funding the energy title. and i am proud that american agriculture does not need the federal government to make its decisions. our freedom to farm act ended many of those old controls. in a globally competitive marketplace american agriculture has remained on top because of efficient land use, machinery, science and technology, and as we debate these policies today we can celebrate the fact that america's farmers and ranchers will continue to grow even more successful, remain the world's leader in feeding, growing populations, if our government programs stay out of their way. i thank you again, madam cha chairwoman. >> thank you, senator lugar for thoughts and hard work that helped get us to this point and in turning to senator conrad, he will speak this. good news on the energy front. we're pleased about that. and a personal privilege with senator conrad to say what i

said in the budget committee a little earlier about the fact that very, very sorry to see you retire. you have been extraordinary budget chair, nobody knows more about agriculture than do you sitting around here in terms of economics and numbers and how to make it work, and it's a great pleasure to work with you and we're going to continue, and just very grateful for all of your leadership over the years. senator conrad? >> well, thank the chairmanwoman very much. thank you for your extraordinary effort on this bill. you have been fully engaged, fully committed and very effective, and all of us oh you a debt of gratitude. i don't think i've of seen anybody dig in as completely as you did at a very difficult time with the special committee looming. you seized the reins of responsibility and all of us are in your debt.

i also want to thank our ranking member. senator roberts, who, surprise to me, has actually didn't some pretty good work on this as well. okay. it really has been good work. and i -- i enjoy his sense of humor as i hope he enjoys mine. look, this bill is a win for taxpayers clearly. this is a win for reformers. this is a win for farm and ranch families all across the country. this is a win for the economy of america. so this is important business. farm policy has many critics, and one of the things that's amazed me in my 26 years is how often ill-informed some of the critics are. we hear all of the time that a farm bill benefits just a few

wealthy farmers and ranchers. all of us who sit around this table and participate in the work of this committee knows that is not true. the vast majority of the funding in this bill goes for nutrition programs that are primarily directed to benefit children. and it goes into every corner of america. in fact, only 6% of farm bill spending, less than 0.2% of 1% of overallfederal spending goes to farm programs and i think somehow that gets lost in the national discussion. between natural disasters and unpredictable price fluctuation, farming is a risky business. safety net programs are absolutely critical to producing the most abundant, safest, least expensive source of food in the world, and helping our producers compete in world markets where our major competitors are

providing four times at much support to their producers as we provide to ours. our european friends are providing four times as much support to their producers and we're providing to ours. now, that is a critical fact that the people of the united states need to know, and, of course, it's not just the europeans that are competitors. we see brazil and others moving up fast, and we have got to give our farmers a fair, fighting chance. i believe 2008 farm bill, which many of us around this table had a major role in, enhanced the farm safety net and expanded conservation nutrition, bioenergy production it contributed to the strong economic performance of the american agriculture and an otherwise slow economy and it was fully paid for. fully paid for, and i want to especially thank senator chambliss for the extraordinary leadership he provided in writing that farm bill.

because it made a big difference across our country. as we build on those successes and contribute to deficit reduction, north dakota farmers tell me that direct payments really can no longer be offended. that farm programs need to be simplified, and that crop insurance should be strengthened and complemented with new programs that are easier to administer and easier to it comply with. in particular, while crop insurance works well in most circumstances it has two gaps that i think we all recognize. first, it does not work well in a period of declining prices. especially when they're rapidly declining. second, crop insurance does not protect against repeated years of shallow losses, and over an extended period of time, those shallow losses can mean very, very deep problems for our farm and ranch families. in response, we have pushed for

a shallow loss revenue program that will fill these two gaps while saving taxpayer dollars. i am pleased the chairwoman included some elements of those proposals in her bill by providing for a farm level revenue assistance program in the past few day, i think we've been able to improve it and strengthen it. i very much appreciate the chairwoman's commitment that we'll continue to work as we go to the floor and beyond to try to do even better. i'm also just in conclusion pleased that senator lugar and i were able to offer and amendment that you have adopted, as i understand it, in the mark, to provide funding for the energy title. that, too is is a win for our economy, a win for the environment, and a win for national security. our amendment which has a support from a strong majority of the committee will add a critical dimension. so in conclusion, madam chairwoman, i just want to, again, thank you for your really

extraordinary leadership. it is so important to the country, to the congress, to this committee, we appreciate it, and i also want to thank my colleague, senator baucus who has been a rock, helping to stick up for our part of country. i really deeply appreciate senator baucus, how you've provided leadership over and over on issues critic toll our part of the country, and to senator hoven as well. a new member of the committee. a colleague of mine from my home state. i deeply appreciate the new energy that he's brought to this committee as well and sticking up for our state. >> thank you very much. i should just clarify that we actually will have to offer the energy amendment, but we're set with it, but we will have to offer that today. so let me turn now to senator chambliss who has has been --

obviously shown tremendous leadership over the years in so many ways in agriculture and i know we still have more work to do together but i'm looking forward to doing that and very much appreciate your championing the interests of georgia and of the south and we're looking forward to continuing to work with you on it. >> well, thanks very much, madam chair, and let me just start out by saying that i thank my friend senator conrad for his kind comments. this, lie snat a minute, is myfour farm bill, three of us i have had the privilege of working very closely with senator conrad. we -- when he was in the senate and i in the house, it made no difference. we both had the interests of the american farmer at heart, and your leadership, your commit to americaning a s ing ing a agric truly going to be missed. in some ways i won't miss you.

in other ways -- i'll have to think about that. but, seriously, you have been a true champion of american agriculture and you and i have had the privilege of working on any number of issues together but we have consistently been strong advocates for agriculture, and i thank you for your leadership and your friendship there. madam chair today, we're here in the not reauthorize the farm bill and as a former chairman and ranking member of this committee i understand how difficult it is to combine all diverse interests into legislation that meets the needs of all members around this table and this bill before us is no exception. but i do want to say to the chairwoman and the ranking member, you have been diligent. you have worked hard. you have been open. and you have been willing to dialogue, even when we couldn't agree. you at least would hear our concerns.

and this could maybe continue its stellar reputation, in my opinion, of being the most bipartisan committee in the united states senate and under your leadership i think that's just been strengthened. so to you and the ranking member, who is my dear friend, my, as he and i referred over the years, i'm either his shotgun rider or he's my wing man. thanks to both of you for the great work that you've done. i think we can all agree that farm bill needs to provide an effective safety nat farmers and ranchers can rely on in times of need. agriculture producers face a combination of challenges. such as unpredictable weather, variable input costs and market volatility that combine to determine profit or loss in any given year. the 2008 farm bill has been providing a strong safety net program for producers over the last four years. and i believe that successive

legislation must adhere in honor of the same commitment we made four years ago to ranchers and producers. at the same time, i believe the agriculture sector can contribute its fair share to deficit reduction and the bill before us provides significant savings and mandatory spending programs. however, all sectors of this agriculture bill must contribute its fair share and the key is to do this in an equitable and fair manner as we have always done. i participated in the writing of four farm bills as member of congress. none of which have been easy, and each bill has had its unique challenges and opportunities. balancing the needs and interests of all agriculture requires patience, fairness and a willingness to work with all members of this committee. it's very important we recognize the unique differences between the geographical regions and the commodities grown in those regions. as the international markets been more complex worldwide we

must be mindful that a one size fits all program will not work for u.s. agriculture with reez regions more diverse than of before. we need to recognize this diversity by providing producers with different options to confront the marketing and regional differences that define our country. washington does not always know best. right now the bill before us fails this test. it is neither equitable nor fair and attempts to redistribute resources from one region to another. after ducting a fair share for deficit reduction, a certain commodities receive more resources than others and croms sump as peanuts and rice are left without any safety net whatsoever. we've read reports and analyses illustrating the lopsidedness of the bill. among the biggest losers in the budget baseline are wheat, barley, grain, sorghum, right, cotton and peanuts. we should not convince ourselves that this will not cause

enormous consequences for many regions kuchbt. put simply, by making the bill more conducive for certain crops at the expense of the many, this bill lacks balance. some will say that planting shifts are responsible for much of the change in the budget basesline and that is in part true, but it does the no take away from the injury inflicted on particular regions of country nor does it tell the whole story. by squeezing all crops into a program specially design ford one or two crops, this bill will force many growers, particularly in our region to switch to those crops in order to have an effective safety net. and isn't this the very planning distortion caused by farm policy that we ought to avoid? but flz there's another egregious problem with this bill. the safety net will not be there when farmers truly need it. whether offered as a own farm

nar nair ode 10% band of revenue protection will not help farmers should crop prices collapse. under this bill a form hear an 11% deductible with the next 10% of losses covered. however many farmers may be totally exposed to a plunge in crop prices that hits the proposed loan rates. these proposed loan rates are set so low that if prices reached that point, the farmer's going to be out of business, and, sure, crop insurance can cover the production side of the risk, if you can afford to buy higher coverage, but it does not cover consecutive year-to-year low prices. even the 10% revenue band the bill provide has significant problems, since the revenue guarantee is based on the previous five years price and production, which may not be sufficient to provide an effective safety net. this is wrong, and for this and my concerns over the process that led us here, i'm not likely to support this bill. in spite of this i do recognize

the chair and ranking member for including a new crop insurance flam complies with our international commits. as former chair and ranking member of this committee i've always committed to finding a solution to the brazil case, authored legislation in 2005 and again in 2008 that made significant changes in the cotton and export programs to bring us into compliance with our international commitments. and along with senator cochran, we eliminated the step two program, reformed the continue marketing loan program and reap deuced the cotton counter cyclical program unilaterally and in good faith. we find ourselves significantly reforming the cotton safety net with a stacks program. the program's in this bill is a significant departure from what it recovered from other covered commodities and hopefully resolve brazil once and for all. my hope, our brazilian friends

will put this issue behind us. the farm bill in front of us attempts to shoe horn all into a one size fits all policy. i do not believe this is equitable to my producers. producer choice is the better choice to follow and i regret this priority is not recognized. let us remember at the end of the day the reason we are here is to represent the hard working men and women who work the land each and every day to provide the highest quality agriculture food and products in the world. i believe we have the opportunity to right write a bill kwaet equal to their ghimt providing food, feed and fiber allowing us to be the greatest nation on earth. right now it appear what's this committee lacks is the willingness to do so but i look forward to the forthcoming debated, madam chairwoman, and thank you very much. >> well, thank you very much, senator chambliss. let me reiterate what we talk and privately. this is step one of a long prices. we're going to continue to work with you to improve and address

the kearns that you have. -- concerns that you have subpoena let me turn to senator baucus, thank you for your work, but in this committee i want to particularly say, we wouldn't have a livestock disaster assistance program without your add voe cases and that's a very, very important ten-year baseline part of this bill. we wouldn't have significant improvements in the farm level program pooir program. i've learned more about montana. they have bigger -- it has a bigger -- bigger counties than michigan. i now understand that and the differences, in all seriousness, is part of the challenge and i very much appreciating your advocating. nobody could fight harder for montana and we appreciate your add voe cases and leadership. >> thank you. madam chairwoman, if possible, i'd like to return the compliments that other senators have given to you and i say if it's possible, i don't know if i

can compliment you more, they've complicated you so well i just want to associate myself with their compliments. you have work sewed hard to get us here. all the numerous telephone calls received from you and i deeply appreciate the calls i've made to you. i hope you appreciate, as we've tried to work all this out. you were always there. i don't know anyone that works harder than you and is more receptive than you. you've been just terrific and in helping put this bill together. there were times i wasn't sure we going to make it, but you hung in there. you're determined. to get -- it's all resolved and i, for one, think i can speak from virtually every member of this committee saying how much we appreciate it. same with the senator from kansas. i'm not sure if i was surprised or not surprised how hard you worked. to make all this happen. basically not surprised. because you know the subject so well. and got a good sense of humor.

you try to do what's right. while you're protecting kansas, and think ak tbout the country,t senator, i want to tell you how much i appreciate your work too. there are many others here on the committee. met with the senator from georgia trying to work out the cotton issue, stacks and especially the inspector at wto and i -- i echo comments made by the chairman. got to keep working together to find way to make that work, that makes sense. and i also want to just thank the senator of north dakota. thanking everybody here, i especially want to thank him. he gave a great statement. a statement i wanted to associate myself with. pointing out a lot of the myths in country about agriculture. one of the best, being giving all of this money to farmers. really, as a senator, so well pointed out, most of the money goes to the nutrition programs. it doesn't go to farmers commodities.

a lot of americans don't know that. especially people in the east. they just assume, oh, there they go. farm padding their pockets, which is totally untrue. and second, pointed out as did the senator from kansas, this is a reform from kansas this is a reform bill. we're saving $25 billion, and i agree with the senator from kansas, that's a statement we can't make too often when we get to the floor. it is so important for people to hear that and to know that, and you worked to, you know, back in the super committee era to come up with a program to save about 23, and now it's close to $25 billion, and i want to tell you how much i appreciate that. i don't want to prolong this part of the markup with statements, but just to say how important this is to our state, agriculture is our number one industry. it's the most important industry by far in my state. one out of five jobs is related

to agriculture inman mon, one out of five. it's a bedrock of our state's economy, and as you alluded to, madam chairwoman, you know, i don't want to overstate this point, but montana is a little bit different from other states. doesn't main in montana. we have huge counties, as you said, and our farmers, our wheat farmers really have no option. they got to plant wheat. maybe they can go a little with lengthils and other crops, but can't plant corn in montana. you can't plant sorghums in montana. you can't plant other soybeans, for example, in montana. those options are available to farmers in other states. they are not available in our state, so we've got to make sure that the farm bill makes sense. we all want, you know, a safety net that makes sense. enough of a safety net but not too much, you know, trying to find the right balance, but in

each state that balance is a little bit different than it is in other states. i just am so thankful to you for working out a way that is -- that recognizes the sensitivities in our part of the country and includes north dakota, and i want to thank senator conrad and senator moven as we try to get something that makes sense to the country. we want to be part of the solution, not part of the problem but part of the solution and we're working with you to get there. this is the first step. there will be other steps along the way. they keep making improvements as with cotton and other commodities, and we deeply thank you for that. you mentioned the livestock program, and thank you so much for that to make that permanent because there's a lot of livestock producers, whether it's floods or fire or whatever it is, loss of grazing land, loose livestock, it just helps, and i get a lot of compliments at home that there's, you know,

that that program has helped. you know, farmers and ranchers in my state are the same as they are in any other state, you know. they are kind of philosophical about life, you know. they can't predict the markets very well. it can't predict the weather very well, but they are still optimistic and get out there and want to farm and want a ranch and they don't want to take advantage of other people. just don't want to be taken advantage of, and this bill i think strikes the right tone of just being there because we are in america together here, and it just means a lot to me that you've found i think a pretty good solution here, and i want to keep working with you as we proceed so thank you very much. >> thank you very much for those words. i want to turn now to senator johanns and first say on this committee we have former chairmen and we have ranking members. we're fortunate to have a former secretary of agriculture and let

me just note at this point when secretary johanns was secretary of agriculture he talked about performing conservation. we have taken of number of your ideas. you really gave us a basis for thinking and for moving ahead. i think we have a terrific conservation title, and you deserve a lot of credit for giving us a lot of ability to get started so i want to particularly thank you for that. >> well, madam chair, thank you very much for that. i appreciate you using some of those ideas, and what more can i say in appreciation to you and to the ranking member. you've both done a great job. i will offer an insight that writing the farm bill from this table is a lot different from writing the farm bill in the office of the usda, but the great thing about this committee is there's such deep experience. you know, you look at this committee. you -- virtually everybody here

has great ag background. they have either chaired this committee or they have been ranking members, so it's been very, very helpful in flushing out my ideas as i thought about this package. i'm in the camp of saying let's move forward. i'm going to support your efforts today because i do believe it's a great first step, and we need to move this process along. a couple of thoughts i would offer. the ag economy has experienced remarkable few years here. it is really stronger than it's ever been in some aspects it's historically strong. in recent years many producers have seen the opportunity to feed people or provide clothing or fuel in parts of the world that they probably would have never imagined that they would provide those items.

as a result of that we've seen farm income reach a record $98 billion with very low-to-asset ratios. i'm often asked are you concerned about what happened in the '80s in terms of could it happen today? sure, we always have that concern, but having said that, farmers tend to business. they have kept their debt reasonable. they have kept it low, and they have really tended to the business that they run, but at the same time we are recognized, including or farmers and ranchers, that our nation's budget situation is more daunting than ever. with our country's total national debt over 15 trillion, the federal government is now borrowing about 42 cents of every dollar. this farm bill though, like no other committee that i am aware of, has taken on the responsibility of providing

deficit reduction, and as you and the ranking member have pointed out this farm bill saves at least $24.7 billion. you can only imagine if other committees would accept the same responsibility how big a step we would take in dealing with our deficit issues, but in this package, like every piece of legislation, there's probably some things i like. there's probably some things i don't like that definitely is true. i'm not a fan of target prices and reference prices. people may ask, well, why is that? i'll share a story with you. i was secretary of agriculture when katrina struck, a devastating impact of the part of the impact of katrina was that for a period of time the shipping lanes down the river, the mississippi river, were blocked. we all knew that that was

temporary. we all knew that work was going to start just as soon as the wind stopped blowing to move the items that had sunk the ships and get that shipping lane opened up, but in a very brief period of time the price of corn dropped from about $2 a bushel to $1.60 a bushel. what happened? perfectly legitimately everybody locked in their loan deficiency payment. $4 billion went out the door at the usda almost overnight. now, we knew that was a very temporary time, and prices in fact came back to that $2 level. hard to imagine these days when we have such higher prices than that. what am i saying? i'm just saying when you set targets, then you are basically sending into the marketplace a direction as to how to utilize

that target so at the end of the day, the loan deficiency payment was paid out. the farmer continued to own the commodity, and at the end of the day really suffered no loss except in rather unusual circumstances. well, what i have heard and what i think members of this committee have heard is that the crop insurance plan offers the best opportunity to go to a more market-oriented farm bill, and i just want to wrap up today by just applauding you and the ranking member and so many members of this committee for recognizing that. i just think it's a significant step in the right direction for farm policy, and i applaud your efforts. thank you, madam chair. >> well, thank you very, very