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Farm Bill moves forward in Congress Sunday, Oct 28, 2007 By Aaron Sadler Stephens Washington Bureau WASHINGTON - As Congress moves closer to adoption of the 2007 Farm Bill, Arkansas farmers are preparing to fight again a decades-long battle over subsidy payments. The legislation to reauthorize the nation's agriculture programs advanced out of the Senate's agriculture committee last week and headed to the Senate floor, where a showdown along geographical lines is expected. Midwest senators are expected to try to reduce the amount of government money eligible to farmers. Southern lawmakers are opposed, contending that crops like cotton and rice are more costly to produce and deserve the funding. Arkansas Agriculture Secretary Richard Bell said Southern growers had sacrificed enough during negotiations for this year's version of the Farm Bill, which is typically renewed every five years. Both the House and Senate versions of the bill eliminate the "three-entity rule," which allowed for additional subsidy payments for farmers in business partnerships; and toughen income limits for payment eligibility. "I don't want to have any more concessions," said Bell, a former chairman of Riceland Foods, Inc., and former official at the U.S. Department of Agriculture. "We made concessions going through the House bill and I think that's as far as we need to go." Sen. Blanche Lincoln, D-Ark., has long said the government programs are necessary to make sure farmers stay solvent, food stays inexpensive and America competes in an increasingly competitive global marketplace. The government "safety net" to protect farm revenue keeps food safe, abundant and affordable, said Lincoln, an Agriculture Committee member. "We promised that we would come and look for real reform in the payment limitations ... something that could be real reform, but that our growers could live with," she said. "It is true reform, it is the most substantial reform that has been in the Farm Bill in decades." The House passed its version of the $290 billion legislation in July. The House and Senate bills must be reconciled before going to the president, who has said the measure is too costly. In addition to subsidies, the Farm Bill pays for billions in crop insurance, conservation and energy initiatives and nutrition programs. Food stamps and the federal school lunch programs are administered as part of the bill. The fight over subsidies has gone on through countless Farm Bill debates, Bell said. This year, lawmakers from states that depend on the subsidies thwarted a bid by Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, to redirect funding intended for subsidies into other agriculture programs. That sets up an effort by Sens. Chuck Grassley, R-Iowa, and Byron Dorgan, D-N.D., to limit annual payments to $250,000. The current payment cap is $365,000, based on three different grant and loan programs. Another proposal, by Sen. Richard Lugar, R-Ind., would set an across-the-board direct payment schedule for all farmers, regardless of crop, and would rely on insurance to compensate farmers for lost yield. Lugar said the existing subsidy system "distorts" market prices, thus violating international trade rules. "U.S. farm programs have cost taxpayers too much and hurt American agriculture in the process," Lugar said, adding that subsidy programs have ruined the family farm by creating an incentive for farm consolidation. Lincoln said this year's Farm Bill answers critics who complain that wealthy farmers obtain a windfall from the farm program. She fought a proposal by Sen. Amy Klobuchar, D-Minn., that would immediately cap annual gross income for people eligible for subsidies at $750,000. The current cap is $2 million. The Senate bill would phase a $750,000 income limit over several years. "Family farms don't just exist in other parts of the country," than Arkansas, Lincoln said, though the state's "family farms" may be larger ought of necessity to stay competitive, she said. The House bill is less restrictive than the Senate's on farmer payments, Bell said. He accused Midwestern lawmakers of being misguided when it comes to beneficiaries of farm subsidies. "Sen. Grassley, for example, doesn't seem to realize the amount of money going to his Iowa farmers under this ethanol program," Bell said. (The legislation includes funding for research and development of corn-based ethanol as fuel.) "It's not direct, but it's indirect. He talks about the subsidies the South gets, but he's not looking at the entire picture," Bell added. Harkin proposed, and the Senate bill includes, an optional, revenue-based subsidy program for farmers. Participants may opt out of other farm subsidies for the Average Crop Revenue program, which provides money based on acreage and state crop revenue prices. The plan would not benefit Arkansas farmers, Lincoln said. Officials with Arkansas Farm Bureau said the state's growers will not choose the alternative because it would cut direct payments. Additionally, both the Farm Bureau and Bell said they were concerned about the Senate's proposed reallocation of $7 billion from subsidies to other programs within the Farm Bill. "Sen. Harkin has put a lot of extraneous things in there he likes, but I'm not sure it fits well for Arkansas," Bell said. Two items of Arkansas interest that may emerge in the farm legislation involve fruits and vegetables, or specialty crops, and catfish, Bell said. Lawmakers are considering a measure to allow growers of specialty crops to collect subsidies as long as the products are used for canning. That could be lucrative to Northeast Arkansas farmers and Siloam Springs-based Allen Canning Company, he said. Those farmers have refused to farm vegetables for Allen in the past because they can make more money growing cotton. Another provision would put in place a USDA inspection system for production and processing of catfish. The inspections would be similar to those for beef, pork and poultry, Bell said. In addition, Lincoln sought in the bill a study by the USDA's chief economist to determine the benefits of animal waste as an energy source. The study would also measure the impact of applying laws that do not typically apply to agriculture to the industry. Lincoln's request is a direct result of her bid to prevent animal waste from being considered as hazardous material under the federal Superfund law. Environmental groups oppose the exemption. |
