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July 6, 2001

New farm bill presents challenge

By Rep. Larry Combest
Chairman, House Agriculture Committee

Life on the farm isn't easy, especially when uncontrollable circumstances arise, like wild market swings or devastating weather conditions. I grew up on a family farm, and I know the risks that come with working the land. During my years serving as your representative in Congress, I have used this background and my agriculture experience to shape federal policy that protects and strengthens the backbone of West Texas—the agricultural producer. Now, as Chairman of the House Agriculture Committee, I look forward to meeting the challenge of rewriting a new Farm Bill—one that adequately addresses the needs of farmers, with minimal government interference.

Farmers are facing a fourth straight year of record low prices and increased input costs that require immediate and long-term attention. This farm recession ranks among the deepest in our nation's history. Net cash income over the last three years fell in real dollars to its lowest point since the Great Depression. Crop prices for the year 2000 were at a 27-year low for soybeans, a 25-year low for cotton, a 14-year low for wheat and corn, and an 8-year low for rice.

When the 1996 Farm Bill passed—with fixed, but declining contract payments—neither side of the political aisle predicted today's high costs and low commodity prices. I had major concerns about Freedom to Farm, because of the decoupling of program benefits with commodity prices. But, in the first two years of the 1996 Farm Bill, we saw record high returns for producers and higher government payments. That tide turned. In recent years, producers have borne the financial consequences of rising fuel costs, a strong dollar, global crop surpluses, and continued trade barriers.

When farmers are unsure about income, bankers are not sure about lending. That uncertainty ultimately affects local retailers, suppliers, and equipment dealers. Predictable farm income support programs provide farmers with the ability to make sound, long-term financial decisions. This spring, President Bush committed an additional $79 billion over 10 years—nearly doubling the federal commitment to agriculture.

To meet producers' long-term needs for a predictable farm policy, I plan on presenting a new farm bill to Congress by this August. House Agriculture Committee members have sat down with producers in rural communities across the country, and focused commodity groups on specific plans to pass a new farm bill this year. We have the long-term budget commitment to build a strong counter-cyclical support measure into the next farm bill and maintain planting flexibility for producers.

On the other hand, our immediate problems remain. For the 2001 crop year, diesel prices will average $1.50 a gallon—up 50 percent from last year—while rising natural gas prices have fueled sharply increased costs for irrigation and nitrogen fertilizer. World markets awash in three years of bumper crops mean a large availability of supplies in countries whose own currencies offer customers more buying power against the strong U.S. dollar. Despite some progress in lowering trade barriers, U.S. farm products arriving in foreign markets are slapped with an average 62 percent tariff.

To meet these immediate needs, I am working to make sure that Congress will provide ample 2001 crop year assistance. I believe that the need for a complete Market Loss Assistance Program is there, and I strongly support providing an amount of money similar to what was provided last year.

If Congress had not provided more than $25 billion in additional backing during the last three years, tens of thousands of farmers would have been forced out of business, devastating rural America and throwing our local economy into a nosedive. With a new farm bill in place for the 2002 crop, farmers will no longer be forced to bank on a hope that Congress will provide additional assistance — they will have a permanent farm program in place.

Farmers' needs are clear. Our plan is for action now, and I will continue to fight to deliver what our local producers need.