Opening Statement of Rep. Marcy Kaptur (D-OH)

H.R.2673, The FY 2004 Agriculture Appropriations Bill
(Items of concern to the BAC are highlighted in the text)

   Ms. KAPTUR. Mr. Chairman, I yield myself such time as I may consume.

   Mr. Chairman, at a time of recession, rising unemployment in our country, the currency fluctuations that are affecting our markets internationally and great dependency on the Federal Government by our farm sector for economic survival, this bill fails to meet the needs of today's economy, including in rural America, for a countercyclical boost.

   It has been a great pleasure working with our chairman, the gentleman from Texas (Mr. Bonilla), in trying to do the best with the allocation that we were afforded by the full committee; but it is very important as we proceed today to place on the record not only the condition of rural America but how this country and the government of this country is responding to it.

   The allocation that we received forced our committee to produce a bill that is nearly $1 billion under last year's level, indeed $872 million. This situation exists partly because of the fault of the administration which submitted a request to us that did not provide support in many critical areas. In part, it is the fault of this Republican Congress which adopted a budget resolution that did not recognize the vital role that agriculture plays as a pillar of our economy. In fact, the allocation, as I said, for this bill is well below the administration's request as well as last year's level.

   As a result, the bill underinvests in rural America. Surely in value-added production, where the future lies, it cripples our producers' efforts to earn more from the marketplace and less from support payments that continue to be forked over by the billions. The bill fails to meet the needs of other Americans who depend on agencies in the bill for nutrition, food safety, and other important services.

   Technically the bill provides $17.005 billion for discretionary programs, and that is about a percent below the budget request, but 5 percent below the 2003 level of $17.877 billion, a most astonishing set of cutbacks in America's leading domestic industry that still maintains a trade surplus in global markets. I might mention, if Members think about the total of our entire bill, about $17 billion, we are spending that much in 4 months in Iraq. According to what Secretary Rumsfeld has told Congress, we are spending about $4 billion a month, twice as much as we anticipated, to try to feed hungry people and deal with health clinics and all the related expenditures in keeping our troops well supplied. If we think about what we are asking for in this bill versus what we are spending in other places in the world, we can call into question what has been brought to the floor in this package.

   Now, among the funds and programs that are underfunded or at risk of inadequate support are farm loans, rural development, domestic food programs, international food aid, research, which is so important to the future, the Food & Drug Administration, such as approving medical devices, and a number of mandatory programs, for which funding is blocked. Funding for many new initiatives established in the farm bill to lead American agriculture into the 21st century is, once again, deferred.

   And in some other accounts, it is highly likely that additional funds may be needed when this bill goes to conference, but those funds simply will not be available.

   Let us talk about rural America. It is a part of our country on life support. We have a crisis in the rural parts of America born of concentration inside our market that is supposed to be competitive. As well, we have a crisis of diminishing U.S. exports. Even though our agricultural trade surplus at least helps to try to hold up our trade accounts, nonetheless, over the years we have had fewer agricultural exports and more imports coming into this country. So, agricultural America is beginning to tilt toward the negative in the same way as manufacturing America in terms of our trade accounts. We have a crisis in rural America of ignoring investment in new value-added developments such as bioenergy production in which this bill severely underinvests. The economic crisis in agriculture has social consequences in crime and social instability in the part of America that used to be called the heartland and always regarded as the cherished repository of our most fundamental values of free holding, of family, of faith, of community, and of stewardship.

   The New York Times ran a powerful article in December entitled ``Pastoral Poverty: The Seeds of Decline.'' It detailed the systematic decline of the social fabric across rural America. Here are some of the conditions that were mentioned: the rate of serious crime in predominantly rural States such as Kansas and Oklahoma is 50 percent higher than in places like New York State where we have some of the largest metropolitan areas in the country; bank robberies are most likely in towns of 10,000 to 25,000 people. The article went on to talk about people in rural areas making much less than their urban counterparts and much more likely to have only minimum-wage jobs.

   There were 300 times more seizures of methamphetamine labs in Iowa in 1999 than in New York and New Jersey combined, based on Drug Enforcement Administration figures.

   So if everything is so great, why is the social fabric disintegrating? The economic factors that lead to this social disintegration are very clear, and they have been accelerating for a number of years. This bill will only help exacerbate them because today it is no secret that all that is holding up rural America is Federal subsidy. Fifty cents of every farm dollar today is earned from the mailbox when the farmer goes out to get his subsidy check, not from the market.

   This bill could really do something to turn that around. It fails to do that.

   More farmers and ranchers are depending on off-farm income to supplement an economy that is not working for them. USDA's economists recently reported that more than half of all farm operators have off-farm income, and when other household members are added in the off-farm income level jumps to 85 percent. So farming is becoming more of a hobby-oriented activity out there because you cannot earn your income unless you have inherited an enormous amount from past generations and even then you are trying to hold up your current debt level. The market is not providing real income without the Federal subsidy.

   The stresses of rural life were also illustrated in a story last year about an Iowa program to provide mental health counseling to struggling farmers and their families. Surely this economic stress has an impact on people's ability to weather this economy over a number of years. But the funding so essential to help farmers make it in the market, in the competitive marketplace, is severely undermined in this bill. This is true with farm loan programs. Which help farmers to buy a farm or operate a farm; with rural development programs, which help both individuals and communities with homeownership, so essential to helping move our economy out of recession; water and sewer needs, which are hard investments that lead to growth; telecommunications and other vital services so necessary to help rural America jump-start into the private economy. All of these needed programs are either cut or fail to be funded in this bill. The bill falls far short of the true need.

   Let us go through them. Farm loans. Overall, the bill cuts farm loans by 5 percent below the request, providing $173 million less in loans. For three critical programs, farm ownership guaranteed loans, farm operating direct loans, and farm operating subsidized guaranteed loans, the bill provides about a half a billion dollars less in loans than last year. That is a 20 percent cut. That is a cut in investment for our future.

   Many other programs are cut. The business and industry guaranteed loan program is cut by 38 percent. This is where the new jobs will come from in rural America. Yet, in a time of recession, the administration and their congressional allies are cutting that by over a third.

   Single family guaranteed home loans are 4 percent below the 2003 request. And think about that. That is $120 million less to offer borrowers at a time when the housing industry is the only industry that is out there that is holding this economy up as it hemorrhages jobs in other sectors.

   The bill eliminates funding for the Rural Telephone Bank, which made $175 million of loans last year in 23 States. And we know that the utilities and the communications infrastructure of rural America is not at the same level as in our metropolitan areas. I think that is a very backward-looking cut.

   What about water and wastewater disposal grants, one of the core programs of rural development? Every single State in this Union has people, lots of people, backed up to try to get approval for these programs. The bill does provide more funding than the administration's request, but it is $43 million below what was spent last year and almost $250 million below the level that numerous Members of Congress asked of this committee to meet the realistic needs of rural development.

   Grants for distance learning and telemedicine and broadband are $24 million below this year's level.

   I do not have to tell anybody out there about the shortage of physicians and medical information in rural America compared to urban and suburban America.

   Funding for electric loan programs is nearly $1 billion below this year, a 20 percent reduction. How does that really help development across rural America?

   Let us now look at our domestic and international programs. They are underfunded. During this year, Democrats focused on the record demand for domestic food, such as women, infants and children's coupons and food stamps. Noting enormous lines at soup kitchens and food pantries this winter, we fought very hard for temporary emergency assistance for food, and for these food banks across America. The bill does not respond adequately to these concerns, that is for sure.

   Now, with the major rebuilding efforts that America is going to have to make in Iraq and Afghanistan, food will be critical to stabilizing the situation there; and we know that this bill falls far short of what is needed long-term. It simply cannot hold. We cannot meet these commitments without increasing the funding levels in these programs.

   Let us now look at our domestic food programs. I mentioned the Temporary Emergency Food Assistance Program. It is $10 million below the new authorized level in the farm bill. All you have to do is go out to the food banks in your region to see what the need really is and hear the concerns that have been expressed by food bank directors and by human service directors and church leaders across this country. Funding for the Women, Infants and Children's Program is reduced below the administration request. The Commodity Supplemental Food Program is almost $20 million below this year. These are all programs that help keep people whole in bad economic times.

   Neither the administration request nor the bill that is before us today adequately provides funding for the Senior Farmers Market Nutrition Program, despite the fact that applications in recent years have far outpaced available funds.

   The Food and Drug Administration in this bill receives nearly $11 million less than what was requested. What does that mean? It means that we will not have full funding to implement the generic drug program, the Best Pharmaceuticals for Children Act, the over-the-counter drug program and the patient safety and adverse event reporting initiative. The bill will also halt work on the Arkansas regional lab and reduce funding for ongoing maintenance at Food and Drug Administration facilities by 25 percent.

   An area of interest to many Members is medical device funding. The administration made an agreement in 2002 with the medical device industry and authorizing committees here for new industry user fees in exchange for a set level of discretionary funding each year for the program. Under the statute, if total discretionary funds fall short of the required level over a several-year period, the program sunsets. But despite the fact that it was a party to this agreement, the administration completely failed to live up to its part of the deal last year and this year and did not request the required funds. At least 46 Members of both parties requested that the full amount for devices be provided.  

This bill provides an increase of $9 million over the request for the medical device program, but this is still short of the required level in order to really make the approval program work.

   I wanted to say a word about mandatory programs because the bill includes 10 provisions cutting mandatory agricultural programs by $540 million. These are programs that provide support for rural firefighters; dam rehabilitation; renewable energy, and what could be more important to our country than that when we hemorrhage in terms of our ability to balance our trade accounts because of imported petroleum; conservation, which was a promise made in the recent farm bill; telecommunications and research. These cuts in those mandatory programs will have a real impact across rural America.

   The Small Watershed Rehabilitation Program is cut by $95 million, more than twice the cut in this year's bill, despite a rapidly growing number of dams reaching the end of their useful lives across our country. Two years ago, the Natural Resource and Conservation Service had identified 1,450 dams in need of rehabilitation at a cost of about a half a billion dollars, $500 million. We have already spent that much money in the first half of July in Iraq, but we are not willing to spend that money here at home for infrastructure improvements.

   While the bill does provide an increase of $20 million in discretionary funding, the cut in mandatory funding makes it much harder to meet identified needs. It is estimated there is a backlog of over $80 million just to finish projects currently under way, so funding on both the discretion and the mandatory sides are needed.

   The bill eliminates the funding for rural firefighters. The bill eliminates all funding for the conservation security program. And in the Wetlands Reserve Program, so essential to assuring a healthy

   ecosystem, the bill cuts new enrollment in the program by a fifth, by 20 percent, which means that we will have so many fewer people who will be able to participate in a program that has a backlog of 736,000 acres.

   In the EQIP Program, the bill reduces funding by $25 million; and that means that there will be 1,450 producers who will not be able to get EQIP funding this year.

   In renewable energy, I think the bill is terribly ill-advised in zeroing out funding in a sector where America must restore her independence.

   And in value-added grants, which the farm bill asked for, this bill zeros out support for the new jobs of the future that could be created across rural America.

   In broadband loans for telecommunications, the bill eliminates all funding for this authorized program.

   And for the initiative for future agriculture and food systems, the bill cuts $120 million from this competitive grant program which is designed to do research in critical areas such as genomics, food safety, food technology, human nutrition, new and alternative uses and production of agricultural commodities and products, agricultural biotechnology, where so much of our future lies and the world's future, natural resource management, including precision agriculture, and farm efficiency and profitability.

   Other shortcomings in the bill I will quickly mention. Country-of-origin labeling. The bill prevents the implementation of origin labels for meat and meat products. This is a basic consumer right-to-know issue which the House unanimously supported when it instructed its conferees on the farm bill to support country-of-origin labeling for both meat and perishable products.

   In terms of the provisions for meatpacker audits, the administration asked Congress for $1 million for the Grain Inspection, Packers and Stockyards Administration to audit the four largest steer and heifer meatpackers for compliance with that act. This might sound routine, but it is not. This would be the first time in the 82-year history of the Packers and Stockyards Act that the agency has required a large packer audit, but the bill conveniently does not provide the funding. Gosh, I wonder why.

   And then in the food safety and inspection provisions, the bill provides about $12 million less than requested for the Food Safety and Inspection Service.

   In terms of research, and this is really the seed corn for the future, the bill provides only half of the funding for the upgrading of security at our agricultural research labs.

   In addition to that, the Cooperative Research Education and Extension Service, overall funding is over the request of the administration but $22 million lower than this year's level. As a result, many important research institutions and activities, including our 1890 and 1994 institutions, are shortchanged. In addition, at least 95 Members of this House of both parties asked for a 5 percent increase in these research formula funds, but the bill does not provide this.

   Many Members also asked for $200 million for funding the national research initiative, but the bill provides only $149 million.

   The Economic Research Service and National Agricultural Statistics Service would receive almost $12 million less than requested, forcing the postponement of important initiatives such as genomics research and improvement of statistical information in our New England States, Hawaii and Alaska.

   In concluding these opening remarks, I would just like to summarize by saying that budgets reveal priorities. This year we are seeing that the Republican Party in this House is willing to put huge tax breaks for the most well-off in our society and also military action around the world ahead of almost every other economic and social value in our country. Rural America needs to have market-oriented incentives, not dole for farmers from coast to coast. This bill is an important answer to the situation confronting our Nation in one of the most vital sectors of our economy, and we should not shortchange the future by the underinvestment that this bill represents.

   Mr. Chairman, I reserve the balance of my time.