President signed new farm bill Monday

0
2

WASHINGTON – President George W. Bush signed the new farm bill Monday, May 13, after the U.S. Senate approved the conference report May 8 by a 64-35 vote.

The bill will apply to the 2002 crop.

Still tension. Sen. Tom Harkin, D-Iowa, said “all regions of the country benefit from the new farm bill, which is a testament to the balanced and fair approach we took in drafting the bill.”

Not so, said Indiana’s Richard Lugar, who called the farm bill “an attempt to respond politically to deeply felt economic issues in specific states and districts.”

“It’s an attempt, in a very closely divided Congress, to try to help individual Senators and House members,” the senior Republican on the Agriculture, Nutrition and Forestry Committee said.

The new $45.1 billion farm bill includes counter-cyclical income protection for producers (more help in bad years and less help in good years), an increased commitment to conservation, expanded nutrition assistance and assistance for rural development.

What about WTO? A University of Missouri think tank said the new bill poses a lower risk of violating world trade rules, as compared to proposals previously passed by the House and Senate.

But its 62 percent increase in crop subsidies would bring more land into production than under the current “Freedom to Farm” law, meaning larger crops and lower prices for grain and cotton, according to the Food and Agricultural Policy Research Institute.

The institute said the bill has a 19.3 percent chance of violating World Trade Organization limits this year on trade-distorting subsidies. Earlier this year, the think tank assigned a one-in-three chance to the Congressional measures.

The university economists said, relative to baseline, net outlays for commodity programs under the new bill increase by $49.7 billion over the next 10 years.

* The conservation title increases net spending for 10 years by $13.2 billion.

* Planted crop acreage is expected to increase only slightly in response to higher support prices. Increased grain and cotton acres more than offset reduced soybean acreage.

* The institute forecasts prices for grain and cotton will fall slightly with increased production; oilseed prices increase marginally.

* The new dairy payments result in a small increase in milk production, and lower milk prices.

* Net farm income goes up $3.8 billion per year, from provisions in the commodity programs. The conservation programs contribute another $700 million per year.

STAY INFORMED. SIGN UP!

Up-to-date agriculture news in your inbox!

NO COMMENTS