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$6.5 Billion in farm aid proposed
By Philip Brasher, AP Farm Writer, startribune.com
June 20, 2001
 
WASHINGTON (AP) -- Farmers would get $6.5 billion in special assistance this year, $1 billion more than the limit set by the White House, under legislation starting to move through Congress.

It would be the fourth multibillion-dollar bailout of the nation' s farm economy in as many years.

The bill the House Agriculture Committee was to consider Wednesday would provide $5.5 billion in payments to grain and cotton growers and an additional $1 billion divided among producers of everything from prunes to wool to tobacco.

In a letter to the committee last week, White House budget director Mitch Daniels said he would recommend President Bush " not sign a bill providing more than $5.5 billion in additional assistance" for this year' s crops.

But the committee' s Republican chairman, Larry Combest of Texas, says the White House budget office is " out of touch with the financial crisis farmers around the country are facing. Their recommendation is based on incomplete and unrealistic economic data."

Rep. John Boehner, R-Ohio, is expected to offer an amendment that would cap this year' s aid package to $5.5 billion. But Mary Kay Thatcher, a lobbyist for the American Farm Bureau Federation, expressed confidence Tuesday that Boehner would lose.

" Things are worse in the country this year than last, " she said.

Congress has provided $25 billion in special payments to farmers over the past three years to supplement federal subsidy programs, and farm groups have asked for as much as $10 billion more this year.

The first $5.5 billion in this year' s bill would supplement the annual " market transition" payments that grain and cotton farmers receive under an existing program.

Growers of soybeans, sunflowers and other oilseeds would receive an additional $500 million.

The bill also includes:

$220 million for the government to buy surplus fruits and vegetables, including apples, apricots, black-eyed peas, cherries, prunes, grapefruit, lentils, onions and potatoes.

$129 million for tobacco growers.

$57 million for peanut producers.

$44 million to suspend an assessment on this year' s sugar crop.

$40 million to expand eligibility for crop subsidies, known as " loan deficiency payments, " on grain and other crops.

Congress started passing the annual bailouts in 1998 after sluggish exports and bumper crops led to a collapse in prices for a wide array of commodities.

The Agriculture Department last month revised its estimate of net farm income for 2001 to $42.4 billion, up $1.1 billion from its January forecast, because of higher livestock prices. But farm groups say many producers can' t survive financially without additional aid this year to supplement existing subsidy programs. Production expenses, which include the cost of fuel and fertilizer, are expected to rise $3.6 billion this year, or 1.8 percent.

The bill is H.R. 2213.

On the Net:

House Committee on Agriculture: http://www.agriculture.house.gov