Resolved: That the United States should substantially change its federal agricultural policy.

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Source: Feedstuffs, August 9, 1999 v71 i33 p1(2).

Title: Senate passes $7.5 billion in farm aid.
Author: Ed Maixner

Full Text COPYRIGHT 1999 Rural Press Limited

WASHINGTON, D.C. - Farm-state senators pitched - often in divergent directions - for emergency farm aid on the Senate floor for three days last week and managed to add $7.5 billion to the year 2000 agricultural appropriations bill for that purpose.

Senate and House conferees will meet in September to complete action on the spending bill.

As passed by the Senate, the farmer assistance package would boost total payments to farmers next year to near the record of $26 billion established in 1986.

The assistance would come in about eight forms, but Republicans and Democrats tended to agree on one concept: quick release. They want the money to go directly to farmers and with minimum administrative delays at the U.S. Department of Agriculture in cutting the checks.

That goal was apparently reached for much of the package. About $5.5 billion would be sent directly to farmers in a doubling of their Agricultural Market Transition Act (AMTA) payments - prescribed in the 1996 farm bill to phase out direct farm production subsidies.

Also apparently subject to quick delivery would be $400 million to subsidize crop insurance premiums (a 30% write down), $200 million to support cotton exports (Step 2) and a one-year increase in the per-farmer cap on commodity loan deficiency payments (LDPs). The $75,000 limit would be doubled.

Farm organization representatives said the secretary of agriculture would apparently be left to cook up recipes to distribute most of the rest:

* $322 million for dairy and meat animal producers;

* $134 million for "specialty crop" producers;

* $470 million for producers of soybeans and other oil crops, and

* $328 million for tobacco producers.

The Senate voted on four aid plans, including one bipartisan proposal by Sens. Charles Grassley (R., Iowa) and Kent Conrad (D., N.D.), priced at $8.8 billion.

Democrats had proposed $10.8 billion in aid and wanted to send the principal aid in the form of enlarged LDPs, saying that vehicle would pay only actual producers while some of the enlarged AMTA payments would go to absentee landlords.

"AMTA payments are based on what you grew in 1990 to 1995, and that might not be related to what you're growing today," said Tom Buis, head of government relations for the National Farmers Union, which generally supported the Democrats' proposals.

Also, the Democrats wanted $500 million for crop weather disaster payments, but Republicans said such payments can be considered by the conference committee in September.

Some fiscal conservatives in the Senate wondered why farm aid was even being considered.

Sen. Phil Gramm (R., Texas) pointed out that USDA economic analysts see overall farm income, farmer assets and farmer equity in farm property all rising this year and last, and farm debt falling again this year.

"Something about this picture doesn't fit," Gramm said. "We're engaged in a political bidding contest for the support of American agriculture."

Sen. Richard Lugar (R., Ind.), chair of the Senate Agriculture Committee, ultimately supported the farm aid but raised many of the same questions. With some agricultural production sectors doing well and others suffering financially, the Senate ought to more carefully target payments to producers who need them, he said.

In fact, Lugar held three hearings last week to do just that. He led off by quizzing Secretary of Agriculture Dan Glickman on his outlook. Glickman provided some conceptual suggestions for farmer aid, generally supporting his Democratic congressional counterparts, but avoided dollar amounts for all aspects.

Lugar wants to continue hearings in September on farm policy and federal spending, and other committee members agreed on that point.

At Lugar's hearings, Conrad and Sen. Rick Santorum (R., Pa.) both pointed to the increasing share of farm income from federal payments.

In the 1990s, annual net farm income has not varied greatly from the average: $45.7 billion. In large part that is because Congress has been taking up the slack. Sen. Pat Roberts (R., Kan.) pointed out that last week's emergency supplemental spending proposal will, when passed, be the 13th such farm aid bill in 10 years.

Conrad said, however, that farm income, when federal payments are discounted, show what has happened to farm commodity markets. Without federal dollars, farm income was $48 billion in 1996, $41 billion in 1997, $32 billion in 1998 and is projected at $27 billion this year.

Although what manner or degree of farm aid the House will agree to remains unknown, Senate Democrats will most likely push for additions.

The $7.5 billion package "has more holes than Swiss cheese," said Sen. Bob Kerrey (D., Neb.).

 
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