A cost saving measure for farm programs would be to target programs to reach only the intended beneficiaries. We would prefer a targeting plan that concentrates on supporting the family farm system of agriculture over a plan that calls for supporting a percentage of all farmers production. Secretary Yeutter's preferred way to balance the agricultural budget seems to be to reduce farm income, a dollar for each dollar saved in the budget. We do not believe that raising loan rates alone would cause disaster for the one-quarter of agriculture's cash receipts that come from exports. We believe that low prices are the problem, not the solution. Loan rates should be raised to current market price levels or, at the very least, the Findley provisions should be repealed. The triple-base idea is, in our opinion, "decoupling lite." This concept will drive market prices lower and encourage greater production which, in the long run, will leave only the producer to have the largest bank account at the start of the program. The concept of growing a crop and selling it below the cost of production is not the kind of flexibility that American farmers want. The idea that there are many opportunities in the area of nonprogram crops is a myth. In fact, the profitability of these crops would be shattered in very short order if large numbers of acres are diverted out of the major Farm Program crops. We support crop insurance, but cannot advocate an end to disaster programs until more coverage is available on more crops in more places. For crop insurance to ultimately replace disaster programs, there must be at least one catastrophic coverage option that performs the same function providing for lost income. We advocate a permanent catastrophic loss pool and recommend increasing available coverage by raising yield options and covering production costs. Subsidy levels should be increased or at least made the same across coverage levels. Environmental issues must be addressed in the 1990 farm bill. CRP could be used for land which has a soil type that is too sandy to allow any type chemical use without ground water leaching and for which nonchemical alternatives are not feasible. Since there is plenty of room left with the original 45 million acres, we do not believe that it is necessary to increase, to overhaul or for county average gaps at this time. What makes the cost compliance sodbuster and swampbuster provisions effective? It is the threat of a loss of program benefits. Program benefits are removed by decoupling or another similar mechanism that will virtually guarantee that marginal lands will be kept in production. As I said earlier, we need to simplify the Farm Program, but we do not need to simplify it by eliminating it. We would like to work with the existing programs by, first, simply making payments based on units of production instead of acreage. This would not only allow USDA to predict program costs with a greater degree of certainty, it would allow farmers to farm using crops in field rotations that make sense for their operation. Second, we would like to allow producers a one-time opportunity to improve their yield. Third, farmers should be able to enter into long-term rotations with such crops as alfalfa or legumes without violating sodbuster requirements and without losing base. More research and education is needed on water quality. There is a need for a balance between incentives and penalties, conservation goals and production needs. We need to develop practical low input and nonchemical alternatives for more commodities, not just to protect ground water and low-farm input crops, but to decrease the potential for pesticide residues remaining in our food. We need a farm bill that demonstrates the commitment to sustainability. Farmers Union is equally concerned that the United States is allowing the agricultural export tail to wag the domestic farm policy dog. Export is only 20 to 25 percent of cash farm receipts. Exchange rates, global unemployment rates, weather, and other economic and social factors over which Congress and USDA, our trade negotiators, have no control could easily wipe out the best crop export strategies. Farm programs are primarily domestic policy tools, and we object to their classification as trade-distorting subsidies. USDA's efforts to administer the domestic farm program established in 1985 as tools of foreign policy has caused an economic decline in rural America and has left Congress working to pass rural development legislation in an effort to revive and repopulation our rural areas. Secretary Yeutter suggested that taxpayers may not be willing to continue paying high levels of farm subsidies. He may be right. Particularly as taxpayers realize how much of their money has gone to multinational grain traders, who are already posting record profits to help them regain the market share. While it is true that we have spent more money on farm payments in the last 8 years than in the entire history of farm programs, many of those payments helped farmers to keep paying their creditors during a time when the market value of their crop was being driven down by Government policies. USDA's failure to understand the willingness of our competitors to fight for markets has led to a tremendous escalation of export subsidy costs. International negotiations should begin immediately in two areas. First, we must negotiate with debtor nations and the Third World to reduce their debt in exchange for economic reform that will improve their people's standard of living. Second, for existing markets, international negotiations should take place to achieve long-term agreements on agricultural production and prices; that is, as we at Farmers Union continually talk about, we want fair trade. There are several other areas which ought to be addressed in the 1990 farm bill, if they cannot be resolved this year. Domestic hunger, rural development, agricultural credit, research into industrial uses of agricultural commodities, extension service activities, grain quality standards, and reform of the Packers and Stockyards Act are just a few. Farmers Union looks forward to working with this committee on these as well as the 1990 farm bill. We look forward to working with this distinguished subcommittee and the full committee to develop long-term legislation that is designed to protect our vital agricultural industry. Mr. Chairman, I know that you just returned from the Soviet Union, and I want to take this opportunity in closing just to quote a couple of paragraphs from a recent article that was in the Farm Journal, the August issue of the Farm Journal, and it says, in the headlines: We Destroyed Our Agriculture: An Inside Look at Russian's Rural Meltdown. We destroyed our agriculture, Viktor Lishchenko, a high-ranking Soviet agricultural economist bluntly has told this American reporter. Our farms are disaster areas. The average Soviet cow gives only 40 percent as much milk as the American cow. The Soviet pig eats twice as much as an American pig and takes 50 percent longer to finish. Using a third more combines, Soviet farms harvest half as much grain as we do and waste a good deal of that. Harvesting damage is about 80 percent of potatoes and 50 percent spoil in storage, according to an article that was in Isvestia this last fall. The last few sentences that I want to quote from the article are these: Gorbachev has proposed a new reform program. It calls for more self-managed farm units. And I underline more self-managed farm units. More food processing capacity for letting the worst farms go bankrupt and for shrinking the huge Gosagroprom organization. Those are the things that Gorbachev is talking about doing, but the one thing that I want to point out was that they are calling for more self-managed farm units. So, we in Farmers Union, of course, have always supported the family farm, and we note at the present time that the numbers continue to decline, and since 1981, we have lost 300,000 of our family farmers and ranchers in this country. It seems to us in our organization that we can put together a farm and food policy that will encourage family agriculture in this country, and we hope that when you write the new farm bill, that you are able to do that. Thank you very much. [The prepared statement of Mr. Stencel appears at the conclusion of the hearing.] Mr. GLICKMAN. Thank you, Mr. Stencel. Ms. Jones. STATEMENT OF MARSHA A. JONES, NATIONAL WHEAT CHAIRPERSON, WOMEN INVOLVED IN FARM ECONOMICS Mrs. JONES. Thank you. My name is Marsha Jones, and I am the national wheat commodity chairperson, Women Involved in Farm Economics, WIFE. My husband and I own and operate a ranch in northeastern Colorado. We produce mainly wheat and have a cow-calf operation. I am involved with all aspects of the operation from financial planning to operating equipment. I share the responsibility of making business decisions with my husband. WIFE is a grassroots organization striving to achieve prosperity for agriculture and the Nation through education, communication, legislation, and cooperation. I am pleased to have the opportunity to address the committee today on behalf of WIFE members, and I thank you for traveling to Colorado to hear our testimony. I have a simple request of the committee, and I read in press releases and hear on the news subjects concerning the Food Security Act of 1990 referred to as the farm bill. You and I know the link between food and farm. The majority of the population in this Nation does not understand this. We are the industry you have chosen as the vehicle to secure food for this Nation. If the committee and their staff would wipe the words "farm bill" from their vocabulary and refer to this act as the Food Security Act of 1990, maybe, just maybe, the general population would begin to understand this. If not, they do understand food and would know that this is a food bill, just not a farmers' bill. WIFE endorses the spirit of the current Food Security Act in its objective of maintaining an economical and abundant food supply for the American people while providing an adequate income for producers. We have seen a great reduction in our wheat inventory the past year and an increase in our price. However, along with the increase of our price for wheat came an increase in our cost of production. There does not seem to be a correlation between the price we receive, the cost of production, and the price we pay for local bread in the store. It seems that the American farmer is always trying to catch up. When the price of wheat is down, production costs are high. When the price of wheat is up, production costs are even higher. WIFE supports a continued program to ensure producer stability while developing favorable marketing conditions. With implementation of the Food Security Act of 1985, a percentage decrease of target and loan prices yearly. Target prices have decreased yearly, but not the cost of production. If we continue on with the same act and just do some fine-tuning to the program, the target price must increase the cost of production. WIFE supports maintaining the Export Enhancement Program. We feel this has been a contributing factor to the reduction. of our inventory. Along with the drought conditions of the past year, the inventory is not a contributing factor to decreasing food prices. A consistent and constant normal crop acre is necessary to implement an efficient, fair, and realistic set-aside program. Each farmer should be able to divide his NCA into base acres that best suit his land and farming practices. In order to diversify, a farmer should be able to raise nonprogram crops without losing NCA. Many new terms are being used in developing the Food Security Act of 1990 which may have a wide variety of meanings. Therefore, WIFE supports a concept of the historical relationship between the farm income support programs and agricultural production. WIFE will continue its pursuit of equity, including legislation related to the person status, for eligibility for women of program pay ments. An ASC regulation states a husband and wife will be considered one person. This unfair regulation should be changed in the Food Security Act of 1990 or separate legislation. We wonder why we are denied person status if we are contributing as much to the farm operation as other individuals in a corporation or partnership. When I go to the ASCS office to sign our farms into the program, I must have power of attorney for my husband to do so, but if he happens to be the one signing our farms into the program, he does not have to have my power of attorney. If we are considered one, my signature should be as good as his. We are not asking that every farm woman have a person status. We are asking that if a woman meets the qualifications for a person status, she be given that status. We ask your support and help in correcting this discrimination. We thank Mr. Marlenee for his assistance in developing legislation to correct this problem. On behalf of WIFE and its wheat producing members, I want to thank you for giving us the opportunity to voice our concerns and our views with you. WIFE members are living in rural America and on the farm. We see the problems and experience them day to day. We see that the decisions made at our Nation's Capital affect our day-to-day exist ence. Thank you for traveling to Colorado today to listen to us. [The prepared statement of Mrs. Jones appears at the conclusion of the hearing.] Mr. GLICKMAN. Thank you very much, Mrs. Jones. We appreciate that. Dean Kittel, Colorado Farm Bureau, we are delighted to have you here. STATEMENT OF DEAN R. KITTEL, EXECUTIVE VICE PRESIDENT, Mr. KITTEL. Thank you, Mr. Chairman. My name is Dean Kittel. I am the executive vice president of the Colorado Farm Bureau. It is a pleasure to welcome you to the Colorado State Fair and to have the opportunity of sharing our thoughts with you. We express these ideas on behalf of the 16,400 family members of the Colorado Farm Bureau. Last week at this fair, it was Colorado Farm Bureau's privilege to be a part of an annual ceremony to present plaques to representatives of 26 families whose farms and ranches have remained in the same family for at least 100 years. In talking to these people, the thing that impresses one is the diversity and the ingenuity that are part of these operations with a record of survival in a changing agricultural scene. Today's producers are those who survived by effectively using capital management and labor combined with modern tools for purchasing and marketing. What would these modern day producers like to see in the 1990 farm bill? I will try and list what I per |