I note, for example, that the President of the United States, in his speech to the Nation on agriculture on Saturday, indicated that
there are a number of things at stake here. I quote the President:

I am committed to working with Congress to provide the resources to help our farmers and ranchers by dealing with today's crisis
and by fixing the farm bill for the future. But we must do so in a way that maintains the fiscal discipline that has created our
prosperity that now makes it possible for us to save Social Security, strengthen and modernize Medicare with a prescription drug
benefit and to pay off our national debt guaranteeing our long-term financial prosperity. These things are good for America's
farming and ranching families, too, and they're good for all Americans.

I quote the President because the administration has been asked a number of times for an opinion on what type of emergency
spending, if any, is appropriate at this point, on August 2, for a harvest that, by and large, is not yet in and with conditions that must,
of necessity, be unknown. The administration has been reticent to address this situation with any figure, in large part because the
administration and, for that matter, many people in this Senate have been arguing over how the surplus we believe will come after September 30 should be spent or thesurplus for future years. There have been a number of strong contending ideas which include the rescue of Medicare and Social Security reform, tax reduction, prescription drugs for those in Medicare who do not have that, and the various other things the President has cited.

I make this point because usually on this floor we are into that kind of debate about our future and about how to use our resources.
But from time to time, we have a debate on agriculture, and everything else is suspended. It is as if the money we are talking about
today, the $10.8 billion, for example, that Senator Harkin addressed, does not pertain to any of the above--tax reduction, Medicare,
Social Security, the surplus, and what have you. It is deemed emergency spending, outside the budget, outside the budget caps,
outside of our general consideration.

If we are to do emergency spending of that amount or any amount, there must be some requirements to show the criteria for what
is required. That is what I want to review with the Senate this evening.

I suggest the Department of Agriculture, in its most recent summary of where agriculture stands, points out that with low
commodity prices in 1999, the year we are in, net farm income will be $43.8 billion. They point out that will fall below the revised
estimate of $44.1 billion for 1998, last year. That means the estimate for this year is $300 million, or less than a 1 percent change,
from the net income in 1998.

I make that point because, as I have listened to the debate, Senators appear to be describing a loss that is substantially greater than
that, but USDA in estimates made just last week, plugging in the low prices and plugging in also sometimes low inputs--that is, for
feed costs and various other things agriculture people will need--have come to a conclusion the net change is only the difference
between $44.1 billion and $43.8 billion.

Beyond that, the average net income of the last 5 years has been $46.7 billion, which means this year's figure, if it comes out this
way, is $2.9 billion less than the 5-year average. The average for the 8-year period covering 1990 through 1997 is $45.7 billion, so
this year's result is 1.9 less than the 8-year average, or approximately 4 percent.

I am not making a claim it is higher; I am saying it is going to be lower. It is going to be lower by $300 million as opposed to last
year and at least $2 billion to $3 billion less than the 5-year and 8-year averages.

As I have been listening to the debate and Senators have described this as a depression, a circumstance, Senators must take a look
at the parameters of what is the actual set of facts. Let me point out historically the high water mark for agricultural income in the
last 10 years was $54.9 billion in 1996. That followed the low year in 1995 of $37.2 billion. Low of 37, high of 54.9. Average: 45,
46 for the 5-year/10-year situations. This year: 43.8, close to 44 billion.

That is the range. This is net income, not net loss. Agriculture had a substantial net income never below $37 billion and never
higher than $54.9 billion in this 10-year period of time.

We are taking a look at a situation that shows loss, but we ought to quantify that loss. These are the official USDA projections as
of last week.

Senators will recall that 1998's net farm income of $44 billion included $12.2 billion of direct Federal Government payments. About
$9 billion was provided by the farm bill and the remaining $3 billion was made available by the October 1998 emergency
appropriations bill. But this year, already, before this legislation comes to the floor, Federal payments are projected to be $16.6
billion.

Let me point out how this can be true. The safety net provided by the current farm bill--that safety net--provides for an annual
transition payment, a so-called AMTA payment, of $5.1 billion. That is provided for by the farm bill, and to be paid to all farmers
according to formula at the times that are prescribed. But loan deficiency payments for corn, wheat, soybean, and other crops
eligible for marketing loans are estimated at $6.6 billion. This is a safety net provided by the current farm bill.

It has been suggested a number of times that the current farm bill, in its emphasis upon market economics, has no safety net. But I
am pointing out $5.1 billion in AMTA payments and another $6.6 billion in so-called loan deficiency payments, still another $4.8
billion to be paid out in conservation and crop loss disaster payments, with $2 billion of that authorized by the 1998 October
emergency appropriations bill.

It is important to note that most of the farm debate has focused on low prices, and charts have been given to the Senate indicating
how prices have tended downward over the years. But, nevertheless, the more important figure would be price times yield; that is,
the income that comes from an acre.

If, in fact, the price is low but the yield is high, the product of the two may still be a reasonable return for that acre in that year.
There is an even more important fact that I suspect that many Senators have not thought through clearly. An article that I saw on
the front page of USA Today talked about a farm meeting the distinguished occupant of the Chair attended in Illinois. That
particular article mentioned low prices and pointed out the depression and the fall of those prices.

But if the price of corn--as has been sometimes suggested--has been quoted at elevators at $1.75 or $1.70 per bushel, the good
news is that a farmer will receive, at least if he is a farmer in the central part of Indiana, $1.95. That is price guaranteed through
the loan deficiency payment in that part of the state.

How does this work? Let's say the farmer brings the corn in and the market price is $1.70 per bushel at the time of harvest. At the
Beach Grove elevator in Indianapolis, that farmer will receive what amounts to 25 cents a bushel more, bringing that $1.70 up to
$1.95. The same is true for soybeans at Beach Grove, IN. The soybean loan rate will be $5.40. In some parts of the country it may
be $5.26, I am advised, but it is not $4 or $4.50 or $4.60 or $3.75 or various figures that have been quoted.

This is a tough concept to try to get across because even after you make the point again and again, people talk about a $3.75
market price for soybeans. What I am saying is that every bushel of soybeans the farmer brings into the elevator, he is going to get
$5.26 to $5.40 because the government's loan deficiency payment will provide him with a payment equal to the difference between
his market price and the local county loan rate. That is very different.

This is not a question about how low the prices are going to go. If they go lower, the loan deficiency payment is higher. That is
why the Federal Government will be paying out at least $6.6 billion to make up the difference. It was the same for wheat. In many
parts of the country, the wheat harvest has already come in. But the government guarantees at least $2.58 for wheat at many
elevators around the country.

I make that point because that is the safety net of the current farm bill. It is a pretty strong safety net. It will provide a very
substantial amount of income as the harvests occur, as the grain comes in, as the loan rates are established. It will amount to $6.6
billion that has not yet been received but will be received by farmers. Hopefully, that will take the debate away from a comparison
of how low the prices are going to go to the concrete figure of what the loan deficiency payment will be--specifically, as I say,
again, in most parts of the country, at least $1.89 for every bushel of corn, $2.58 for every bushel of wheat, and $5.26 for every
bushel of soybeans. At many elevators it will be a higher figure than that, including the one in Indianapolis that I cited. Farmers
receive that even if the quoted market price is much lower.

Let me mention some other statistics the USDA has pointed out that may give you some idea about the parameters of our
discussion.

In the same report last week of USDA giving estimates on net income, USDA also went into the question of farm assets and farm
debt and farm equity. If you had heard the entirety of the debate today--or maybe for some time--on this issue, the Chair might
logically believe that land values in this country are going down if they pertain to agriculture; that the net worth of farmers
collectively in this country is going way down. That, in fact, is not the case.

The Agriculture Department points out that farm equity, which was $825 billion in 1996, rose to $857 billion in 1997. It is estimated
to go up to $865 billion this year. That is an increase of approximately $9 billion more, or a 1-percent increase in net worth. The
farm real estate figures are $802 billion for this year as opposed to $794 billion last year, and $783 billion the year before, and $746
billion the year before that.

It does not mean every acre of land in every county all over America is going up. As a matter of fact, the Federal Reserve Board
statistics for my home State of Indiana indicate an estimate that in the first quarter of 1999, real estate values in agriculture may
have gone down by 2 percent. As a matter of fact, that was true of a number of States. But in a fair number of States, obviously,
the estimate is that agricultural land is going up. The aggregate, the total, for America is the land values are higher. Furthermore,
the net worth is higher because farm debt will decrease from $172 billion to $171 billion.

Once again, listening to the debate you would say, how can that be? If we are in a depression circumstance, how can you be
arguing that real estate on farms is going up, that net worth is going up, that debt is coming down? Because that is what is
occurring. You can give any number of statistics about prices falling, but the fact is that net income is going to fall by $300 million.
And that will still be within $2 to $3 billion of a range for the last 5 or 10 years of time.

Let me try to bring clarity to the argument in still another way.

The distinguished Senator from Iowa, Mr. Harkin, has mentioned, in a fact sheet that he released and he gave some of these
figures again today, that there will be a 29-percent drop in agricultural income, but Senator Harkin correctly says this is a drop in
principal field crops, not all of agriculture, but principal field crops.

I have noted that situation on my own farm. The distinguished Senator from Iowa, Mr. Grassley, is on the floor. He has a family
farm and could cite statistics from his farm if he were inclined to do so.

On my farm, Lugar farm in Marion County, IN, our net income in 1998 was 18 percent less than in 1997. That was true principally
because our major income sources were soybeans and corn. My guess is that our net income in 1999 may have a similar reduction,
although I hope not so great as the 18-percent that was suffered the earlier year.
 

Obviously, it makes a very great deal of difference, when you come to the net income situation or the difficulty of a farmer,
whether the farmer has debt. Our situation is one in which we do not have debt. We are able to finance our operating loans, our
operating expenses, without loans and out of retained capital. So that gives you a big headstart. For those farmers who have
extended themselves to buy the adjacent farm or have never quite paid off the family mortgage and who must borrow each year to
put a crop in the field, the interest costs are very substantial. Those are reflected still in the overall aggregate statistics of net farm
income in this country.

As you take a look at ag statistics, the fourth that do the best as opposed to the fourth that do not do as well, very frequently the
same amount of land is involved, same weather was involved. The question of debt intrudes and makes a big difference in the
bottom line figure; likewise, the sophistication of the marketing plan. Even in the midst of the crisis we were talking about last
week, I was able to make a sale of 1,000 bushels of corn to an elevator in Indianapolis at a figure higher than the loan rate, the
government's guaranteed minimum price. That prospect was available to each farmer in America, I suspect, that day. We sold that
corn for $1.97 for fall delivery. That is not a high price, but that is corn that will not be receiving a loan deficiency payment, corn
sold in a market which is still out there. In weather-driven spurts, farmers have been able to market corn and soybeans even under
these dire circumstances.

I make that point because those who made sales forward contracts last February and March were able to sell their corn and their
soybeans at prices that were substantially higher. Many farmers do these sales; some farmers do not. We are attempting to deal
with a situation of a total aggregate, those that did very well and those that did not do so well.

Finally, it seems to me it comes to a basic decision the Senate must make. That is, should the Senate say that agriculture, farmers
in America, ought to be made whole, at least to the extent their income is raised to, say, the average level of the last 5 years or the
average level of the last 10 years? Is it the goal of the Senate to say no, that is not good enough? What we ought to do is make
certain that 1999 is one of the best years agriculture has ever had.

The proposals before us today will not boost the $44 billion more or less of net farm income to $54.9, although they come very
close. If the Democratic amendment was adopted and, literally, you added $10.8 billion to the estimate of 43.8, you come up to
54.6, which is just 300 million short of the all-time record for net farm income. In short, not a rescue operation but an idea, I
suspect, that this is a good time to, if not set a new record, at least come very close to that through additional Government
payments. That may not be the intent of the Senate.

My guess is most Senators understand that farm income is down

and they would like to make farmers whole, at somewhere around an average level, which would appear to mean a payment of $2
or $3 billion. Neither of the proposals before us is of that nature.

I have pointed out in colloquies with the press during the past week that there is before the Agriculture Committee now a risk
management bill that would, in fact, provide about $2 billion a year for each of the next 3 years if passed, and that would pretty
well fill the gap, if that was the intent of the Senate to do that.

I conclude that Senators finally will take a look at this entire situation and reach some overall judgments. Let me offer at least
some reasons why some payments might be justified.

First of all, farmers or the rest of America could not have anticipated the Asian crisis that hit about 2 years ago. The last year, in
1998, probably took away 40 percent of the demand of Asian countries for American agricultural products. That probably took
away 10 percent of our entire market last year, which means that demand fell overnight by 10 percent, whereas supplies for the
last 3 years have not only been ample but around the world the weather has been mighty good and the amount of supply abundant,
really throughout that period of time. So a 40-percent hit in terms of the Asian export demand hit very hard. It hit suddenly. Within
a 90-day period of time we realized that difficulty.

Let me also mention, in addition to the Asian situation and the oversupply situation, the abnormally good weather in China, in
Europe, in Brazil, in Argentina, Australia, major sources of food throughout the world, that the American farmers have run up
against the problem of genetically modified organisms in European debate, which means that Europeans are rejecting corn and
soybeans that come with the roundup ready genetic changes.

As we all know in America agriculture, in order to get rid of the weeds in the field, it is a much simpler process. It strengthens,
certainly, the soybean and corn plants, if a gene is changed in the corn or soybean plants that rejects the herbicides that kills all the
weeds but leaves the corn and the soybeans standing. We believe that not only is corn and soybeans from such situations safe, but
as a matter of fact, our yields have increased. The health of the plants has increased, and we felt all over the world people might
want to benefit from these breakthroughs. Not so in Europe, and a debate rages as to whether there is something fundamentally
wrong with our genetically modified seeds to the point we are finding it very difficult to export a single bushel of corn or beans to
the European market. That debate is going to go on for awhile, and it has not been helpful.

We are on the threshold of a World Trade Organization meeting in Seattle that comes up in October. We must have fast track
authority. That is, the President must be able to negotiate on behalf of the administration with other countries, knowing this body
will vote up or down on the treaty without amendment, because amendments by all of us attempting to influence the situation to
benefit our particular States or crops or so forth could be matched by amendments all over the world and the treaty negotiations
collapse.

We don't have fast track authority. We have tried in this body several times to obtain that. The House of Representatives had
similar difficulties. It will require enormous leadership by the President and by many of us, but we cannot make a new treaty that
knocks down trade barriers, that increases our exports in the way that all Senators want, without doing the basic steps. Fast track
authority is one of them, as well as a determined will that agriculture will not be left off the wagon, that agriculture is an integral
part of what our Nation must do at the WTO meetings.

I make this point because we talk, often glibly, about the need for exports. Of course, we have a need for exports. But they will not
happen in the quantities that we need to have happen without lowering tariff and nontariff barriers, and the Seattle meeting is
where that does or does not get done. If we don't have fast-track authority, it will not occur during this administration. That is a
long time.

So for all these reasons, farmers have taken a direct hit, largely because of worldwide demand and in the case of many fields in
the State of Illinois, or in my State of Indiana, or the State of Iowa, as much as a third to a half of all our acreage literally results in
yields that must be exported, or we have it coming up around our ears. We know that and yet, as a Nation, we have not moved
aggressively to make the difference that has to occur.

So for all these reasons, the Senate might come to a conclusion that some compensation is required for farmers in order to keep
their cash flow going. I made the point earlier that, as a matter of fact, loans will be reduced this year. But cash flow will be
reduced, also. And for those farmers who have the need for operating loans, who are genuinely in danger because of debt
situations, the situation could be dire and family farms could be lost.

In the event that we are to make payments, the so-called AMTA payments, put money into the hands of farmers quickly, directly,
and certainly--we had a pretty good demonstration of that last year. The Senate, in its wisdom, at the very end of the session as the
large appropriation compromise came together, appropriated as part of a package about $6 billion for American agriculture. It
came as a surprise to many, but the form of it came as a surprise that was even more difficult. About $3 billion of it came in
AMTA payments. Those were made immediately. They were received by farmers in the first week of November, after passage
late in October of the appropriation bill.

I make that point because if we are serious about money actually arriving in the hands of farmers, then we must be serious about
the distribution method. The AMTA method gets the money to farmers. It does increase cash flow. It is seen as equitable. The
ratios were long ago worked out on the basis of crop history and the signatures for the farm bill. The other half of the $6 billion
was for so-called disaster payments. They were ill-defined then, as they are ill-defined now in the legislation in front of us.

The USDA struggled and, as a matter of fact, finally made payments in June of this year--not in November or October of last
year--and it did so after exploring not only disasters of 1998 in some States, but '97, '96, '95 and '94--multiple years, all mopped up
with some type of distribution and equity found among all sorts of contending parties in various States and counties.

Mr. President, money is not going to get to farmers very fast in distribution methods that suggest that type of procedure, however
humane the motivation may be. As a matter of fact, payments aren't going to go to any farmer very soon from this legislation
because the House of Representatives is not prepared to act upon this. So, therefore, whatever we are doing with urgency now is
going to be a matter for September, or if the appropriation bills do not pass for October or November, or whenever a grand
compromise occurs.

I make that point because farmers listening to this debate might feel there is some possibility as of tomorrow or the next day a vote
by the Senate could lead to money coming to them. But it will not come to them very soon, whatever our result may be on the
floor. Therefore, last week, I suggested that we have 3 days of hearings before the Senate Agriculture Committee, in which on the
first day the Secretary of Agriculture would come before the committee and, hopefully, respond to our questions as to what the
administration's recommendations are, given all that the President

and the Secretary have said about the overall budget condition, about taxes, about Medicare, about Social Security, and given the
administration's view of what is appropriate farm or agricultural legislation.

And if you follow this with other groups in our society who would respond to Senator's questions about this, the committee will hold
a markup in the first week of September so that the Appropriations Committee that must now struggle with this legislation would
have a fairly clear roadmap of what the compromises were and what considerations have been given.

Furthermore, the September debate would give us a pretty good idea of what the yields actually are going to be for a number of
our major crops. I suspect that, even as we speak, as people now begin to talk about a different problem in agriculture--namely,
drought--a whole slew of new considerations are going to come into the picture. The price might go up and the yield might go
down. Once again, the product of the two is the critical element, rather than the new per acre.

Mr. President, obviously, we are in this debate because the occupant of the chair and, more particularly, the distinguished floor
leader has indicated that we need to get on with this. I accept that fact. We will have tomorrow morning in the Agriculture
Committee at 9 o'clock an appearance by the Secretary of Agriculture. We will ask him for his testimony and we will ask him for
the administration's point of view, which I think is relevant to what we are discussing here.

I know it is relevant on the basis of last year's experience because we passed an agriculture appropriation bill, and it had
considerable benefits for farmers. But it was vetoed by the President. And, as a result, the benefits did not accrue very rapidly, and
we got into what I would say was a bidding war again. That is not advisable if it can be avoided in some normal framework. So I
am hopeful that we will have a hearing, and at least that it will provide some benefit for the debate we are now having before us,
and certainly for the debate we shall have again. We will have it again because the Appropriations Committees will have to come
back with conference reports, and we will have to judge the adequacy or inadequacy of what we have done at that point.

Mr. President, I finally make the point that the previous speakers have stated there is an emergency to be met, an immediate need
for income. But, fundamentally, we must debate the entire farm bill when we come back--not simply a question of adequate
income for farmers, but the fundamental law of the land.

I am prepared for that debate, but I simply say that before Senators get engaged in the debate, it is well to gauge at least the
benefits that come from the current farm bill. There are, to date, $16.6 billion this year, which is just $100 million short of an
all-time record of farm payments. That is a substantial safety net. I make the point that the farm bill recognizes that point and, in
fact, provides fairly amply when that occurs. But it also provides freedom to farm, and that is very important to most farmers in
this country--the ability to determine how to manage their land, how many acres of corn, or beans, or cotton, or rice, or whatever
the farmer wants to plant, or not to plant at all. The AMTA payment comes to a farmer who does not plant at all, because this is a
transition from the date of supply control to a day in which we move into market economics and the farm area more completely.
The thing the world dictates presently is that market economics is the important way to go. Our country testifies to that in almost
every other debate.

I hope we will continue to testify in behalf of that when it comes to American agriculture.

I thank the Chair for this indulgence; likewise for other Senators.

I am hopeful that before action is taken on either of the two amendments, there will be testimony by the Secretary and then very
thorough analysis by each Senator as to what our obligations should be to American agriculture both to encourage and enhance it
and, likewise, that our obligation is to all the taxpayers of the country and the other major objectives that lie before our country.

I thank the Chair.