The House Agriculture Committee Wednesday heard from national farm organizations on the problems facing farmers and the need for congressional action. The hearing one of several sessions the panel has conducted this year in preparation for writing new farm program legislation.

"I have stated at the beginning of each of the field hearings, and I think it is important to note that every member (of Congress) here knows there are significant problems facing the agricultural sector," said committee Chairman Larry Combest (R-TX). "We all fundamentally believe that it is in the best interest of this nation to maintain and foster a diverse and strong agricultural sector for the future. And so, the question we want to answer is, ‘How best do we accomplish that goal?’"

Ranking Democratic Rep. Charles Stenholm (TX) said, "Those of us who represent rural, agricultural districts understand that what Congress does in the next two years will affect the livelihood of farmers, ranchers, and the small town banks and businesses, health care facilities, schools and churches that are so essential to the quality of life in rural America. In terms of future agriculture policy, we must work toward the development of a comprehensive program that recognizes the importance of agriculture to our national security and that enables families to make a living in rural America."

Bob Stallman, president of the American Farm Bureau Federation, reiterated the AFBF’s support of the 1996 farm law, saying it has continued to work "as designed with respect to producers’ ability to reallocate their resources in a more efficient manner and to adjust crop acreage in response to both economic and agronomic factors."

He said AFBF favors "additional low income and weather-related financial assistance this year" along with "movement" toward a counter-cyclical plan to replace the almost annual ad hoc assistance Congress has appropriated. A counter-cyclical plan would pay farmers when crop prices are below a certain threshold.

Stallman called for a continuation of the planting flexibility under the 1996 law, continued trade expansion and "continued evolution" of risk management programs. The $8 billion over five years for crop insurance reforms will make that program "more affordable and cost effective," he said.

However, he said more work and research should be done to protect farm revenue and income and cited the adjusted gross revenue pilot program as one option. Farmers in states where pilot program are in force "speak favorably about such risk management programs due to the ability toi protect portions of their income (cash flow), the year-round availability of insurance protection and the flexibility of planting decisions within the program."

Leland Swenson, president of the National Farmers Union, told the committee that farm policy should "provide an adequate supply of safe, affordable and high quality food and fiber products through a competitive production, processing and marketing system that generates adequate economic returns commensurate with each participant’s contribution to the system."

Swenson said proponents of the 1996 farm law, nicknamed Freedom to Farm, promised that: 1) world population and income growth would create new export demand for U.S. farm commodities; 2) improved risk management programs, such as crop insurance, could replace other economic safety net programs; 3) reduced government regulation would increase production efficiency by lowering operating costs; 4) a combination of marketing loans set at levels well below the cost of production and fixed, de-coupled producer payments would ensure adequate farm income levels to allow the transition to a market-oriented agriculture system, and 5) reductions in our own production-based producer safety net would force others, primarily our export competitors, to make market-dictated production adjustments.

"Historically, as well as in the context of our most recent experience, none of these assumptions have merit, and there is little to suggest the future will provide new evidence, beyond simple rhetoric, of their validity," he added.

George Naylor. A farmer from Churdan, Ia, and a member of the Iowa Citizens for Community Improvement (Iowa CCI), represented the National Family Farm Coalition (NFFC) in his testimony. The NFFC believes "Congress must legislate a system that supports a future for family farms and assures that the nation’s food is produced on family farms, not factory farms"

"We ask you today to end the madness of the so-called Freedom to Fam Act and support provisions of a new farm bill," he added. Some believe "it is too late to change the sickening trend toward factory farms and the increasing corporate control of our food supply."

The NFFC wants commodity prices increased, not more government payments, he added. "If farm prices were raised so that the corporations that make record profits from buying these cheap commodities were paying a fair price in the first place, then the $32.3 billion (in farmer assistance) could be spent on many other important national needs."

There must be a price floor established under the basic storable commodities through the use of the nonrecourse loan, he said. "Since many of these commodities are feedstuffs for livestock, they indirectly establish a floor under livestock prices."

A two-tier dairy supply management program should be established for dairy production with the price set more closely to the cost of production, according to Naylor. And "when commodity prices more nearly reflect the true cost of production, we can expect a return of livestock