The following is the testimony given by Kenneth Macy, Pine Bluffs, Wyo. at the USDA field hearings held recently in Idaho. The hearings are being held around the nation as a means to personally hear from the farmers and ranchers on their ideas for solutions to the farm crisis.
Thank you Chairman and members of the committee for this opportunity to testify.
Let’s start with the price and income policies. Farm commodity prices in relationship to cost of production and the economy that we are in are the lowest they have ever been in my 30 plus years of farming. Farmers like the planting flexibility of the 1996 Farm Bill, but cannot afford the low prices fostered by elimination of the Safety Net. As an income policy the marketing loan programs must be equitable, targeted, counter cyclical and must maximize producer marketing flexibility.
We must have a counter cyclical mechanism to offset longer periods of low prices. Within the context of this Farm Bill, we must begin to manage the supply that is hanging over the market like an anvil. We can provide a means to manage our supply, and to protect the quality of our soil at the same time.
I specifically endorse a flexible multi-year land restoration program. This would be a shorter term program than the traditional CRP. Producers would be allowed to put up to 30 percent of their farm base under a cover crop for a period of one to three years, and receive a higher marketing loan level based on percent put in the program. This provides the benefit of lowering the oversupply of crops and maintains the freedom of flexibility for each operation to best suit its needs. These areas will also provide valuable wildlife habitat and soil improvement. This program would impact consumer prices by no more than 0.3 percent.
Establishing a strategic reserve is another step that can help manage our supply problems. The world is simply not carrying stocks in the traditional manner. The bounty of the past few years have nearly blinded us to the fact that we are ill equipped to weather a period of low commodity production caused by sustained drought or other disaster.
I remind us that in 1995-96 we needed and used up the old reserve to sustain our livestock operations in the United States. If we are going to increase our livestock production we need a strategic plan.
Many producers, of course, are concerned that a Storage program may be used to artificially suppress commodity prices. In order to serve as a true “reserve”‘ and not just a stored surplus; we must have the tools to effectively lock away our commodity reserve. I urge that the farmer-owned reserve storage loan program be offered to producers at zero percent interest and that the program pay for the storage costs.
Producers of livestock must have access to farm support programs as well. A livestock loan deficiency program would provide a valuable safety net for livestock producers.
The “ideal” of a market-oriented farm policy will remain elusive until such time as we create new marketing opportunities for producers. We can talk about the fact that farmers are selling into a world market all we want, but in reality I market to Cargill, ConAgra and to local elevators. Cargill may sell into a world market, but they are sure not sharing the benefits with me. Market concentration is a serious problem for agriculture. The general idea of anti-trust preventing a monopoly in market areas and actual application of anti-trust laws aren’t the same, This is a serious problem. In the livestock concentration area I urge the passage of the Senate Bill (Senators: Thomas, Johnson, Grassley and Kerry) preventing packer ownership of livestock.
Additional funding for new cooperative development is a step toward the goal of increased market opportunities. The Rural Cooperative Development Grant Program should be funded at the full level of $20 Million per year that was authorized in the Farm Bill and supported by the USDA Small Farm Commission.
There is a great need for Congress to address the issue of multi-functionality that American farmers and ranchers provide for American society. Society wants and expects farmers and ranchers to provide many things including wildlife, clean water, open space, soil conservation, adoption to the effects of Endangered Species Act and the good view of a farm or ranch countryside; in addition to the production of agriculture commodities. Funding for agriculture to keep it profitable is the most efficient way to achieve these for society. Funding for this should be separate from regular commodity programs. This funding must be available to all farmers and ranchers and based on things provided by farmers and ranchers.
The work conducted in the Senate this year to reform our risk management program is welcome news for producers. I am concerned, however, that some lawmakers continue to view crop insurance as a replacement for a sound farm policy. It is not. But it is an important part of the overall policy picture. Specifically, we support inverted premium subsidies to enhance the affordability of higher levels of coverage; modifications to the Actual Production History calculation to adjust for multi-year losses, program expansion for under served regions, crops and livestock; greater representation on the FCIC board of directors, market related quality loss adjustment mechanisms, and changes to the prevented planting rules.
Finally, we feel it is important to recognize that a thoughtful, well-financed farm program will ultimately serve the taxpayers better than a flawed farm policy that requires annual emergency injections of cash. That is why we feel it is important for Congress to increase the baseline spending floor allocated to the agricultural programs. If they are designed properly, funded adequately, and administered effectively, they can serve farmers and the public well.
Immediate improvement in the 1996 Farm Bill is one of the critical pieces necessary to reform federal farm policies. Combined with strong anti-trust enforcement and cooperative development, this reform can return profitability to the independent American farm and ranch.
Mr. Chairman, I again appreciate this opportunity to testify before the committee.