>> again, we're waiting for this house agriculture committee meeting to get under way this morning. it's a meeting, not a hearing, as they mark up the 2012 farm bill. couple of notes on the bill. the senate recently passed its version of this bill. that bill known as the agriculture reform food and jobs act. the vote for passage was 64-35. however, the house and senate will need to reach a compromise

before september 30th, when the current farm bill expires. this bill, this current house bill, has legislation in it that would reduce spending by $3.5 billion a year or $35 billion over the next ten years and as we mentioned before, representative clyburn of south carolina opposing the bill, calling it an abomination because it contains $16 billion in cuts to food stamps. the hearing under way now. live coverage on c-span 3. >> i would like to recognize myself for opening comments. good morning. thank you all for joining us to consider the federal agriculture reform and risk management act. consideration of this bill is the next step in the process of authorizing the 2012 farm bill and i appreciate the efforts of my colleague, ranking member collin peterson, and the bipartisan nature in which this legislation was written.

i am and will always be a farmer and rancher. yes, while my wife runs the operation in oklahoma these days, my mind never leaves the farm. i know how risky it is to make a living as a farmer. i still check the weather every day, usually multiple times a day, because i know at a moment's notice, a dream crop can turn into disaster. our goal is to give producers choices to better manage risk, whether it's through improved crop insurance products, a new revenue program or through a price protection mechanism. i've said this many times before but it's worth saying again. a safety net is written for bad times. these programs should not guarantee that the good times are the best but rather, that the bad times are manageable. in general, the bill provides deficit reduction and reform. it's a tough farm bill but a fair one. we face huge deficits and a heavy burden of debt in continu

field hearings held by then chairman peterson. finally we wrapped up the series hearing. the information we gathered from those hearings have led us to where we are today, to consider

a bill that is balanced, reform minded, fiscally responsible and a considered policy that works for all regions and all crops. to consider improvements that increase program efficiency, integrity and accountability, reducing government spending and reforming government programs is never an easy task. we face difficult choices. but it is our responsibility to cut costs and improve program efficiency so that we can once again live within our means. the farm act includes numerous reforms, not only does it reduce the deficit by $35 billion, but it also repeals or consolidates more than 100 programs. specifically it repeals direct payments. in the past, i have defended direct payments because they are an efficient and trade compliant way to help producers manage price, production and cost risk. the direct payment has been a lifeline for a lot of farmers.

but there simply are no sacred cows. if it cost money, it was on the table for cuts. ultimately, we decided to repeal direct payments because of the size of the cuts we were making made it impossible to keep them. in fact, beyond the marketing loan program, we repeal all current farm programs now in place which saves taxpayers over $14 billion. we also make historic changes to the conservation title. this is a title that has been close to my heart for a long time. instead of the piecemeal approach we have used for years, we have made a comprehensive overhaul of conservation programs which eliminates duplication and improves efficiency. we consolidated the current 23 programs to 13. this saves $6 billion. we also closed loopholes and eliminate fraud, waste and abuse in the supplemental nutrition assistance program or s.n.a.p. some of the cuts we proposed to

food stamps are not enough, while others say the cuts are too much. i believe and most americans will agree a 2% cut in food stamps is reasonable. i would like to be clear that this legislation will not prevent families that qualify from assistance under s.n.a.p. law from receiving their benefits. we are working to better target the program and to improve its integrity so that families most in need can continue to receive nutrition assistance. we do that in a number of ways. first, s.n.a.p.'s resources have been stretched because this administration has encouraged states to take liberties in how the program's administered. some states are making nominally low income home energy assistance program, referred to as liheap payments to households so they can get an income deduction to help them receive a higher amount in s.n.a.p. benefits. in practice, that means states can game the system by sending a $1 check which can trigger an increase of up to $130 in

s.n.a.p. benefits. closing this loophole ensures that both liheap and s.n.a.p. are targeted to the families who need the assistance. similarly, most states have implemented categorical eligibility for s.n.a.p. which means that any household which benefits from a low income assistance program is automatically eligible for s.n.a.p. benefits. some of these benefits can be as simple as providing a household with a pamphlet or access to a 1-800 hotline number. when states implement categorical eligibility, these households do not need to meet the s.n.a.p. asset or gross income test. this program changes nothing for households that qualify for the program under the rules of the s.n.a.p. law. and those households will continue to receive the benefits level for which they qualify. families that receive cash assistance can still take advantage of categorical eligibility for s.n.a.p. but by ensuring only cash assistance triggers s.n.a.p. eligibility

and not other benefits like brochures, we can save billions of dollars over ten years. we have also -- we're also trusting states to do their job in administering s.n.a.p. current usda -- currently, usda awards $48 million per year to states to improve program efficiency. we all support good government efforts, taxpayers cannot afford to pay bonuses to states that are essentially just doing their job. the farm act ends state performance bonuses. the bill cracks down on waste, fraud and abuse by providing additional resources for usda to prevent trafficking of benefits. to further the goal of targeting nutrition programs for those families in need, the farm act increases assistance to our local food banks which have been struggling during the current economic climate. food banks have been successful in effectively using government dollars and securing private sector donations to feed the hungry. i urge you to approve this

reform-minded approach. it is a balanced bill that underscores our commitment to production agriculture and rural america, achieves real savings and continues to provide nutritional assistance to needy american families also. with that, i turn to the ranking member, mr. peterson, for any opening statement he may have. >> thank you, mr. chairman. good morning, everybody. i'm pleased that we're finally meeting to consider the 2012 farm bill and as i've said repeatedly, we need to finish this farm bill and send it to the president before the 2008 bill expires on september 30th. today's meeting brings us yet another step closer to achieving that goal and i'm pleased to see a commodity title in place that will work for all parts of the country as well as continued support for the no cost sugar program and for the dairy security act that will reform the current dairy programs, the biggest reform forever,

actually. i remain concerned with the proposed changes in the nutrition programs. i think there are better, more responsible ways to improve and reform federal nutrition programs, ways that would clean up some of the mess that states have made with these programs. however, the bottom line is that we need to move the legislation and i understand that these cuts are what's needed in order to get the farm bill through committee and through the house floor. so i'm confident that today, this committee will work together and ultimately pass this bill. only 13 legislative days remain before the august recess. if the house leadership fails to bring up this farm bill before the recess, they will jeopardize one of the economic bright spots of our nation's fragile economy. farmers need the certainty of a farm bill and i don't believe we can afford to wait for the mess that's going to occur during the lame duck and get drug into that whole mess and frankly, i think

an extension of current farm policy potentially creates more problems than it solves. so i'm hopeful that the house leadership will get this right and bring this bill to the floor shortly after we move it out of this committee so that we can ultimately finish this bill in september. let's hope that we don't get drug into this partisanship that pervades the rest of this place and we can continue to work on a bipartisan basis and do what's right for agriculture and for rural america and for the agriculture committee. again, i thank the chairman for holding today's meeting and encourage members to support the legislation. >> the chair thanks the ranking member for his comments. we now have hr 6083 before the committee for consideration. without objection, the first reading of the bill will be waived and it will be opened for amendment at any time. i would like to remind our members that while the majority of the provisions of this bill before us fall within the title of rule ten jurisdiction of the

committee on agriculture, under the provisions outside of the scope or outside of the scope of the agriculture committee's jurisdiction. therefore, under house rules, we will not be considering provisions outside the committee's jurisdiction during the markup. the committee does not have jurisdiction to vote on whether to approve, disapprove or amend provisions not within its jurisdiction and no such vote shall occur during the markup. other than to amend amendments that fall within the jurisdiction of the committee and to recommend that the bill pass or do not pass as amended or not amended. in conclusion, members will not be voting on the entire bill. instead, the vote will be on whether to report it to the house with recommendations on how the provisions that are in the bill, that are in the committee's jurisdiction, shall be amended as developed during the markup. now, with that disclaimer, although the bill is open to amendment at any point for the convenience of the members, i would encourage that amendments be offered on a title by title

basis. i would now recognize counsel for a brief explanation of title one. mr. counsel? >> thank you, mr. chairman. section one of hr 6083 is the short title and table of contents. section two is the deaf situation of secretary of agriculture. title one, commodities sub title a, repeels and reforms. section 1101 repeals direct payments effective with the 2013 crop year. section 1102 reveals the counter cyclical payments effective with the 2013 crop year. 1103 repeals the acre program. section 1104 contains majority and all common definitions for the title. section 1105 continues the secretary's authority to provide for adjustments for covered commodities and cotton when a crp contract is terminated in the same manner as current law. section 1106 continues the secretary's authority to establish payment yields for each farm for any designated oil seed that does not have a payment yield in the same manner as current law in time for the

2013 crop year, the owner of the farm can update the payment yields for each covered commodity once. section 1107 authorizes producers with more than ten planted acres of covered commodities to either elect price loss coverage or revenue loss coverage. section 1108 requires a producer of a covered commodity comply with certain environmental requirements before receiving a payment under section 1107. section 1109 sets 2013 through 2017 as the period of effectiveness for this subtitle. subtitle b marketing loans. section 1201 authorizes nonrecourse loans for loan commodities for the 2013 through 2017 crop years in the same manner as current law. it also includes a requirement for producers comply with certain conservation requirements. section 1202 continues loan rates for loan commodities that are in current law except for an adjustment to cotton which will float in a certain range according to prevailing world price. section 1203 continues the provisions of the current law and the terms of loans which are nine months with no extensions.

section 1204 requires the repayment of marketing assistance loans in the same manner as current law. section 1205 authorizes loan deficiency payments for the 2013 through 2017 crop years under the same conditions as current law. 1206 continues the authorization of payments for producers who have graced acreage for the crop years in the same manner as current law. 1207 continues authorization for the president to issue special imfort quota for the 2013 through 2017 crop year in the same manner as current law using official usda data. section 1208 continues the authorization through july 31st, 2013, of the special competitive provisions for the staple cotton in the same manner as current law. section 1209 continues the authorization for loans for the 2013 through 2017 crop years in the same manner as current law. section 1210 authorizes the secretary to adjust loan rates. subtitle c, sugar. 1301 reauthorizes the sugar

program, requiring the secretary to administer the program in the stam manner as current law. subtitle d, dairy, part one. dairy producer and dairy market stabilization programs. 1401 defines the terms used in the dairy market stabilization programs. 1402 establishes the average feed cost to be calculated each month for use in both the margin protection program and the stabilization program. subpart a, dairy producer protection program. section 1411 directs the secretary to establish a dairy producer margin protection program by providing basic margin protection payments when margins are less than $4 and provides supplemental margin protection up to an $8 margin if purchased by the producer. section 1412 establishes that all dairy producers in the united states are eligible to participate and sign up for the margin protection program to receive basic margin protection and if the producer so chooses, to purchase supplemental margin coverage. section 1413 establishes the

production history of producers. section 1414 establishes a basic margin protection program under which participating dairy producers receive a basic margin protection payment when the average actual dairy producer margin falls below $4 for consecutive two month period. section 1415 allows the dairy producer to purchase supplemental margin protection on a yearly basis. section 1416 establishes penalties for dairy producers that fail to pay the required administrative fees. subpart b, dairy market stabilization program. section 1431 establishes a dairy market stabilization program which is triggered when the actual dairy producer margin falls below a set level. 1432 requires the secretary to announce that the stabilization program is in effect and payment reductions are required. section 1433 requires the secretary to establish a process to collect the necessary producer and market information when the stabilization program is in effect. section 1434 requires handlers to reduce payments to participating dairy producers during any month in which payment reductions are in effect.

section 1435 requires handlers to remit to the secretary an amount equal to reduced producer payments. section 1436 lists the thresholds at which the secretary

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>> the chair now recognizes the gentleman from virginia, mr. goodlatte, for amendment number 85. you have five minutes, sir. >> thank you, mr. chairman. mr. chairman, i want to thank you and your staff and the ranking member and his staff for the hard work that's been done on this farm bill legislation, and i commend you for a great many improvements that are in it. including a number of the

provisions in it with regard to the dairy section of title one. however, i offer an amendment today with my colleague, david scott, that would strike the dairy market stabilization program that is included in the chairman's mark and based on legislation, of ranking member peterson and replace it with a stand alone margin insurance program for dairy producers. this amendment is consistent with 80% of the underlying legislation but does not include the controversial supply management piece. it offers a compromise that incorporates the two-tier premium structure that is in both the underlying bill and the senate passed bill while eliminating the stabilization program which is a complex governme reforms in this bill, our amendment gives farmers the tools to manage their risk without requiring them to participate in yet another government program. the new title one programs and our existing insurance programs do not require producers to participate in government supply management. why should dairy be different. a supply control program that will directly intervene in markets and increase milk prices will ultimately hurt producers as well as dairy food

manufacturers by stifling industry growth. i want to take a minute to explain how the ranking member's supply management program works. it requires government intervention in commercial transactions, pulling private sector funds out of the economy and away from farmers into the united states treasury. even those producers who signed up for the free catastrophic coverage would be required to reduce their supply on all milk produced when prices fall below $6, regardless of whether those farmers bought premiums to the $6 level and up. further, supply management would apply to all of the milk produced, not just that amount which is over the trigger levels. even if this program rarely triggers, a complete new set of regulations will be required of manufacturers to track and report current and historical production shipments which suppliers are in and out of the program, require new accounting and recordkeeping, audits,

tracking and potential enforcement penalties if someone miscalculates the growth penalty fees. this level of market intervention is unprecedented and unjustified. it's inconsistent with the direction of this farm bill and it ignores the repeated failures we've seen when we've tried to supply management -- when we've tried supply management in dairy and other commodities in --

the premiums are lower and there are no sign-up fees. in addition to small farmers who support this amendment, many of the largest dairies in this country support our amendment. these dairy farmers know that paying a modest premium for their production above the 250 cow level is a better deal for them than getting saddled with supply management. i know my colleagues on both

sides of the aisle in this committee have been pressured into thinking that supply management in the dairy title is the only way to get the farm bill passed. i reject that premise. david scott and i have developed a viable bipartisan alternative. please join us to support a revenue insurance program that will help dairy producers without including a government-controlled supply management program. i yield back. >> the gentleman yields back his time. >> mr. chairman? >> the gentleman from georgia wish to be recognized to strike the last word? >> i move to strike the last word. >> the gentleman will be recognized for five minutes. >> thank you, mr. chairman. the amendment that i offer today with my colleague from across the aisle, bob goodlatte, will keep milk and dairy products affordable for consumers and that is the main point. our proposed amendment would strike the dairy market stabilization program that is included in the chairman's mark and is based on hr 3062, the dairy security act offered by ranking member collin peterson.

and replace it with a stand alone margin insurance program for dairy producers. this amendment moves dairy policy in the right direction. it keeps most of what is in the ranking member's bill. it only gets rid of three existing dairy programs that are not performing and offers our farmers a new risk management program that will give them the stability and support that they need without the controversial and flawed supply management element that penalizes, not just consumers, but the rest of the entire dairy industry as well. speaking from my farmers, this amendment is actually more affordable to them than the underlying bill. the premiums are less and there are no hidden annual fees. what's more, my farmers are not going to face growth penalties from supply management and this stabilization program actually takemo