Table Of ContentDAIRY BUDGET RECONCILIATION AND
SELF-HELP INITIATIVE ACT OF 1993
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D.iri Budjiet Reconcilijtion md Sel... eforethe
ON LIVESTOCK
SUBCUiViiViii'TEE
OF THE
COMMITTEE ON AGRICULTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRD CONGRESS
FIRST SESSION
ON
H.R. 2664
JULY 21, 1993
Serial No. 103-27
DEC
t 7 1993
Printed for the use of the Committee on Agriculture
U.S. GOVEIWMENT PRINTING OFFICE
72-891 WASHINGTON : 1993
ForsalebytheU.S.GovernmentPrintingOffice
SuperintendentofDocuments,CongressionalSalesOffice,Washington,DC 20402
ISBN 0-16-041785-6
DAIRY BUDGET RECONCILIATION AND
SELF-HELP INITIATIVE ACT OF 1993
y 4. AG 8/1:103-27
lARING
»>irj Dudjet RecccilUtion ..d Sel... eforethe
SUB(JUMiviiTTEE ON LIVESTOCK
OF THE
COMMITTEE ON AGRICULTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRD CONGRESS
FIRST SESSION
ON
H.R. 2664
JULY 21, 1993
Serial No. 103-27
..:.,. .. iUv
DEC
1 7 1993
Printed for the use of the Committee on Agriculture
U.S. GOVERNMENT PRINTING OFFICE
72-891 WASHINGTON : 1993
ForsalebytheU.S.GovernmentPrintingOffice
SuperintendentofDocuments.CongressionalSalesOffice,Washington.DC 20402
ISBN 0-16-041785-6
COMMITTEE ON AGRICULTURE
E (KIKA) DE LA GARZA, Texas, Chairman
GEORGE E. BROWN, Jr., California, PAT ROBERTS, Kansas,
Vice Chairman RankingMinority Member
CHARLIE ROSE, North Carolina BILL EMERSON, Missouri
GLENN ENGLISH, Oklahoma STEVE GUNDERSON, Wisconsin
DAN GLICKMAN, Kansas TOM LEWIS, Florida
CHARLES W. STENHOLM, Texas ROBERT F. (BOB) SMITH, Oregon
HAROLD L. VOLKMER, Missouri LARRY COMBEST, Texas
TIMOTHYJ. PENNY, Minnesota WAYNE ALLARD, Colorado
TIM JOHNSON, South Dakota BILL BARRETT, Nebraska
BILL SARPALIUS, Texas JIM NUSSLE, Iowa
JILL L. LONG, Indiana JOHN A. BOEHNER, Ohio
GARYA. CONDIT, California THOMAS W. EWING, Illinois
COLLIN C. PETERSON, Minnesota JOHN T. DOOLITTLE, California
CALVIN M. DOOLEY, California JACK KINGSTON, Georgia
EVA M. CLAYTON, North Carolina BOB GOODLATTE, Virginia
DAVID MINGE, Minnesota JAY DICKEY, Arkansas
EARL P. HILLL\RD, Alabama RICHARD W. POMBO, California
JAY INSLEE, Washington CHARLES T. CANADY, Florida
THOMAS J. BARLOW III, Kentucky NICK SMITH, Michigan
EARL POMEROY, North Dakota TERRYEVERETT, Alabama
TIM HOLDEN, Pennsylvania
CYNTHIAA. McKINNEY, Georgia
SCOTTY BAESLER, Kentucky
KAREN L. THURMAN, Florida
SANFORD D. BISHOP, Jr., Georgia
BENNIE G. THOMPSON, Mississippi
SAM FARR, California
PAT WILLIAMS, Montana
BLANCHE M. LAMBERT, Arkansas
Professional Staff
DiANNE Powell, StaffDirector
Vernie Hubert, ChiefCounsel and Legislative Director
Gary R. Mitcheix, Minority StaffDirector
James A. Davis, Press Secretary
Subcommittee on Livestock
HAROLD L. VOLKMER, Missouri, Chairman
GARYA. CONDIT, CaUfbmia, STEVE GUNDERSON, Wisconsin
Vice Chairman TOM LEWIS, Florida
EARL F. HILLIARD, Alabama ROBERT F. (BOB) SMITH, Oregon
CHARLES W. STENHOLM, Texas JOHN A. BOEHNER, Ohio
Tm HOLDEN, Pennsylvania BOB GOODLATTE, Virginia
JILL L. LONG, Indiana RICHARD W. POMBO. CaHfomia
COLLIN C. PETERSON, Minnesota
CHARLIE ROSE, North Carolina
CALVIN M. DOOLEY, California
BILL SARPALIUS, Texas
(II)
CONTENTS
Page
H.R. 2664, a bill to achieve needed savings in net Federal expenditures
under the milk price support program through establishment of a milk
epxrpoodrutcse,rasnedlf-shtealbpilpizreogtrhaemmtaorkdeitspofsoer omfilskurapnludsddaaiirryypprroodduuccttss,, aenxdpafnodr
other purposes 86
Boehner, Hon. John A., a Representative in Congress from the State of
Ohio, openingstatement 8
Prepared statement 9
Condit, Hon. Gary A., a Representative in Congress from the State ofCalifor-
nia, prepared statement 4
Dooley, Hon. Calvin M., a Representative in Congress from the State of
California, openingstatement 7
Gunderson, Hon. Steve, a Representative in Congress from the State ofWis-
consin, openingstatement 2
Lewis, Hon. Tom, a Representative in Congress from the State of Florida,
openingstatement 7
Peterson, Hon. Collin C, a Representative in Congress from the State of
Minnesota, openingstatement 6
Sarpalius, Hon. Bill, a Representative in Congress from the State ofTexas,
openingstatement 10
Smith, Hon. Robert F. (Bob), a Representative in Congress from the State
ofOregon, prepared statement 11
Volkmer, Hon. Harold L., a Representative in Congress from the State of
Missouri, openingstatement 1
Witnesses
Barr, James C, chiefexecutive officer, National MilkProducers Federation .... 31
Prepared statement 58
Ozer, Kathy, director, NationalFamilyFarm Coalition 35
Prepared statement 75
Tillison, James E., executive director and chief executive officer, Alliance
ofWestern MilkProducers 33
Prepared statement 68
Weber, Bruce R., Acting Administrator, Agricultural Stabilization and Con-
servation Service, U.S. DepartmentofAgriculture 12
Prepared statement 52
Submitted Material
Hauck, Dana, chairman, agriculture policy committee, National Cattlemen's
Association, letterofJulv20, 1993 79
Huber, Stewart G., president, Farmers Union Milk Marketing Cooperative,
letterofJuly 20, 1993 80
Rucks, T.T., president, Florida Daiiy Farmers Association, and John Hobbs,
president, Tampa IndependentDairy FarmersAssociation, statement 82
Swenson, Leland, president. National Farmers Union, letterofJuly 21, 1993 . 84
(III)
DAIRY BUDGET RECONCILIATION AND SELF-
HELP INITIATIVE ACT OF 1993
WEDNESDAY, JULY 21, 1993
House of Representatives,
Subcommittee on Livestock,
Committee on Agriculture,
Washington, DC.
The subcommittee met, pursuant to call, at 2:20 p.m., in room
1302, Longworth House Office Building, Hon. Harold L. Volkmer
(chairman ofthe subcommittee) presiding.
Present: Representatives Condit, Hilliard, Stenholm, Holden, Pe-
terson, Dooley, Sarpalius, Gunderson, Lewis, Smith of Oregon,
Boehner, Goodlatte, and Pombo.
Staff present: Andy Baker, assistant counsel; Glenda L. Temple,
clerk; Timothy P. De Coster, Dan McGrath, James A. Davis, Perri
D'Armond, John Riley, and John Frank.
OPENING STATEMENT OF HON. HAROLD L. VOLKMER,AREP-
RESENTATIVE IN CONGRESS FROMTHE STATE OF MISSOURI
Mr. Volkmer. I first wish to apologize not only to my sub-
committee members, but to the witnesses and the audience; but out
in my district and in the Midwest, I think we all know that we
have a flood going on. The Rules Committee started a rule on the
disaster legislation earlier, and I thought I would have an oppor-
timity to testify on it as to some provision that I thought may per-
haps need to be improved.
But I waited and waited, and they are still talking to the Appro-
priations people, so Ijust left my amendments and came back over.
SoWIedidn't get to do that. But I appreciate your waiting.
are meeting today to review H.R. 2664, the Dairy Budget
Reconcihation and Self-Help Initiative Act of 1993.
[H.R. 2664 appears at the conclusion ofthe hearing.]
Mr. Volkmer. This bill embodies a dairy program developed over
the past several months by dairy producers, represented by the Na-
tional Milk Producers Federation. Congressman Gunderson and I
agreed to introduce this proposal in order to facilitate discussion of
the measure, and we intend to explore this plan in some detail
today.
Consensus in the dairy industry is something that is very dif-
ficult to achieve, but it appears that the federation has made the
effort to do just that. We will begin to determine today whether
they have succeeded. I will note that on one point that most dairy
producers appear to agree is that the current program does not
(1)
adequately protect the livelihood of today's producers, particularly
the small and midsized operations run primarily as family farms.
During consideration of the 1990 farm bill, and again in 1991, I
advocated a two-tier dairy program. I still believe in that approach,
and I believe today's dairy producers would be in a better position
today had that plan been adopted.
However, as our distinguished committee chairman often states,
legislation is the art ofthe possible. Based on my conversation with
members and other interested parties, I am convinced that we do
not have sufficient support for two-tier at this time, and—we need
to concentrate our efforts on the best possible alternatives attain-
able alternatives.
The federation's self-help initiative represents one possible alter-
native, which I for one am willing to consider. I am aware that
members have questions about this plan, and I urge you to take
your questions to the federation.
I would like to say this, that as I have reviewed their proposal,
I find, as I have found in my legislative experience, that something
may not be what I would like to have, it may not be as good as
I think it could be, but ifit is better than what we presently have,
then I think we should approve it ifwe make it a little bit better.
And I think that is what this proposal does.
I yield to the gentleman from Wisconsin.
OPENING STATEMENT OF HON. STEVE GUNDERSON, A REP-
RESENTATIVE IN CONGRESS FROM THE STATE OF WISCON-
SIN
Mr. GUNDERSON. Thank you very much, Mr. Chairman. And let
me begin by commending you for holding this hearing. I think,
frankly, it is important that we begin this kind of discussion other
than at a time ofa total crisis surrounding us. I think we have the
right environment to look at where we go with the dairy industry
and the dairy price support program.
Let me also welcome our distinguished panel of guests who are
about to testify. As we all know, this is the time in which we begin
to turn to the dairy industry for their input and their discussions
ofthe day-to-day operation ofa farm program and how to turn over
to them the responsibility of the running that program. That is
why I believe you and I have both introduced this legislation for
consideration.
A lot has happened to the dairy industry and the dairy price sup-
port program in the past decade. Indeed, spending has decreased
from $2.4 billion in 1986 to a level of under $300 million in recent
years. This is due in large part to the revenue from the budget rec-
onciliation assessment collected from dairy producers which, when
compared to the annual cost of the dairy price support program,
offsets approximately 40 percent of the cost of the program each
year.
Accordingly, we have introduced this legislation fashioned by the
executive board ofthe National Milk Producers Federation in a se-
ries of meetings this spring as an important first step in creating
a self-help program for America's dairy farmers.
The importance of self-help to the dairy industry is underscored,
by the changing times in which we live. With the demise ofthe So-
viet Union, American dairy farmers now represent the single larg-
est dairy industry in the world. We no longer produce for a market
that ends at the boundaries of our country. Rather, we are active
players in the world market. Indeed, exports of American dairy
products in the first 4 months of 1993 are up 18 percent from the
same periodjust 1 year before.
It is, therefore, most appropriate that we begin our examination
of dairy self-help legislation at this time and in this place. This
proposal, of course, represents a major transition in the 45-year
history of the dairy price support program. As such, it is essential
we make a complete review of the legislation so that we fully re-
spond to any questions or concerns that this transition might raise
in the agricultural community or elsewhere.
I, for one, am greatly concerned about ensuring that America's
dairy industry becomes and remains competitive in a world dairy
market now and throughout the 21st century. It is most important,
then, that this legislation foster rather than inhibit, that particular
goal. That is why I want this subcommittee to closely examine the
targeted excess purchases reduction section of this legislation to
make sure that it will not act as a disincentive to new dairy farm-
ers or producers who want simply to modernize the multitude of
aging facilities that we have in this country.
In Wisconsin alone, the average bam or dairy facility today is
over 40 years of age. If we have any hope of bringing a younger
generation onto those dairy farms, we have to assure them the
ability that they can modernize those facilities without penalty of
Federal law. Likewise, while none of us likes assessments, I think
we ought to take a good look during these discussions as to wheth-
er or not we want to make that 10-cent assessment for deficit re-
duction purposes permanent.
Very frankly, I am not sure that we ought not look at giving the
dairy industry the authority to do more than what this bill calls
for today. Right now, the dairy industrj' pays a very heavy price
ofGovernment regulations and control for the $250 million in reve-
nue the price support program receives annually. Perhaps we are
at the time where we ought to look at what the minimum Govern-
ment purchases for nutrition, military, and other feeding programs
ought to be, and then turn the rest ofthis over to the industry and
give them the authority to move accordingly,
Mr. Chairman, I look forward to working with you and the rest
ofthis subcommittee and, obviously, our distinguished panelists to
try to accomplish the goals ofthis dairy self-help legislation.
I want to apologize in advance for being in and out of the room
this afternoon. I am the Republican floor manager for the national
service bill and I am going to have to float back and forth, and I
ask your indulgence.
Mr. VOLKMER. The gentleman from Pennsylvania,
Mr. HOLDEN. No statement.
Mr. VoLKMER. Any prepared statements received from the mem-
bers will appear at this point in the record. The gentleman from
Minnesota,
[The prepared statement ofMr. Condit follows:]
STATEMENT BY
THE HONORABLE GARYA. CONDIT
SUBCOMMITTEE ON LIVESTOCK
H.R. 2664
DAIRY BUDGET RECONCILIATION AND SELF-HELP INITIATIVE
ACT OF 1993
JULY 21, 1993
Mr. Chairman, I would like to take this opportunity to thank you for
scheduling this important hearing to examine H.R. 2664, the "DairyBudget
Reconciliation andSelf-Help InitiativeActof1993." As we all know, dairy
farmers in recenttimes have experienced stable prices. However, as past
history indicates, these prices could change drastically at any given moment
because ofan array ofcircumstances. I am pleased thatthe Chairman has
convened this hearing to look at H.R. 2664 and the impact itwill have on dairy
farmers. While I believe thatwe need a thorough review and discussion on any
majordairy policy shiftthatwill affectthe nation's dairy farmers, I wantto
applaud the efforts ofall involve who have begun this process.
We all acknowledge that our nation faces a severe budgetcrisis that
demands fiscal responsibility by ourgovernment. However, in the coming
weeks we mustjudge H.R. 2664 in relation to the problems we nowface in rural
America and ourfarm sector. Today's hearing will begin the process too
provide us with the direction thatwe need to design a.national dairy program
