Dear Mr. Secretary:

We all agree that we need to get the emergency agriculture bill out of conference, passed and get the assistance to our farmers as fast as possible. In this regard, I am concerned with recent comments you have made regarding how these payments should be funded and made available to farmers. Instead of using the current Agriculture Marketing Transition Act (AMTA) payment system that farmers and their lenders were promised and banked on several months ago, you and others within the Administration have recommended alternative payment plans.

In your September 15 testimony before the House Agriculture Committee, you said:"There is an immediate need to provide cash assistance to mitigate low prices, falling incomes, and in some areas, falling land values."

But then you said: "Congress should enact a new program to target assistance to farmers of 1999 crops suffering from low prices. The Administration believes the income assistance must address the shortcomings of the farm bill by providing counter-cyclical assistance. The income assistance should compensate for today's low prices and therefore they should be paid according to this year's actual production of the major field crops, including oilseeds."

Dan, I know the Administration, the Farmer's Union and some Democrats in the Congress want to change the farm bill in the emergency legislation. And, I know some of the budget "wonks" in the Office of Management and Budget are sending mixed signals and I know the politics of the issue. Nevertheless, I urge you to reconsider for the following reasons:

FIRST: The very farmers who need the assistance oppose this plan. The commodity organizations representing producers of soybeans, wheat, corn, cotton, grain sorghum, sunflowers, canola and rice and the American Farm Bureau -- THE VERY FARMERS YOU STRESSED IN YOUR STATEMENT -- strongly disagree with your philosophy and proposal.

In a letter to the Chairman of the Senate Appropriations Committee, Senator Ted Stevens, they said and I quote: "We strongly disagree with that (your) philosophy. The current economic distress is partly a result of the unfulfilled promises of expanded export markets, reduced regulations and tax reform that were part of the promises made during deliberation of the 1996 farm bill. The costs of these unfulfilled promises fall upon those people who were participating in farm programs at that time. "The current AMTA payment process is in place and can deliver payments quickly. The administration costs of developing an alternative method of payments would be very high and eat into funds that should go to farmers. Given the 7 1/2 months it took the Department to issue weather disaster aid last year, we are unwilling to risk that producers might have to wait that long for development and implementation of a new farm program and disaster aid formula.

Time is also critical for suppliers of goods and services to producers. They need payments for supplies now to stay in business, not just promises that something will happen in the future. "Supplemental AMTA payments provide income to producers of corn, wheat, cotton, rice, barley and grain sorghum. Soybean producers will receive separate payments under the Senate language. Crop cash receipts for these producers in 1999 will be down over 20 percent from the 1995-97 yearly average. Producers who have smaller than normal crops due to weather problems will receive normal payment levels.

This is better than using the loan deficiency payment program (LDP's) which are directly tied to this year's production. "We urge you to retain the $5.5 billion in supplemental AMTA payments as the method of distribution for farm economy aid in the agricultural appropriations conference agreement. Any alternative would certainly take additional time to provide assistance to producers -- time which we cannot afford."

SECOND: Changing the payment plan will mean farmers will not receive their payments until next year. The term you used in your statement regarding the emergency payments was "immediate." The difference between using the AMTA payment system and the several alternative methods you have suggested is: Three weeks or three months. Or, this year or next.

Last week, Farm Service Agency official Parks Shackelford said: "All the king's horses and all the kin's men could not get the payments made as quickly as Congress desires."

Dan, last year, the USDA was able to distribute payments though the AMTA system in less than three weeks after passage of the legislation by Congress. Beginning November 3, the date of the election by the way, farmers received their payments before Thanksgiving.

Dan, last year, in delivering disaster assistance, through a formula developed by the Department, it took 7 1/2 months to receive payments. Dan, you are the "King" and you have the horses, just do it!

THIRD: No specific or formal plan has been presented and in terms of actual farming practices, the criticism doesn't add up. Staff on both the authorizing and the appropriations committees tell me no formal plan for an alternative distribution plan has been developed or submitted. What has been developed and submitted, however, is repeated criticism of current policy. However, these comments show either naivete from people who do not understand current legislation or worse, that the USDA is breaking the law.

In recent weeks, USDA and Office of Management and Budget officials have criticized plans to distribute income assistance through the AMTA system. The first complaint was, "Payments go to people who planted no crops."

I respectfully ask are producers who lost their crops due to hail, disease, drought, or flooding in better financial condition that those producers who had crops to harvest in 1999?

Yes, farmers can receive AMTA payments without planting a crop, that is part of the flexibility of the farm bill. But, you and I know they must plant a cover crop for conservation requirements and you and I also know farmers have shifted the crops they plant and that the current price crisis affects all crops. I know of no farmers who have quit planting altogether.

Last Friday, you said these payments are being made on many acres that are no longer planted to crops but rather have been switched over to pasture and grassland. If that is the case, certainly hard hit livestock producers will benefit from AMTA payments. But, more to the point, you, some in the Department and many Democrat members of Congress have urged production and/or acreage controls because farmers have planted "fence row to fence row" under the 1996 farm bill. The dramatic changes in production figures on major crops you cited arguing the Administration's new payment distribution proposal clearly shows the large grain surpluses did not come from U.S. farmers. However, the current AMTA payment plan is, in fact, a paid diversion if the farmer wishes to make that decision.

Those who propose acreage or production controls should embrace AMTA payments in that it affords farmers the opportunity to be paid for shifting to other crops or putting the ground into good conservation practices. They won't, of course, because the controls are not mandatory and did not come out of Washington.

The SECOND complaint was, "Payments are being made to those who share no risk in farm production." (Landlords) Dan, if they are, both the USDA and the recipient are breaking the law. The 1996 farm bill clearly states that payments can only be made to those who "assume part or all of the risk of producing a crop". If payments are indeed being made to those who share no risk in production, it is a clear violation of the law and disciplinary action should be taken for any official approving payments in an illegal manner.

The THIRD complaint was, "The income assistance component must address the shortcomings of the farm bill by providing counter-cyclical assistance." Without going into a detailed description of the Loan Deficiency Payment Program (LDP's), what on earth is the Loan Deficiency Payment if it is not counter-cyclical? As a matter of fact, your own department estimated last week that at least $5.6 billion in Loan Deficiency Payments will be going out to farmers this year because prices are low and the lower prices are, the higher the LDP payments, even to the point of exempting them from payment limitations. How can you get more safety net counter-cyclical than that?

FOURTH: The alternative plans have problems. While no formal alternative plan has been submitted, you have indicated such a plan would base payments off of a state average yield or off of a five year production average that producers would have to prove. On one hand, you are telling farmers their payment will be based on "actual production yields" while on the other you state you intend to use 1999 state averages or five year average yields. We both know, wide discrepancies can occur in yields from one region of a state to another. We do not need Western Kansas versus Eastern Kansas equity arguments or similar arguments within any state or region.

FIFTH: Farmers (and their lenders) will not know the amount of payment not to mention when they will receive it. Any change in the AMTA distribution payments also changes what farmers and their lenders were promised and they banked on several months ago. We should use the current AMTA system where producers and their lenders know exactly what their payments will be.

FINALLY, Dan, as we have discussed, no farm bill is set in stone and none is perfect by any means. That debate is and should be taking place but not on an emergency bill. It has been six months now, since you requested an emergency bill. To date, I still don't know the Administration's budget position or have seen a specific plan. Some within OMB tell the appropriators they want less lost income payments and more disaster and others just the opposite.

Summing up, your proposal:

1. Is opposed by the very farmers who will receive emergency assistance.

2. Will delay the payments until next year.

3. Is based upon comments from those who apparently do not understand the legislation (not to mention farming) or if their comments are true, mean the USDA is breaking the law.

4. Has yet to be formally presented to staff and involves serious distribution and equity problems.

5. Breaks the commitment made to farmers and lenders when the Senate passed the emergency bill months ago.