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
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