Brad Swenson Bemidji Pioneer
Published Sunday, February 24, 2008

As spring nears, farmers face uncertain prospects of what federal policies will guide production decisions.

A House-Senate conference committee has until March 15 to finalize a new federal farm bill, get it through Congress and have President Bush sign it — or permanent rules from 1938 and 1949 will fall into place.

And while U.S. Agriculture Committee Chairman Collin Peterson, DFL-7th District, offered a compromise more than a week ago, U.S. Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, returned with a proposal that is still more than $6 billion away from a bill that Bush won’t veto.

The new five-year farm bill is important to Minnesota, not only for its farm policies, but also for new funding for renewable energy research, forestry programs and its biggest expenditure — nutrition programs, such as food stamps and the Women-Infants-Children program.

“Collin’s been negotiating with the White House, and now the Senate coming in,” U.S. Sen. Amy Klobuchar, DFL-Minn., said in an interview before Congress took its current recess. The House and Senate passed differing versions, and both are veto targets for Bush.

“We had $5 billion in disaster relief, so the Senate’s trying to push to keep some of that in,” Klobuchar said.

That’s also important to U.S. Sen. Norm Coleman, R-Minn., as a permanent disaster fund is seen as taking politics out of the need to annually seek disaster aid.

“We are trying to move forward,” Coleman told Minnesota reporters also before the recess. “I really applaud Collin Peterson’s efforts, but the Senate has different perspectives and one is to include disaster funding.”

Both Klobuchar and Coleman are members of the U.S. Senate Agriculture Committee.

Bush has threatened to veto any farm bill that raises taxes to pay for it, with Peterson’s new proposal — developed with ranking Republican Rep. Bob Goodlatte of Virginia — adding $6 billion to the bill’s baseline funding, a figure Peterson believes Bush will accept.

The bill currently costs $286 billion over five years.

Part of the hang-up is in commodity spending, subsidies given to farmers when market prices fall below production. Although only about 15 percent of the farm bill’s spending, it’s the most contentious.

Peterson’s proposal would cap such aid to farmers with adjusted gross income of $900,000, with further restrictions for non-farmers. For those making less than two-thirds of their income on the farm, the income cap would slide from $500,000 in 2009 to $300,000 for 2013 and later years.

Klobuchar attempted to include a $750,000 income limit in the Senate version, and the White House is seeking a $200,000 cap.

“My bill was set at $750,000 after expenses and part-time farmers at $250,000,” Klobuchar said. “This version puts it at $900,000 and $300,000, so it’s close to my bill. He (Collin) has defended my work, because he knew it would end up around there.”

The Senate bill also had better milk program provisions and a higher sugar program loan rate, Klobuchar said. Peterson’s offer would keep the 2007 sugar loan rates.

“Those are things we will continue to fight for in negotiation,” Klobuchar said of the Senate version’s slight increase in the sugar loan rate. “The important thing is that, first of all, no one thought a bill would get through the Senate and it did, and now no one is expecting it to make any progress and it’s continuing to make progress.”

What’s frustrating, she said, is that the House and Senate are very close, “but clearly the White House has something else in mind that we’re going to have to negotiate with to get it through.”

Reverting back to the permanent rules is not an answer, she said, as the farm bill baseline will drastically be cut. And extending the 2002 Farm Bill would do the same.

Harkin, the Senate’s Ag Committee chairman, responded to Peterson’s offer with a plan that is $12.3 billion above the current farm bill baseline, which he called “spending that is not only critical for farmers and rural America, but also our nation as a whole.”

The Senate offer meets the needs of the farm bill without cutting investments in the Senate bill in renewable energy, conservation, nutrition, rural development and better diets and health for all Americans, Harkin said.

But Peterson, in his proposal, reiterates that the final bill has to be signed by Bush.

“The president has clearly stated that he will veto a farm bill that contains tax provisions; it is unrealistic to think otherwise,” Peterson said. “A presidential veto leaves us without a farm bill, which is not a good outcome for anyone.”

“We’re stuck because there’s no agreement on how much money to spend,” Peterson said on Capitol Hill earlier this month in announcing his and Goodlatte’s proposal. “There’s a way to write the bill that’s [only] $6 billion over the baseline. We want to show it can be done, we can write a bill.”

But farm groups are opposing that slim a margin, saying it does affect the safety net for farmers.

“The package that has been unveiled is able to spend only $6 billion over the baseline because it weakens the safety net for American farmers by $6.5 billion,” Tara Smith, American Farm Bureau Federation farm policy specialist, said in a statement reacting to negotiations. “That is not an attractive trade-off for American farmers.”

A coalition of 42 agriculture organizations, including the American Farm Bureau Federation, sent a letter to congressional ag leaders stating that the farm bill proposal is seriously under funded.

The letter notes baseline spending for the commodity title of the farm bill has already decreased by 60 percent. In addition, the letter states, “While the administration is demanding that a bill be written with only $6 billion in offsets, we believe that providing less than $12.5 billion in additional funding will require the farmer safety net to bear the unfair burden of paying for increases in spending in other areas of the bill.”

And, where is the administration?

While new U.S. Agriculture Secretary Ed Schafer remains optimistic an agreement can be found by March 15, the White House will hold firm to a bill that has no new tax revenues and that cuts farm subsidies.

“In a time of record strength, at a moment when we have no time to waste in developing farm policy, after the administration and the House took bipartisan steps toward compromise, simply put, the Senate has moved in the other direction,” Chuck Conner, depute secretary of agricutlure who is the lead negotiator for the administration, said Thursday at the department’s annual Agricultural Outlook Forum at Arlington, Va.

“I was encouraged by the proposals the House put forward last week,” he said, according to a USDA transcript. “I think they were reform-minded and would help bridge our differences in farm policy. The president, simply put, has said time and time again that he will not sign a bill that raises taxes and uses taxpayer dollars to increase the size of the government.”

The agricultural economy has robustly grown even since debate on the farm bill, he said, leading to his disappointment that the conference committee is considering a bill that is $16.5 billion to $22 billion more than the White House’s farm bill.

“A farm bill that proposes to increase government and raise taxes in this process, I will tell you … has very little chance of being successful.,” Conner said. “Our priorities for this legislation remain the same as ever. We want a strong safety net. I repeat, we want a strong safety net for our producers. We want a safety net that is efficient, effective, and one that further promotes $101 billion of agricultural exports.”

But, he said, a good safety net is not to use taxpayer dollars to provide income subsidy payments to anyone in America living anywhere, regardless of their financial status. Payments should not be made to part-time producers who don’t count on the farm to bring in their income.

With rapid changes in the agricultural economy, as commodity prices soar and livestock becomes restrained, and with new ventures in renewable energy from ag products, Conner said the White House seeks a new policy for a new era.

“It concerns me … that our farmers and ranchers could be constrained by legislation that was developed with an entire different farm economy in mind,” he said. “It’s a policy from another era. It’s not legislation that was customized for our industry anymore, and it’s not legislation that will help us move forward and be competitive for the years to come.”