Ag committees appear close to deal on farm bill

By JERRY HAGSTROM

For the Capital Press

WASHINGTON -- Congressional ag leaders appeared close Wednesday to finishing a farm bill proposal, but issues surrounding its cost, disagreements between commodity producers, and its trade ramifications still needed to be settled.

The House and Senate ag committees are working in private to produce a five-year farm bill proposal that will be submitted to the super committee on deficit reduction as part of that body's effort to trim $1.5 trillion in federal spending over 10 years. The ag leaders have agreed to cut $23 billion from USDA programs over that period.

The super committee, created by legislation this summer increasing the U.S. debt limit, has to vote on a deficit reduction package by Nov. 23. The full House and Senate has to vote on that package by Dec. 23, or face mandatory across-the-board cuts to all programs.

The farm committees' leaders appear to have settled on eliminating or phasing out the direct payments that crop producers get whether prices are high or low and creating one program to protect corn, soybean and wheat growers from losses not covered by crop insurance and separate programs for cotton, rice and peanuts.

The proposal is expected to be a full farm bill, with an extension of the food stamp program, conservation programs and titles to benefit dairy producers, fruit and vegetable growers and firms involved in renewable energy production. But there will be $13 billion in cuts to commodity programs, $6 billion in cuts to conservation and $4 billion in nutrition.

House Agriculture Committee ranking member Collin Peterson, D-Minn., told reporters on Nov. 15 that the Congressional Budget Office had determined the commodity title, which that benefits farmers directly, costs too much while other programs were within budget.

That didn't mean commodity group leaders were in agreement.

Commodity groups representing cotton, rice, peanuts and grain sorghum farmers -- the so-called southern growers -- issued a news release on Nov. 14 urging the development of a farm bill "that maintains equity among all of U.S. agriculture" and urging the farm leaders "to be mindful of the potential imbalance and disproportionate effects of payment limits."

Those groups expressed concern that crops that have not used crop insurance as much as growers of corn, soybean and wheat producers would not get a fair shake when direct payments are reduced or eliminated.

The same day, groups representing soybean, wheat, barley, corn, sunflower, canola and dry pea and lentil growers sent congressional farm leaders a letter that they wanted a revenue program based on crop data from individual farms and are worried that a program to increase target prices being pushed by some southern growers will distort planting decisions.

Meanwhile, USDA Chief Economist Joe Glauber said Nov. 14 at a seminar that most of the programs under consideration would be likely to be categorized as trade-distorting under WTO rules.

Commodity prices have been so high and price-related subsidy payments have been so low that the United States is way below its allowed level of $19.6 billion per year in trade-distorting subsidies, Glauber said. Tying program payments to actual losses would raise the potential for higher outlays under trade distorting payments in the future, he said.

He also noted that agriculture committee staffers working on the new bill have been very conscious of the WTO implications of the proposals and have frequently sought his opinion on them.

What kind of payment limits might be applied to the new program remained unclear. There was a possibility that the current annual limits on how much any one farm operation can receive in subsidies would be eliminated. The Environmental Working Group said the possibility of high subsidies if prices go down and no payment limits meant the secretive process of developing this farm bill had gone "from bad to medieval."

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