March 7, 2002
The Honorable Tom Harkin
Chairman, Senate Committee on Agriculture, Nutrition & Forestry
328A Russell Senate Office Building
Washington, DC 20510
The Honorable Richard Lugar
Ranking Member, Senate Committee on Agriculture, Nutrition & Forestry
306 Hart Senate Office Building
Washington, DC 20510
Dear Chairman Harkin and Senator Lugar,
During the Senate debate on the Farm Bill, we joined both of you in a bipartisan effort to limit the amount of payments farmers can receive from the federal government. We voted to limit payments because we believe millionaires who do not live on a farm and do not work the land should not receive government assistance.
We hope the Senate’s overwhelming support for payment limitations will prevent millionaires from receiving federal farm assistance, but we are concerned about the impact payment limitations will have on family farmers in California and respectfully request that you recede to the House provisions where the Senate language hurts California. As you know, payment limits disproportionately affect family farmers of highly capital-intensive crops, particularly rice and cotton, which are the two most expensive program crops to grow. The $275,000 limit will hit rice and cotton growers first and would hit them hardest.
We are also concerned about the Senate Farm Bill language restricting the use of commodity certificates to provide a safety net for our farmers. When California family farmers bump up against their limitations, the loan program turns into a recourse loan, eliminating a farmer’s safety net. We should not deny essential financial assistance to commercial-sized farming operations in California when prices are extraordinarily low, while farmers in other regions of the country receive assistance on every bushel.
California’s farming operations are large, by some standards, because they must achieve economies of scale. Our costs of production per acre are significantly higher than many parts of the country because of our high land values and input costs. It would be discriminatory for Congress to penalize some family farmers based on a one-size-fits-all limitation on eligibility for benefits based on an arbitrarily selected acreage or faulty perception of what constitutes a "family" farm.
One cotton farmer we met from California’s Central Valley has a ten million dollar annual budget to farm 12,000 acres, yet he only draws a salary of approximately $50,000. His sons and son-in-law are partners and work on the farm, and his daughters run the office. He has farmed for over 50 years in California, but payment limitations in the Senate Farm Bill will force him to cut the amount of acres he grows of cotton by two-thirds and put his farm at risk. The bottom line is that large cotton and rice farms in California are family farms which should continue to receive payments, and not be discriminated against because of their size. These are not millionaires, but hard working family farmers.
Under the restrictions in the Senate Farm Bill, rice and cotton farmers in the West would be discouraged from planting these higher value crops on land beyond a certain number of acres. At some point, because of payment limitations, farmers would be forced to reduce their planting of rice and cotton. Instead, their land would have to lay fallow or be dedicated to other crops, such as specialty crops. As a result of this shift, prices for specialty crops in California could plummet.
It is important for Congress to ensure federal farm programs work for those who need them most, and we are glad the system has been scrutinized extensively during this year’s Farm Bill debate, but we do not want California farmers to be hurt disproportionately when cotton and rice farmers need these payments to compete on the world market.
We respectfully request that you recede to the House language which limits payments to $550,000 and allows the continued use of commodity certificates, while retaining the Senate Farm Bill provisions preventing payments from being paid to millionaires who make more than $2.5 million for three consecutive years and do not farm.
Thank you both for your continued hard work on the Farm Bill and for your attention to this issue.
Sincerely,
Senator Dianne Feinstein
Senator Barbara Boxer