Paraphrasing the late Robert Frost, congressional lawmakersstill have miles to go before putting finishing touches on thelong-awaited farm bill.
In addition to reconciling the House and Senate versions of thebill in Conference Committee, lawmakers also must turn out a finalbill that escapes President Bush's veto pen.
All things considered, the two bills, each crafted byDemocratic-controlled chambers, are not that different.
The House version of the bill contains a new fruit and vegetabletitle while the Senate version doesn't.
Both bills also propose changes in farm payment limits, thoughthe limits and timing of these payments vary.
The biggest difference between the House and Senate versions arereflected in commodity program payments, according to Jim Novak, anAlabama Cooperative Extension System economist and AuburnUniversity professor of agricultural economics.
The House and Senate version both propose options that theproducer can select in lieu of the current payment system, thoughthe Senate version is considered more far-reaching, Novak says.
The new Average Crop Revenue (ACR) Program proposed by theSenate would combine both direct and counter-cyclical programpayments. Farmers would have a choice between continuing to receivedirect and counter-cyclical program payments or the ACR program.Under the ACR they would receive a guaranteed minimum $15 per baseacre payment.
Moreover, during the 2010-12 crop years, a payment would betriggered if a crop's statewide farm revenue falls below thestate average.
Double dipping with the crop insurance program would not beallowed and the marketing loan program for these crops would beconverted to a recourse loan, meaning that the loan must be paidback and the crop redeemed.
Under the House plan, known as the Revenue Counter-CyclicalProgram, payments for a particular crop would be based on nationalrevenue for a crop year between 2009 and 2012 during which revenuefell below 90 percent of national average revenue, which alreadyhas been set by law.
For a producer, payment would be based on 85 percent of the baseacreage for eligible commodities. Under the House plan, directpayments and marketing loans would remain unaffected.
Would the House or Senate payment structure be more generous?That depends on how you look at it, Novak says.
While a revenue counter-cyclical program in general would bemore generous than the current program, the Senate version of theACR Program, which would be based on state revenue, could providemore risk protection. However, other considerations like the loanprogram and crop insurance would have to be factored into thepicture, he says.
One thing is certain: Payment limitations proposed under bothversions have re-energized debate about the future direction offarm policy.
Both bills eliminate payment limits on the marketing loanprogram, while retaining changes in direct and counter-cyclicalprogram payment limits.
Currently, farmers with adjusted gross incomes of $2.5 millionare eligible to receive commodity payments. However, under theSenate version of the farm bill, payment limitations eventuallywould be lowered to $1 million in 2009 and to $750,000 by 2010,except for growers for whom 67 percent of gross income is derivedfrom farming.
The House version would impose a $1 million cap on adjustedgross income with no exceptions and a $500,000 cap unless more than67 percent from of income was derived from farming.
Some evidence of Iowa Senator Tom Harkins intense lobbying fornew conservation measures is reflected in the Senate version of thebill. However, based on his observations of the ensuing farm billdebate, Novak says the level of commitment reflected in the Senateversion falls below what some lawmakers would have preferred, Novaksays.
It's still an open question what version eventually willemerge as the final bill.
A lot of this will depend on who makes up the ConferenceCommittee, Novak says.
But even after a consensus bill emerges, there is no guaranteeit will pass muster with President Bush.
"The big issue, I believe, with the Bush administrationinvolves payment limits and a tax provision, which they may or maynot be able to live with after the final version is drafted,"Novak says.
Budgetary considerations currently are governed by apay-as-you-go system whereby authorizations to spend money mustmeet budget baseline limits.
To support the legislation, some lawmakers hoped to raiseadditional funds by imposing taxes on foreign corporations thatpreviously do not pay taxes -- a measure Bush vowed to opposewith a farm bill veto.
In the end, this tax proposal may be rescinded, Novak says. Butthis may also force lawmakers to forego funding for newconservation provisions and other measures outlined in the twobills.
Curiously, the long-running World Trade Organization disputewith Brazil and five West African nations over cotton subsidies wasnot addressed in the bill, although this issue ultimately couldhave far-reaching effects on U.S. farm policy.
"The prevailing view among lawmakers seems to be that weshouldn't do anything and use what we currently have as abargaining chip in future negotiations," Novak says.Southeast Farm Press
