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Farm bill proposal unveiled
By Jerry Hagstrom, Special to Agweek
July 17, 2001
 
WASHINGTON -- House Agriculture Committee Chairman Larry Combest, R-Texas, July 12 released an outline of his farm bill proposal that would break from the 1996 Freedom to Farm bill to re-establish the old goal of target prices on crops, eliminate the marketing assessments on sugar and increase spending on trade promotion and conservation.

Combest also announced that he would begin holding hearings on the proposal -- known formally as the chairman's mark -- July 17, that the committee would "mark up" -- meaning finalize -- the bill starting July 26 and that the committee would complete the bill by Aug. 2.

"We may be here every night all night. We're going to get a farm bill reported out," Combest told reporters. Combest said he believes both the House and the Senate will finish the farm bill in 2001. House Agriculture Committee ranking member Charles Stenholm, D-Texas, appeared with Combest at a news conference and said the committee intends to listen to all critics who want to refine its provisions. Committee staffers held briefings July 12 for members, lobbyists and the Bush administration. Combest said he had invited Bush administration USDA officials to testify July 17, but believes they will not be ready.

The bill fulfills the demands of farm groups to re-establish countercylical payments to farmers when prices are low, but it also maintains planting flexibility and the fixed decoupled payments at the 2002 levels and establishes those payments for oilseed producers.

It also continues marketing loans at the same levels in the 1996 bill for all crops except for soybeans, on which the loan rate would be reduced from $5.26 to $4.92. The program appears to give the soybean producers the 34 cents they lose in marketing loan gains in countercyclical payments, but John Gordley, a lobbyist for the American Soybean Association, said he would not make a statement on the proposal until he has analyzed it and spoken with his board. The loan rate on wheat would stay at $2.58.

Most other farm lobbyists also declined to take a position until they had consulted with their elected leaders. Asked by a reporter if it would be wrong to write the new bill means that Freedom to Farm was an experiment that has failed, Stenholm said "No." Freedom to Farm, which was supposed to be a transition to the free markets, didn't work, Stenholm said, because "the world didn't change as we anticipated it would. Freedom to Farm makes great speeches, but it's difficult to do when farmers have to pay their bills." Stenholm also said future farm policy has to deal with currency exchange rates.

But Neal Gillen, a lobbyist with the American Cotton Shippers Association, said he said the bill should be regarded as "Freedom to Farm enhanced" and that Combest should be praised for having the courage not to raise loan rates, but bring the soybean rate down. Some economists believe the higher loan rates lead to market distortions, but other leaders such as National Farmers Union President Leland Swenson say higher loan rates would put money in the hands of the farmers who produce the crops.

Sugar lobbyists initially indicated disappointment that the bill did not make any changes in the sugar program other than eliminating the marketing assessment, which costs them $440 million per year, but Jack Roney of the American Sugar Alliance said committee staffers assured the lobbyists that no costs provisions could be added to the bill during the coming weeks.

Under the countercylical program, producers of program crops -- wheat, corn, sorghum, barley, oats, upland cotton, rice, soybeans and minor oilseeds -- would receive a payment when a crop's price, adjusted for the fixed payment, is below target prices acres. Target prices were left at the 1995 levels except for soybeans and minor oilseeds, which did not have a target price in 1995. The soybean target price was set at $5.76.

Countercylical payments would be based not a farmer's current production, but on the farmer's acreage base and yields that already are established in records at Farm Service Agency offices. Farmers would have the option of updating their acreage bases, but not the yields.

Farmers would be eligible for three different payments each year if prices were bad: the fixed, decoupled payment, the countercylical payment and the marketing loan. Countercyclical payments would be limited to $75,000 per producer per year.

The bill would cost $168 billion over 10 years, including the $73.5 billion provided in the congressional budget resolution for additional farm spending. Of the $73.5 billion, $48.9 billion goes to commodity programs, but the bill outline includes all the traditional farm bill titles including a nutrition title that provides a $2 billion increase in the food stamp program over 10 years. The outline says the bill would simplify the food stamp program, but it does not mention restoration of food stamp benefits to legal immigrants, a key goal of anti-hunger advocates.

The bill conservation spending by $15.05 billion, or 75 percent over baseline, of which $10.3 billion would go to the EQIP program used mostly by livestock producers and $1.4 billion would increase in the land-idling Conservation Reserve Program from 36.4 million to 40 million acres.

The bill also reauthorizes trade promotion programs, including the Export Enhancement Program used in the past to sell wheat and the Foreign Market Development Program, but does not give them any additional money. The bill does double the funding for the market access program used by producers of value-added products by $900 million and provides $100 million more in transportation money for food aid.

The bill does nothing for specialty crop producers such as fruit and vegetable producers, who have said they are in dire straits. Combest said that specialty crop producers had gone to the House Appropriations Committee rather than the authorizing committee for aid. The bill also extends the milk price support program for 10 years at $9.90 per cwt, provides $700 million for agriculture research and $100 million for broadband Internet direct loans.