Farm, Nutrition, and Bioenergy Act of 2007 -- Continued

Floor Speech

FARM, NUTRITION, AND BIOENERGY ACT OF 2007--Continued -- (Senate - December 13, 2007)

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Mr. GRASSLEY. Mr. President, what the Senator from Montana is trying to do has to be done if we are going to have justice for the family farmer. We have been involved in suits regarding the packing houses for 20 years. I remember when I first came to Congress, we were trying to overturn the Illinois Brick case because it stood in the way of the family farmer getting justice in business. So you end up fighting the National Manufacturers Association and the U.S. Chamber of Commerce to bring justice to family farmers.

Finally, in a lawsuit down in Alabama, we get a jury who says the family farmer is right, but you get a judge who overrules the jury.

Now, I want to speak about not just this particular case, because Senator Tester is doing that, but I hope everybody in this Senate remembers that on several different occasions, everybody in the food chain beyond the farmer's gate was lining up against the farmer. I will cite just a recent example in regard to food and fuel and the ethanol issue and corn going to $4 and the price of food going up and every farmer getting blamed for it. Every person in the food chain outside of the farmer's gate was involved in that conspiracy that had nothing to do with the price of food rising, but the family farmer got blamed for it when food went to $4--or when corn went to $4. But when the price of corn went down to $2.85, I didn't see the price of food go down. But the conspiracy exists.

This court case and this judge and this ruling on the Packers and Stockyards Act is contributing to that conspiracy. We need to get behind it and get some justice for the family farmer.

Now, if you want to know why there is a justification in doing what we are doing, all you have to do is go to a statement that a CEO of a major corporation made a few years ago--a little bit unrelated to this, but somewhat related to it--which is: Why do slaughterhouses and packing companies own livestock? We own livestock, the answer was, in a very candid way; we own livestock because when prices are high, we kill our own, and when prices are low, we buy from the farmer.

What we need is a marketplace that has a great deal of transparency. We fight, trying to get information on sales from these packing companies under price discovery. We pass legislation to make price discovery real. Then we get regulations from the U.S. Department of Agriculture--we get regulations from the U.S. Department of Agriculture to the extent that we do not meet the goals of the legislation, and we don't get as much information under the regulations of the Department.

I had a staff person who just wanted to go back to Iowa and work for the Department of Agriculture. He is going to work for the Packers and Stockyards Act. I said to him: You know, you want to go there because you don't want to do anything, because they don't do anything to help the family farmer. I didn't change his mind. He is still there working, and I hope he is doing a good job. He knows how I feel about it. Maybe he will actually get something done.

But we have to get rid of this attitude that you are going to let everybody beyond the farmer's gate gang up on the farmers, particularly when there is a court case where the jury is giving justice to the farmers.

We have to pass this amendment so we get justice for the family farmer.

I yield the floor.

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Mr. GRASSLEY. Madam President, it would be easy to say I associate myself with the remarks of the Senator from Kansas and let it be that way. But I was around when we set up the Federal crop insurance program. I wish to reflect on the rationale behind it and then, consequently, why I am going to vote against Senator Brown's amendment.

Remember, for decades of a farm program, we may have had some crop insurance through the Government--and for hail through the private sector--that farmers could buy for some protection, but, for the most part, against natural disasters people relied upon the political whims of Congress to vote for or not to vote for disaster aid.

So this crop insurance program was put in place to give farmers the ability to manage their risk, let the individual farmer make some determinations so he can take risks out of farming, out of the natural disasters that are connected with it--even now, you can take some of the price questions out that are involved with it--and manage his own risk as opposed to relying upon the Senators and the Congressmen to vote or not to vote or when to vote for disaster relief.

So we put this in place. In order for it to be successful, you have to have a network to carry it out. This network is a private-sector network. I think it is working very well. I think it is in jeopardy if the Brown amendment is adopted.

So I have some concerns about the amendment. It could have some very detrimental impacts on the crop insurance program that is so valuable to rural America. So I urge my colleagues to oppose this amendment because I do not believe the amendment is reform. It moves us back to a time when there was more of a reliance upon the political whims of Washington to devote disaster relief.

The amendment seeks to further cut support of the Federal crop insurance program by several billion dollars simply to fund other projects. Additional cuts beyond what the Agriculture Committee has already adopted will prevent the program from providing assistance to America's farmers that is so vital to risk management.

Over the years, Congress has insisted on having the Federal crop insurance program reach out to all farmers, especially small, beginning, and limited-recourse farmers. This is to be done in a fair, equitable, and nondiscriminatory manner, serving as an effective risk-management tool that all can use.

According to the Department of Agriculture, the program is succeeding at this objective. Additionally, crop insurance has become essential to many farmers in securing credit from a bank, rental agreements, as well as providing confidence to more effectively market their crops through the futures market where they can capture higher prices.

The farmers in my State and across the country have used this tool over and over. It must be effective or they would not be using it and paying the premiums each year.

The Senate Agriculture Committee reported a farm bill that contained a two-point cut to the administrative and operating reimbursement, a cut that represents nearly $750 million in reduced program cost. Any cuts to the A&O reimbursement rate beyond those two points that were agreed upon by the committee will likely undermine the program by threatening the service America's farmers both need and deserve.

Further cuts could also jeopardize the continued viability of the private delivery system that is vital to the program's success. This could put private-sector employees out of work and result in the hiring of new Federal employees to serve farmers. Private-sector delivery is efficient and results in good services.

Approximately 30,000 jobs are created by this industry. Those would be in jeopardy, and we would not have small farmers and ranchers serviced the way they are now.

Further, the amendment's proposal to increase the quota share could weaken the crop insurance program and may result in private insurers exiting the program.

In fact, increasing the quota share is counter to the Federal policy of the past 25 years, which successfully has shifted more risk to the private sector for two primary reasons. First, private companies do a better job at loss adjustment. Both the Inspector General and the GAO have repeatedly focused on that point. Second, by shifting more risk to the private sector, Federal costs should be lower over time, as companies have more financial responsibility for indemnities.

It has taken more than 25 years, and we do not want to lose that 25 years.

As a matter of transparency, I wish to tell everybody in the Senate that I participate in a crop insurance program. My constituents ought to know it, and my colleagues voting on it ought to know that as well.

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