USDA officials take Senate chairman to school on agriculture economics

Senate Agriculture Appropriations Subcommittee Chairman Robert Bennett, R-Utah, used an appropriations hearing Friday with Agriculture Department undersecretaries to try to get a basic education in agricultural economics.

Bennett, who has no experience on either the Senate Agriculture Committee or the subcommittee, took the subcommittee chairmanship when the former chairman, Sen. Thad Cochran, R-Miss., switched to the Homeland Security Appropriations Subcommittee.

Bennett began by asking whether farm payments go down at "any time." USDA's chief economist, Keith Collins, explained that the payments to farmers declined dramatically in 1996 when the world economy was growing at a rate of 3.3 percent and there was a global drought. He also said payments two years ago were $22 billion, but this year's total was only $17 billion.

Collins added that commodity prices are higher than they were two years ago, but not as high as in 1996 and that farm programs are now more "independent" of production.

Replied Bennett, "Sometime when we're not under pressure, you'll have to explain to me why that's a good idea."

Told that the default rates on loans to farmers, whose credit ratings are too low to get commercial loans, has gone down to around 13 percent, Bennett said that may be an improvement from a onetime level of 50 percent, but added that those farmers may be responsible for the surplus production that keeps farm prices low.

Bennett said it may be "heartless," but perhaps the federal government should say: " 'You folks ought to find another line of work.' Does it really make sense for the federal government to maintain excess capacity in agriculture?"

J.B. Penn, the Agriculture undersecretary for farm and foreign agricultural services, said Bennett was describing an "age-old" dilemma, but that the other side of the argument is that there is "a value in keeping people in rural areas."

Bennett told Thomas Dorr, the undersecretary for rural development, that he could not understand why there are programs for multifamily housing in areas "where the deer and the antelope play" and suggested that those programs and farm subsidies offer "a double incentive for people to remain in an uneconomic activity."

Dorr said many of the programs he supervises help "the 63 percent of rural Americans who don't get [farm] subsidies." Bennett noted that a steel mill in Utah tried to get federal subsidies, but did not and closed and that the owners of the mill and the workers seem to have "resigned themselves" to its closure due to overcapacity worldwide.

Bennett then switched to more conventional lines of questioning for appropriators. Noting that many rural Utah communities do not have adequate tax bases because so much of the land is owned by the federal government, Bennett told Dorr it is important to continue grant programs for rural wastewater treatment plants rather than just loan programs.

Bennett also said he had noticed that USDA's fiscal 2004 budget does not include continuation of wastewater research in Mississippi and asked if that was cut because Cochran is no longer subcommittee chairman. Joseph Jen, the USDA undersecretary for research, assured him that was not the case.

Bennett was the only senator to attend the hearing, which had originally been scheduled for Thursday. "It's a good thing I'm all alone," Bennett said. "None of my colleagues will have any memory of this."