The reason I would like to have permission of the Senate to speak about it now is that I will not be able to be in the Chamber because of the Medicare conference.

AMENDMENT NO. 2078

Mr. GRASSLEY. Mr. President, I am speaking on the issue of the sense-of-the-Senate resolution by Senators DASCHLE, ENZI, JOHNSON, and THOMAS on the legislation that is now on the books called country-of-origin labeling.

I believe the American consumer has a right to know the country of origin of the meat they are purchasing, just as consumers know the origin of their clothes, their cars, and their cameras. Even the U.S. Department of Agriculture cites in its rule that recently came out that the survey findings show that country-of-origin labeling is of interest to the majority of consumers.

I said even the U.S. Department of Agriculture has said this because I happen to believe, in observing the U.S. Department of Agriculture over the last 12 months, that it has worked against the country-of-origin labeling legislation ever since it passed into law as part of the 2002 farm bill.

The initial cost estimates of the U.S. Department of Agriculture were outlandish, and thankfully the General Accounting Office called the U.S. Department of Agriculture on the basis of its claims. The U.S. Department of Agriculture then revised its cost estimates by lowering the potential cost of the program. This newly revised figure allowed for an overall cost range of between $582 million and $3.9 billion in the first years.

Upon closer examination, even the revised cost estimates of the Department of Agriculture appear to consistently overestimate the costs involved in implementing the country-of-origin labeling law due to the estimate's reliance upon industry-provided sources of material—not independent but from industry.

Clearly, the industry which is vehemently opposed to this legislation, it seems to me, would provide information which is self-serving. For that reason, I have a hard time accepting even the newest range of cost estimates even though it is far less than what came out last spring.

I am not here to say that everything the U.S. Department of Agriculture has done on this legislation is bad. The recently published proposed rules allow for the potential use of self-certification through affidavits to transfer original origin information from one level of the supply chain to the next. That leniency on self-certification is a good decision by the U.S. Department of Agriculture. Also, the Department estimates producers will have the least recordkeeping burden, with estimates that range between $180 to $443 per facility.

The reason I am giving U.S. Department of Agriculture credit for in part doing the right thing is that I want this process to continue. Clearly, I don't agree with every aspect of the recently published mandatory country-of-origin labeling law proposed rule, but at least the Department of Agriculture has given us something on which to chew. It is a decent start. We now have a 60-day comment period to improve the proposed rule.

I intend to not only do that myself but I intend to also let the Department know my views on it, and I am inviting Iowans—or let us say citizens from any State—to send in their information to the Department of Agriculture. They ought to even let their Congressmen and Senators know what they have told the Department about their view of this rule. This gives all of us a chance to get it even closer to the intent of the authors of the original legislation and to ensure that these rules and regulations aren't overly burdensome to the family farmer.

I believe we need to let the process go forward. The only way to do it is to protect funding for the mandatory country-of-origin labeling. That funding is in dispute because of action taken by the House of Representatives.

I hope through this sense-of-the-Senate resolution, we send a clear signal to the conferees that we should fund this program; in other words, funds going forward and the enforcement of the law that this Congress adopted in 2002 on the labeling of meat products.

It will be an awfully serious situation if we don't fund these rules and move forward with the enforcement of this law. People who don't want to fund it do not like the law, but it puts our entire food chain into jeopardy, on the one hand having to meet a law that went into effect in September 2002, and then in the next 12 months not having money to provide for the regulations to be carried out and make sure everybody knows exactly how this law is going to be enforced.

People who are opposed to this legislation ought to, if they do not like the law—obviously, I do like the law, and that is why I am for their sense-of-the-Senate resolution—introduce legislation and have it debated to see if they can repeal the old law. But they should not put the farmers, the processors, the wholesalers, the retailers, and eventually our consumers in jeopardy because of not having the money to move forward.

Not funding this is—as the other body has not funded it—subterfuge for the legislation not moving forward. Yet everybody is going to be involved with having a law on the books that is going into effect next year. The law is still the law. It is our job, if we put a law on the books, to make sure that it is enforced. If we don't want to enforce that law, we ought to repeal the law.

This issue of self-certification is very important. Originally, the idea from some people in the Department or the industry was that there ought to be third-party verification of the origin of the meat that the consumer is going to eat. Did it come from another country or did it come from America? Was it raised and processed here?

If you have third-party verification, you can understand why it costs the economy billions and billions of dollars. But that isn't how the Federal Government deals with the family farmers of America.

For all of the decades of farm programs we have had, the Federal Government has always dealt with the individual family farmer as an honest person. They would ask for certification from the farmer's point of view as to the law as he farmed, as he raised his crops, as he qualified for whatever help that might be involved from the Federal Treasury, and that the farmer was abiding by that law. There were always periodic and random audits that a farmer, including this farmer, would have to comply with, just as there might be a random audit of your income tax by the IRS. But the Federal Government has always assumed the farmer was honest when he certified something.

If that principle has been good for farm programs for the last 60 or 70 years, why isn't it good enough for a farmer claiming that livestock was raised in America and processed in America or whether it came across the line from some other country?

The last point I make is for the consumers of America and for the retailers of America.

For all of the years I have been in Congress, I have never heard from Montgomery Ward, Sears & Roebuck, Kohl Department Stores, or from Wal-Mart—I have never heard from anybody in America who processes or sells retail products—saying that products which come into this country from some other country shouldn't be labeled. I have never heard those business people complain about that. But all of a sudden, there is something to protect food for the consumer—just as we do with the consumer and any other retail product, not just to protect the consumer but to inform the consumer. Where does this product come from? T-shirts from Taiwan, South Korea, and China—you know it; it is on the label.

I have never heard any retailer or any wholesaler complain about that. But now that we are going to give the consumer the same knowledge about where their food comes from—from America or from some other country—somehow this is a big problem. You hear it from the packers, you hear it from the processors, and you hear it from the wholesaler and the retailer. For some ungodly reason, I am even hearing it from the national pork producers. I do not hear it from the Iowa pork producers. Are the national pork producers in bed with the big packers, the big processors, and the big retailers of America? Should the consumers of America not know whether that hog came from Canada or from a family farm in America?

The consumers are entitled to the same knowledge about the origin of the products they eat as what they wear on their body or what they use for a tool in their workplace. I think we need to move ahead with this country-of-origin labeling. That is why I hope my colleagues will support this sense-of-the-Senate resolution for a law that is on the books—a law that is going to go into effect in September of next year.

Why don't the people in the Congress of the United States who do not like that law and the interest groups outside that do not like that law have guts enough to come forward and repeal the law and have a clear-cut victory or a clear-cut defeat? Let us move on. Let us not have the subterfuge of not funding it.

I yield the floor.

BREAK IN TRANSCRIPT

Mr. GRASSLEY. Mr. President, prior to the 1996 farm bill, the annual cost-share assistance payment limitation for the Agricultural Conservation Program, ACP, was $3,500. With the advent of the Environmental Quality Incentive Program, EQIP, in 1996, the annual cost-share assistance payment limit was increased to $10,000 per year.

EQIP also instituted another change, rather than single year agreements, conservation agreements under EQIP were set at a minimum of 5 years to improve conservation benefits and increase farm payments. Hence, the 1996 law set a 5-year payment limitation of $50,000 for those rare instances in which a participant received the maximum $10,000 annual payment each of 5 years.

Between 1996 and 2002, the national average EQIP cost share amount per farm per 5-year contract was less than $10,000, or less than 20 percent of the $50,000 payment limitation.

Between 1996 and 2002, for animal waste storage structures, one of the most expensive practices eligible for EQIP assistance, the national average per farm per 5-year contract amount has been $13,573, also considerably below the $50,000 payment limitation at that time.

The 2002 farm bill increased the payment limitation nine-fold to $450,000 over the 6-year life of the farm bill.

The $450,000 limit was arrived at in the House-Senate conference committee. The Senate version of the farm bill had a 5-year $150,000 limitation. The House bill had a $200,000 limitation.

Amazingly, on the very last day of the farm bill conference the payment limit was increased to $450,000, three times greater than what the Senate had approved. This new number showed up out of nowhere, with virtually no discussion or debate in public.

The Senate bill contained an important provision related to the payment limit. All payments were made directly attributable to real persons by Social Security number. This direct attribution provision was intended to prevent participants from forming dummy corporations and partnerships for the purpose of getting around the payment limit and collecting multiple payments.

This provision was retained in the conference committee, so that at least the $450,000 limit was to apply to an individual or an entity regardless of the number of farming sites in an operation or the number or type of business arrangements the EQIP operator was engaged in.

In promulgating rules and guidance for the implementation of EQIP, however, USDA has decided to allow the $450,000 to be multiplied by the number of partners in a single farming operation. This essentially makes the limitation meaningless, since it allows business structures to be arranged to collect multiple payments.

While no single person could collect more than $450,000, relatives, employees, farmhands and others could be made partners that each could collect up to the maximum amount.

Farmer demand for EQIP remained very high throughout the 1996 farm bill period and its $50,000 multi-year limitation. Demand outstripped funding.

Congress responded in 2002 by increasing total funding for EQIP five fold, and I was heavily involved with that effort.

However, by simultaneously increasing the payment limit nine fold, the new $1 billion per year funding level may not result in more farmers being served, which was Congress' intention.

The ranking systems in many States being put in place to determine who wins EQIP contracts and who goes on the waiting list appears to be favoring the large farm/large contract applicants.

My amendment would scale the payment limit back to $300,000. This is still double the amount passed by the Senate in 2002, and more than adequate for 97.8 percent of EQIP participants.

My amendment does not scale back funding for EQIP. Rather, it provides that dollars appropriated by this bill cannot be used to pay USDA salaries and expenses to operate the EQIP program with payments greater than $300,000 per agricultural operation.

Adoption of this amendment will allow more farmers to participate in the program in the coming year. Adoption of the amendment will result in a fairer distribution of dollars within the program. Adoption of this amendment will prevent EQIP resources from being gobbled up by a few large contracts to mega farms.

This is a fair compromise, a good compromise. It provides access to the program by all types of farms and all sizes of farms, but it puts a limit on the amount of taxpayer support any one operation can receive.

If we do not pass this amendment, I think by the time of the next farm bill there will be lots of media attention focused on how this environmental quality cost share program has become a new subsidy program, paying out six and seven figure checks, for the Nation's biggest operations. And there will be questions about why an environmental program is leading to concentration and consolidation.

A $450,000 payment limit has no effect on 98.9 percent of all livestock operations. A $300,000 payment limit has no effect on 97.8 percent of all livestock operations. That means my amendment only affects 1.1 percent of livestock operations.

The 1.1 percent of mega-operations will still be eligible for $300,000. They just will not be able to take such a big piece of such a small pie. I do not think it is unreasonable to reduce full funding for the largest 1.1 percent of livestock operations so that more family farmers can participate.

So what I am saying is let's be careful. Let's be balanced. Let's increase the payment limitation, and avoid a "sky's the limit" approach.