By Jerry Hagstrom.
WASHINGTON D.C. (DTN)--Senate Agriculture Committee Chairman Tom Harkin, D-IA, and Senate Agriculture Committee ranking member Richard Lugar, R-IN, made basic presentations of their very different farm bills Nov. 6 and then engaged other members of the committee in discussions that revealed the differences that will have to be addressed if they are going to get a new farm bill out of committee.
In a presentation of his chairman's mark, Harkin noted that under the House-passed bill, farmers would bring their acreages up to date, but that under his bill, they would also update yields. Harkin also said his program to provide income supports when crop prices are low, which is known in agricultural circles as a countercyclical program, would be based on both price and yield while the House bill is based only on price. He also pointed out that his program of conservation payments will reward farmers for good conservation practices in which they already engage rather than requiring them to start new practices.
Harkin also pointed out that his credit title deals with the problem of shared appreciation agreements. Years ago farmers who got loans from the government agreed to let the government share in the value of the sale of the land. Some of those farmers with loans coming due are finding that they still have cash flow problems, but that the land has risen in value.
The provision would allow the farmers to agree to a 25-year agricultural easement on their farms in exchange for forgiveness of the recapture amount in the loan. Under the agreement, farmers would not be allowed to sell the land for nonagricultural development purposes, Harkin said.
Lugar, who has introduced a farm bill that would replace current farm programs with an income guarantee program, started off his presentation by saying he would "not try to best" Harkin's arguments.
Of the view of Senate Budget Committee Chairman Kent Conrad's, D-ND, view that it is necessary to preserve the money for agriculture in the fiscal 2002 budget resolution, Lugar said he is "not sure" where the money is now. Lugar repeated previous statements that he is afraid the Harkin plan will follow current law in promoting overproduction, lower commodity prices and land values higher than market levels. Lugar acknowledged that Harkin "might argue" that "we are so far down the trail on land values that to change is to risk" lowering land values--and that such action would be "bad news for all who own land, especially for those who own a great deal." Lugar also warned that without major changes in farm policy, members might still come to the Appropriations committees asking for further bailouts for farmers.
Lugar also questioned the mandatory funding for the international school lunch program named after former Sens. Bob Dole, R-KS, and George McGovern, D-SD. Lugar said he couldn't figure out how the program will be administered and believes it would be better to start the program with discretionary spending.
Lugar also noted that Harkin has included a provision that defines exchange rate manipulation as an unfair trade practice and uses the Export Enhancement Program to respond to it. Lugar said he did not understand how that program would work.
Both Harkin and Lugar acknowledged that they have differences over the rural development title, which has two major grant programs for helping businesses in rural America. Harkin's mark would create a National Rural Cooperative and Business Equity Fund and also a small loan program modeled on a Small Business administration program. Lugar said he was much more comfortable with the SBA proposal than the equity fund.
Of Harkin's title to address competition in agriculture, Lugar said, "I have my doubts about the usefulness of this."
He noted that the Bush administration's agricultural policy books says past farm programs have led to concentration. "How we reverse that has never been clear," Lugar said, adding that "intrusive measures are unlikely to be effective."
Of the Bush administration's involvement in the farm bill, Lugar said, it "may have been slow, they may not have been timely, but it is still there" and later suggested that the committee might want to consider adopting his proposal or the $21.7 billion in additional spending endorsed by OMB Director Mitch Daniels some weeks ago.
Beginning the discussion by other members, Senate Agriculture Appropriations Subcommittee ranking member Thad Cochran, R-MS, said the senators should consider to what extent the bill creates new entitlements in rural development and other areas and suggested that they might instead consider making the Women, Infants' and Children's feeding program mandatory spending.
The House "underfunded" the WIC program by $150 million in the FY02 Agriculture appropriations bill, Cochran said, in order to pay for projects for individual House members. The appropriations are having difficulty filling the gap in the ongoing conference process, Cochran said.
Sen. Peter Fitzgerald, R-IL, said he would not worry about waiting until next year to write the bill. He said he was also worried about "overstimulating" the most productive farms.
Sen. Paul Wellstone, D-MN, said the $6.2 billion increase in nutrition spending that Harkin proposed should be "a bottom line" due to the economic crisis facing many low income Americans.