Statement on Signing the Farm Disaster Assistance Act of 1987

I am today signing H.R. 1157, a bill entitled the Farm Disaster Assistance Act of 1987. This bill would establish an acreage diversion program that waives the requirement to plant at least 50 percent of a producer's 1987 permitted winter wheat acreage, where adverse weather prevented planting, in order for a farmer to receive deficiency payments with respect to 92 percent of his acreage. This same requirement would also be waived with respect to producers of 1987 crops of feed grains, wheat, upland cotton, and rice who are unable to plant their 1987 crop because of residual damage from 1986 natural disasters.

The bill would also: (1) make full payment to producers who have not been fully indemnified for losses due to natural disasters in 1986 because of the inadequacy of the $400 million appropriated for it; (2) increase the acreage that would be taken into consideration when making prevented planting payments for the 1986 crops of soybeans, peanuts, sugar beets, and sugarcane; (3) require computation of upland cotton losses to take into account quality losses in estimating total losses required to qualify for payments with respect to the 1986 crop; and (4) require indemnification of certain producers of hay, straw, apples, and other commodities whose 1986 crop was lost due to bad weather.

In addition, a number of amendments broaden the coverage of H.R. 1157 beyond disaster provisions. These amendments include a discretionary loan program for sunflower seeds and a requirement that if marketing loan programs are not established for wheat, feed grains, and soybeans for 1987 before enactment of H.R. 1157, the Secretary of Agriculture must prepare a study of these marketing loans.

It should be clearly understood that I do not favor the enrolled bill's acreage diversion provisions even though they embrace the concept of a legislative proposal, known as the "0-92" proposal, that my administration submitted to the Congress earlier this year. Our "0-92" proposal, covering 1988-1990 crops, would sever the link requiring a farmer to plant a crop of wheat, feed grains, upland cotton, or rice in order to receive deficiency payments. Repealing this requirement would be a major step towards reducing Federal interference in farmers' decisions regarding how much land they devote to crop production and which crops they plant. These decisions should be made by farmers, based on market forces, and not by the Federal Government. Our proposal would do that. It would also reduce the current incentives for crop overproduction, which currently are grown with the virtual certainty they will be purchased by the Federal Government under the farm price support programs. Eliminating this overproduction would save $1.8 billion over the next 5 years. The enrolled bill's provisions are narrower in scope because they apply only to 1987 crops that could not be planted because of poor weather in 1986.

I am disappointed the Congress chose not to broaden the "0-92" provisions at this time. However, I am encouraged that during the debate on the conference report, sponsors of H.R. 1157 expressed support for expanding a "paid diversion" concept and indicated that a broadened "0-92" proposal "has a lot of ramifications for the future." I intend to pursue these expressions of support and call upon the Congress to work with members of my administration to adopt not only a broadened "0-92" program, but the other commodity program reforms we have proposed.

I am opposed to the provision of H.R. 1157 that allows quality adjustments in the determination of losses caused by natural disasters with respect to upland cotton. To date, disaster payments have always been restricted to cases of reduced yield, or actual destruction, of crops—to losses of quantity, rather than quality. The Department of Agriculture has advised me that it does not collect the data necessary to implement this sort of assistance, and that the provision therefore poses the very real risk of substantial abuse. This particular provision is limited to cotton and modest in scope; it should not serve as a precedent for future programs of similar assistance, lest we open up new opportunities for fraudulent abuse. I am also opposed to the provision that could broaden the 1986 disaster payments program. The administration will continue to encourage farmers to purchase crop insurance as the only reliable means for insuring against natural disasters. Finally, I am opposed to a new price support program for sunflowers at a time when we are trying to reduce government involvement in the agricultural sector and all data indicates chronic overcapacity in the sunflower processing area.

However, I do recognize the efforts of the bill managers to limit the scope of H.R. 1157 by preventing the addition of numerous amendments that threatened to further encumber our efforts to reduce Federal intrusion on what should be marketplace decisions. I urge the Congress to demonstrate fiscal responsibility and restraint by defeating efforts currently underway that would tamper with the way in which advance deficiency payments are made for grain crops.

Despite my reservations, I am approving H.R. 1157 in recognition of the serious crop losses that many farmers have suffered in the past year. These setbacks, experienced by some of our farmers, call for special consideration of their problem. In doing so, I once again urge the Congress to consider carefully and act favorably on my farm reform proposals. The current farm programs have increased the annual costs to the taxpayer from $4 billion to over $27 billion in only 8 years, with continued Federal control over production. They have not worked. The reforms I have proposed will, over the long term, do much to improve the condition of rural America while reducing the deficit.