Chairman Frank Lucas today released the following statement on Scott O'Malia's last day as Commissioner of the Commodity Futures Trading Commission (CFTC). Last month, O’Malia announced he would resign to pursue other opportunities.
Opening Statement of Chairman Lucas at the Agricultural Program Audit: Examination of Title I and the SURE Program
Tamara Hinton, 202.225.0184
Good morning. I’d like to thank Chairman Conaway and Ranking Member Boswell for holding this hearing. And I’d like to thank Bruce Nelson and Juan Garcia for joining us from the Farm Service Agency.
Today’s hearing is the eighth audit of farm programs conducted by the Agriculture Committee’s subcommittees.
We’ve evaluated everything from conservation to nutrition assistance so far. We gathered information about which programs are most effective and which can be streamlined. Having these facts on hand will help us make difficult decisions when we begin developing the next Farm bill.
Each of those audits was important in their own right, but I believe today’s audit of Title I programs and disaster assistance is particularly significant.
Along with crop insurance, Title 1 programs form the very fabric of our farm safety net. They ensure that dramatic swings in commodity prices and volatile weather don’t put our farmers and ranchers out of business.
As a rancher, I understand how difficult it is for producers to invest in a crop and see any hope of profit vanish because of factors beyond their control.
Not only are producers engaging in a risky industry, but they have to significantly leverage their assets to do so. Farmers and ranchers borrow more money each year than most Americans will borrow in a lifetime.
In addition to the high personal risk and questionable returns farmers accept as part of doing business, they also put in hard labor every day.
I can tell you—in these temperatures every chore is that much harder. And while we can avoid the heat here in Washington by crossing between our offices and the Capitol in air conditioned tunnels, our farmers and ranchers have no such luxury. There are no tunnels out to the pasture.
That’s why I’m so grateful to the men and women who choose farming as a career. They work hard every day, braving the uncertainties of weather and commodity markets to produce high quality food for Americans and consumers around the world.
While they do the hard work of producing our food, we have to do our part to support them. Without a safety net, a few bad seasons can put a farm out of business. When we lose that source of production, we don’t usually get it back.
So maybe instead of speaking about this as a farm safety net, we need to start calling it a food safety net. Perhaps that will get the message out that commodity support keeps farmers in business, which keeps food on our plates.
That message seems to be getting lost.
When I talk to farmers and ranchers, I hear a constant refrain: we’re not asking for a handout; we just need a floor in place for when the bottom drops out.
That’s what crop insurance and Title I programs provide: a floor. A safety net for food production.
So when opponents of farm policy start talking about the “enormous” amount of money that could be saved by eliminating this safety net, I wonder what numbers they’re using.
The costs of losing food production surely outweigh the costs of a safety net. Especially when you consider that many Title 1 programs don’t kick in until prices fall below a set trigger.
I’d also like to get one thing straight right off the bat: there aren’t enormous savings to be found from cutting farm programs. They comprise less than one-half of one percent of the federal budget. That’s only 50 cents out of every 100 dollars.
Now, these are difficult times, and the agricultural community is going to have to accept budget cuts. But we don’t believe that we should take a disproportional hit.
We are prepared to reduce our spending, however, and these audits help us determine the best places to trim our budget and streamline programs.
We are here to take an honest look at the Title 1 programs to see how they are working in the countryside. Are they helping one group of producers over another? Are they more effective in certain regions? Is there duplication?
We need to evaluate the new programs from the 2008 Farm Bill. For instance, are there ways to improve the ACRE program?
I don’t believe the SURE program has worked the way most of us hoped it would. And it does not have a budgetary baseline once the 2008 Farm Bill expires. So we need to consider how that fits in to both our budget and our safety net.
And we have to look at our legacy programs too. Should the three-legged stool of direct payments, the counter-cyclical program, and marketing loan assistance be updated to reflect the new trends in prices?
I think we also need to look at the repercussions of eliminating programs. Do we eliminate all incentives for producers to participate and in turn when they do opt out, do we lose the conservation compliance that comes with program participation. We need to consider the potential consequences of any program changes.
I’m pleased that we have Mr. Nelson and Mr. Garcia here to help answer all of these questions.
Understanding the true costs and benefits of our Title 1 programs will help us develop a better Farm Bill moving forward.
I look forward to your testimony, and I thank you once again for being here.