Farm bill finalized for next six years

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WASHINGTON – The House and Senate farm bill conference committee reached agreement on a final framework April 26 – an accord that switches direction from the 1996 Freedom to Farm law.

“I think this shows what is possible when one puts the good of the country and the good of agriculture above politics,” said Rep. Larry Combest, R-Texas, who chaired the House and Senate negotiations.

“The winners in this are the American farmers.”

The bill now returns to both the House and Senate for approval before heading to the president for his signature. Its programs carry a price tag of approximately $73.5 billion over the next 10 years.

Conferees prepared to file the Conference Report Tuesday prior to a final farm bill vote that could occur in the House as early as today (May 2).

Some observers thought the two sides were too far apart to come to consensus in the conference committee, and even President George W. Bush last week urged the committee to complete its work.

Winners or losers. Senate Ag Committee Chairman Tom Harkin, D-Iowa, said the compromise bill isn’t exactly what either side wanted, “but it is a fair, bipartisan agreement that will restore prosperity to rural America and chart a new course for farm policy.”

Not so, said Sen. Dick Lugar, ranking Republican member of the Senate Ag Committee, who was quick to voice his disappointment.

“Most of the new spending will go to large commodity growers,” he claimed. “The bill will heighten incentives for farmers to overproduce as they seek to maximize the federal subsidies.”

“The need to reform U.S. agriculture policy is not a subject that excites the American public, the vast majority of which will pay for the subsidies and receive very little benefit,” Lugar said.

Key points. One of the hot potato issues, packer ownership of livestock, was dropped in favor of hearings on the issue of concentration by both the House and the Senate.

House negotiators caved into the Senate side on payment limitations, agreeing to a ceiling of $360,000 for total farm program payments.

But conferees stressed the payment programs will be made transparent. “We will know down the road exactly who gets what,” Harkin said. “Congress could decide to change that program based on that.”

The controversial, mandatory country-of-original labeling was included in the final conference version, which disappointed the National Pork Producers Council because it exempts pork’s biggest competitor, poultry. It covers fresh meat and hamburger, fruits and vegetables, peanuts and fish.

Better EQIP-ped. The new measure significantly increases conservation support through programs like the Environmental Quality Incentives Program, or EQIP. Although details are unclear, the farm bill could provide the EQIP program with up to $11 billion over the next 10 years.

The bill includes Harkin’s pet project, the Conservation Security Program, a voluntary, incentive-based program that rewards farmers for responsible land stewardship.

The bill also gives producers the option to update base acreage and payment yields in a stronger counter-cyclical program. It also includes higher loan rates for the first time since 1981. The rates will increase, then drop after the first two years. Corn, for example, will rise to $1.98 per bushel and decline to $1.95 per bushel.

Specific target prices cannot be announced until after the Congressional Budget Office conducts its scoring.

The new farm bill will be the first to include an energy title, which promotes the use and development of products produced with renewable energy.

Dairy program. If the farm bill is enacted, dairy farmers across the country will receive monthly payments – when fluid milk prices fall – nearly identical to what New England producers received under the Northeast Dairy Compact.

Like the compact, whenever the federal minimum price for fluid milk in Boston falls below $16.94 per hundred weight, participating dairy farmers will receive a payment. The national dairy program will pay producers 45 percent of the difference between $16.94 and the Class I fluid milk price in Boston.

Payments will be made on a monthly basis and will fluctuate with milk prices; no payments will be made when the fluid milk price in Boston is $16.94, or higher. Under this program, the USDA’s Commodity Credit Corporation, not milk processors, will make the payments.

According to Sen. Patrick Leahy, D-Vt., producers should begin receiving payments under this new national dairy program early this fall. USDA is required to begin signing up farmers to participate in the program no later than 60 days after the new farm bill is signed into law.

Producers will receive payments on a monthly basis: USDA is required to pay producers not later than 60 days after the end of each month for which a payment is made.

Retroactive. A significant feature of the new national dairy program is that it will be retroactive, covering market losses due to low prices since Dec. 1, 2001, according to Leahy.

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