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Farm bill agreement expected by mid-AprilBy Jennifer Bremer As the agriculture industry awaits a farm bill, time keeps ticking and the 2007 farm bill has now become the 2008 farm bill. Chip Conley, former staff economist for the House Agriculture Committee, told attendees to the 2008 Commodity Classic that he expects a likely agreement on the farm bill by mid-April. "The commodity titles are mostly the same, then there are some increases in target prices. For instance, corn is about the same, but there is a reduction in cotton target prices," he said. A large decrease of nearly $4 billion is expected in crop insurance, but an increase is expected in conservation, nutrition and energy. The Senate added a disaster provision and changes in the Conservation Reserve Program. Overall savings in the House version are $200 million with a $100 million savings in the Senate version. With the shifts in payments the President has threatened a veto of the bill, as he opposes the tax/revenue increases to fund increases in other areas, he opposes the $3 billion in CRP tax credits and he opposes the $9.8 billion in outlying shifts to cover all the areas. "Now the House and the administration are talking about what to do to make the farm bill become a reality," said Conley. The proposed House farm bill is a ten-year bill that would be extended through 2017. The House bill would eliminate tax increases and timing shifts. It returns to the 2007 loan rates and target prices. It puts a capacity limit of 32 million acres to CRP and makes changes in direct payments and EQIP spending. The 10-year spending total of the House bill totals $6 billion. In response, the Senate prefers a five-year bill and has a spending total of $12 billion. "The Senate Finance Committee will find offsets in non-controversial tax compliance initiatives," he said. "So the two are trying to come to an agreement somewhere between $6 and $12 billion." Conley said the Senate is not worried about a veto because there was a majority of support for the farm bill, but since the House only passed the bill 231-191, there is concern of a presidential veto. If the President would veto the farm bill, the House would need 291 votes to override the veto and pass the farm bill, and then there will be administration changes soon after the passage, which could make a difference as well. "The WTO, Brazil cotton case and Doha trade agreement along with the federal budget and tax issues could make a big impact on the farm bill or will be affected greatly by the results of the farm bill," he said. Conley said when cotton farmers are planning their 2008 crop they should know what to expect with the Brazilian cotton case, as far as knowing what the marketing loans will be and what tariffs will be on U.S. goods. He expects a new administration will help the Senate and House find middle ground as far as agriculture policy is concerned. "Spending cuts will likely include agriculture, but how deep a cut remains to be seen," he said. "If the administration thinks it will likely be overridden then they will likely not veto the farm bill," he said. Even though all crops want something different in the farm bill, change is expected in hopes to make all of agriculture pleased with the final bill. All of it involves some kind of change to increase spending. Jennifer Bremer can be reached by phone at 515-833-2120 or by e-mail at jbremermaj@hotmail.com. 3/24/08 Date: 3/19/08
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