DISASTER ASSISTANCE will be an iffy thing for stockmen under current federal law, said U.S. Agriculture Secretary Dan Glickman on a tour of drouth-plagued Texas last week. Glickman and U.S. Rep. Charles Stenholm, left of center, are pictured at a stop north of Colorado City.

Glickman, Stenholm Tour Texas,
Talk About Disaster Assistance

By David Bowser

SNYDER, Texas — The U.S. secretary of agriculture is calling for reform of the nation's farm bill to, among other things, benefit livestock producers.

In his second trip this summer to survey drouth conditions in Texas, Agriculture Secretary Dan Glickman says he expects to have specific proposals to help ranchers and farmers in the short term within a month. Legislative initiatives will be announced after the first of the year.

Glickman says he expects proposals from his staff within 30 days with specific recommendation for what can be done administratively within USDA to make programs more effective.

"It is also my intention within that same period of time to have a series of more significant legislative suggestions that we can include in the President's State of the Union message in January," Glickman said here last week.

"We should not have a single sensible, prudent farmer or rancher go bankrupt because of an act of God or because of what mother nature does."

Touring parts of West Texas with U.S. Congressman Charles Stenholm, ranking Democrat on the House Ag Committee, Glickman said the Lone Star state isn't the only one suffering.

"There are big sections of this country that are suffering from extremely difficult weather conditions," Glickman said.

He said low prices coupled with bad weather have made it tough from Texas to Florida.

"Texas is an extraordinarily important agriculture state," Glickman told listeners. "It is number one in cattle and sheep production, in production of upland cotton, and number three in hay. Unfortunately, in addition to being number one in these and other areas, Texas has been this year number one in disasters, as it was two years ago. If you look over the last 15 or 20 years, it's been picked on by mother nature."

He noted that for corn, cotton and sorghum, more than 50 percent of the crops in Texas are reported in poor condition or very poor condition.

"For range and pasture lands, it's nearly 80 percent," Glickman said.

While cattle and grain prices are down in addition to the weather problems faced by Texas, there are things the USDA can do in the short term and some things they can do with Congress to help producers in the long term.

"The president declared the entire state of Texas a disaster area, making it eligible for low interest farm loans, but I recognize that most farmers don't want more loans," Glickman said. "These loans may help some people, but they are no substitute for higher prices."

He noted that USDA has also approved 98 Texas counties for emergency haying and grazing and extended the deadlines for emergency grazing to Nov. 30.

Glickman said that while he supported parts of the 1996 Freedom to Farm bill, parts of it need reform, particularly with regard to crop insurance and emergency assistance to livestock producers.

"While crop insurance needs a heck of a lot of reform, we expect to pay about a half billion dollars in claims on crop losses in the state of Texas this year," Glickman said. "Right now, that's running at a rate of about $30 million a week to Texas producers."

On top of crop insurance funds, President Clinton has indicated he will sign a bill allowing farmers to collect all of their 1999 market transition payments starting in October.

"You can either get the entire year's payment in one lump sum, or get the money in two equal payments," Glickman explained. "It will be the farmer's choice. I will say to you, however, that while that is a good way to get cash into people's hands early, it is not new money. It is money that would be paid out anyway. While it will help some folks, it is not any long term solution to our problems."

With the full advance on next year's money and CRP payments, Texas producers will receive about $900 million in direct payments this year.

"These are welcome steps, but they're not long term security for American agriculture," Glickman said. "We need to stay focused on boosting exports. Forty percent of our agricultural exports last year went into the Asian markets. That is where the toughest troubles are right now. It's one of the prime reasons why exports are down and farm income is expected to go down."

Countries that were large buyers of U.S. agricultural commodities in Asia have dramatically reduced their purchases.

"The number one thing we can do right now in terms of exports is to support of the International Monetary Fund," Glickman contended. "What that does is provide currency stabilization so these countries can afford to get bank loans to buy our farm commodities.

"This is most significant in Asia, because that's where the strengthening economy is needed. Agriculture has the most to benefit of any part of the U.S. economy in terms of that International Monetary Fund assistance. We hope that is something that can be passed fairly soon."

In the short term, he said, agriculture need an emergency assistance program that will supplement livestock producers as well as people who have suffered losses because of inadequate crop insurance.

"The Senate has approved $500 million in emergency assistance already," Glickman said. "I believe the House will approve a significantly higher amount."

He said losses are substantially higher than $500 million.

"When that number was put in the Senate bill, the scope of the Texas disaster had not yet been quantified," he explained.

Much of that money will probably go to people who have suffered repeated crop losses as well as provide livestock feed assistance, Glickman predicted.

"We do have some gaps in the risk management system," he conceded.

Glickman said that under the current law nothing can be done to help ranchers.

"For the past few years, USDA has been able to piece together ad hoc disaster assistance using what was left over in the old Emergency Livestock Grain Reserve," Glickman explained, "but that reserve is now dry. Congress has not appropriated any money for it. I would like to see it replenished by Congress so we have a permanent program."

Dollar for dollar, he said, ranchers make up one half of the U.S. agricultural economy.

"They also need our assistance when disaster strikes," Glickman said. "As things stand today, we are really without any tools at all to help ranchers."

Stenholm said his Temporary Emergency Agricultural Act, HB 4508, will be the framework under which he hopes the House and the Senate can agree on crop insurance supplements and a livestock feed program.

"We've got that in place, so we hope we can hit the ground running in September when Congress reconvenes," Stenholm said.

But he cautioned that chances of removing the cap on loan rates and extending the loan period from nine months to 15 months so producers won't have to market in the same crop year are slim this year.

"We do not have any desire on the part of the leadership of the House or the Senate to make that decision," Stenholm said. "I do think it will be very heavily considered as we move into the next year of the current farm program. I think it is becoming more and more apparent to all members of the House Agriculture Committee, both sides of the aisle, that we might have locked ourselves into a low cycle that is much too low to sustain agriculture with the current cost of production."

Noting that only 21 legislative days remain for the 105th Congress, now on their summer break, Stenholm said he expects more action will be taken after the first of the year by the 106th Congress.

Stenholm also said he hopes there will be action taken concerning livestock feed relief.

"There is no permanent legislation concerning the Emergency Livestock Feeding Program," Stenholm explained. "That will have to be legislative if there is going to be any resolution."

Provisions for emergency livestock feeding are included in Stenholm's bill and in a bill introduced by Congressman Larry Combest, R-Lubbock.

Two years ago, Glickman said, prices for most agricultural commodities were reasonably good.

"Today, we have unreasonably bad prices," he said.

He listed the Asian crisis, the strong dollar that makes U.S. products more expensive overseas, and high levels of inventories.

"We have parts of this country with record yields," Glickman continued. "My own state of Kansas had wheat yields statewide this year of nearly 50 bushels an acre. We've seen big production in Argentina and Australia. If the Europeans have a good crop this year, they will be sitting with one of the largest carryover stocks in their history.

"All these things together have made for big surpluses of farm commodities. We have a lot of trade situations where our trading partners don't play as fairly as we do in terms of their markets being open to our products."

In the context of all this, Glickman said, the 1996 farm bill caps loan rates at low levels so there is no sufficient floor on prices. Before the 1996 reform effort, the loan rate would float with the market. It was based on 85 percent of the market for the previous five years, taking off the high and the low years.

"That formula was gone because of the 1996 Farm Bill, and now those numbers are arbitrarily fixed in the statute," Glickman said. "There's nothing we can do about them. They're at fairly low levels."

The loan rate had tended to support prices during very low markets, but that situation no longer exists.

"When you have a situation where the world is awash in product, and you don't have any kind of stabilization in terms of domestic farm policy, you have a scenario where you have very low prices," Glickman said.

He said it will take legislation to make those changes, and that will probably not happen until next year.

"We have a lot of challenges facing American agriculture," Glickman concluded. "It was a lot more fun being Secretary in 1995 and 1996, when prices were good."