Opening Statements

Opening Statement: Chairman Conaway: State of the Rural Economy

Opening Statement: Chairman K. Michael Conaway Committee on Agriculture Hearing: To Review the State of the Rural Economy

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Washington, February 24, 2016 | comments

Remarks as prepared for delivery: 

I am pleased that Secretary Vilsack could join us for this annual hearing to assess the economic conditions in farm country. Thank you for joining us, Mr. Secretary. In assessing the situation, I think it is fair to say that America’s farmers and ranchers are falling on some very hard times right now. Worse yet, I don’t see the light at the end of the tunnel.  

To quantify what I am talking about, consider these figures:
The 2-year drop in net farm income that occurred from 2013 to 2015 marks the 2nd largest drop on record, behind only the drop that occurred from 1919 to 1921. Moreover, the 3-year drop in net farm income from 2013 to 2016 marks the 3rd largest on record behind the drops from 1918 to 1921 and 1929 to 1932, two of the worst periods in U.S. agriculture history. From 2013 to 2015, net farm income is expected to drop by a staggering 54 percent. Over the 3-year period from 2013 to 2016, net farm income is expected to drop by even more: a whopping 56 percent.  
  
While conditions on the farm are certainly different today than they were back in the early years of the 20th Century, these statistics still put into context what American agriculture is going through right now and just how problematic a sustained downturn could be. In addition, as history has repeatedly demonstrated, these conditions in farm and ranch country have ramifications not only for farm and ranch families but also for our rural communities and the national economy as a whole.

In short, we have a very serious problem unfolding right now in rural America. The farmers that I talk to from across the country tell me that they are very concerned that they do not see the kind of circumstances that are going to come along and end this downturn any time soon. They are also concerned that even as the prices they receive plummet, the prices they are paying for inputs remain as high as ever.  

As chairman of this committee, my concern goes out for every farmer and rancher in the country, wherever he farms or ranches, whatever he produces. That is the job of a chairman. But, I confess that I have a very special concern for those farmers and ranchers who are not only fully sharing in today’s economic downturn but who never shared much if any of the economic boom that preceded the current bust. Of course, I am speaking of those farmers and ranchers who never saw as big a run up in prices, or maybe none at all, or the farmers and ranchers who did see the run up in prices, but never had a commodity to sell due to natural disasters.

I think it is an accurate appraisal to say that a whole lot of farmers and ranchers from across the country are living on loans or burning up equity these days, but none more than the farmers and ranchers who never had opportunity to build equity before these hard times came along. The best solution for this problem is for prices to turn around. But, as I indicated earlier, farmers and ranchers I talk to are very skeptical that this will happen anytime soon.

So, what can we do? For Congress’ part, I believe it is our duty, our responsibility to hold the line on the Farm Bill and crop insurance, to draw a hard line against attacks that would undermine these laws and further jeopardize our nation’s farmers and ranchers. The Administration’s budget, which proposes a 20 percent cut to crop insurance as well as the attack upon crop insurance last fall during negotiation of the Bipartisan Budget Agreement are not helpful. But, I very much appreciate that Secretary Vilsack has mainly come down on the side of the farmer and rancher in these kinds of debates.  

For the Administration’s part, I believe that there are at least five things within the Administration’s power that would make a big difference for America’s farmers and ranchers. First, oppose further cuts to the farm safety net provided by the Farm Bill and Crop Insurance. Second, initiate WTO challenges against the high and rising foreign subsidies, tariffs, and non-tariff trade barriers that are key culprits in the current economic conditions our farm and ranch families face. Third, withdraw the Waters of the U.S. regulation that threatens to federally regulate every ditch in the country, effectively gutting any exemption for agriculture. Fourth, persuade Senate Democrats to support a federal preemption of state and local biotech labeling regimes. I know, Mr. Secretary, that you are very committed to this. And, fifth, use your authority under the law to designate cottonseed as an oilseed for purposes of the Farm Bill.  

Mr. Secretary, on this last issue, you and I have spoken extensively. We have exchanged papers.  At bottom, the big stumbling block that stands in the way of your taking action to deal with a growing crisis in the cotton belt is, your lawyers say, a lack of legal authority. Your lawyers point to a Supreme Court case that essentially held that a law cannot be interpreted in a manner that would contradict a decision that was made by Congress.  

This legal analysis would be spot on if we were asking you to include cotton lint in the Farm Bill. But, that is not what we are asking for. We are asking for you to include cottonseed.  As you know, the two are not the same even though they are from the same plant. Including cottonseed under the Farm Bill is not including cotton lint by another name.    

While Congress did consider the appropriate policy for cotton lint in the 2014 Farm Bill, Congress never considered the question of whether to include or exclude cottonseed as part of ARC or PLC. Instead, we left that decision to you. Therefore, were you to honor the bipartisan, bicameral request of more than 100 members of Congress, and designate cottonseed as an oilseed, you would not be contradicting the law and you would have our full backing.                                   

I don’t have to tell you that acres planted to cotton are now at their lowest levels in 108 years, excluding one year in the early 1980s when the government forced set-asides. We also know that this is not due to bad management on the part of farm families. This is due in large part to the actions of the Chinese and Indian governments over which our farmers have absolutely zero control.  

There is a very real decision to be made here. Will the United States government allow foreign countries to steal our cotton production just as they stole our textile mills, or will we stand up and say, “No, not this time. China and India, we will challenge your subsidies and stand by America’s farmers until truly free and fair trade is restored”. Producers of other commodities should beware. The same thing could happen to you. It all boils down to whether we are going to stand by our farmers and ranchers when they are under economic assault by a foreign government.

I yield to my friend and Ranking Member, Mr. Peterson, for his opening statement.