House Agriculture Committee Chairman Collin Peterson has taken charge of the initial farm bill conference negotiations with the Bush administration, meeting five times since Christmas with Acting Agriculture Secretary Chuck Conner, the Minnesota Democrat said in an interview.
"We needed to get at this sooner rather than later," Peterson said. He added that Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, "seemed to be comfortable with me working on this."
Harkin will chair the conference, but is traveling in western Africa this week on a trip focused on his longtime interest in child labor abuse in cocoa production. "We know where Tom's interest is," Peterson said. He also noted that he has learned to keep in mind "what is important" to Senate Finance Chairman Baucus and other key farm bill senators.
Peterson said the "tenor" of the negotiations has been very good. "Conner has been at every meeting," Peterson said. "I think Chuck and I are being very frank with each other. The administration obviously wants to get a bill they can sign; we want a bill they can sign. We want to avoid a veto. It might mean we would not get a bill."
A spokesman for Conner confirmed that the discussions were taking place, but said Conner would not comment on the specifics of the negotiations. "His reactions are being shared only during those conversations," the spokesman said.
The administration's priorities, Peterson said, are farm bill reform by lowering the income levels of individuals who can get farm subsidies and avoiding tax increases to pay for the bill. Conner has repeatedly said the administration considers the tax measures that the House and the Senate have used to pay for increases in the farm bill to be tax increases. Congressional Democrats have said the measures close loopholes.
Under current law, farmers and landowners with adjusted gross incomes over $2.5 million per year are not supposed to get farm subsidies. The House and Senate bills would lower those eligibility levels, but critics say both bills contain many loopholes. The administration's insistence on lowering the adjusted gross income levels further "has the Southerners stirred up," Peterson said. "They thought they had won the payment limit battle. I don't think there is any way you can override a veto on payment limits."
But Peterson said he believes there are ways to restrict payments without damaging the interests of active farmers. He said he and Conner and his staff have discussed changing the definition of a farm and harmonizing the income restrictions on production subsidies and conservation payments. Peterson said they also plan to address the issue that some individuals are claiming to be "actively engaged" in farming, but also claiming that farm subsidies are rental payments rather than earned income and avoiding paying self-employment taxes on the subsidies.
Tougher payment limits, Peterson said, are mostly going to affect people who are not farmers. While the administration has noted that lowering the adjusted gross income limit for farm subsidies to $200,000 would affect 38,000 individuals, Peterson said 23,000 of the 38,000 are individuals whose $200,000-or-higher adjusted gross incomes come from non-farm sources. That means only 15,000 active farmers, who get most of their income from farming, would be affected by the $200,000 cap.
Peterson said that the Bush administration seems to have accepted that both the House and Senate bills increase loan rates on crops. He also said that Conner has only once brought up the administration's objections to the continuation of the sugar program and changes in it. Peterson's district is the biggest sugar beet district in the country. Senate Budget Committee Chairman Kent Conrad, D-N.D., another key farm bill negotiator, is also protective of the sugar beet industry in the eastern part of his state next to Peterson's district.
Peterson said that it is unclear whether the White House will consider any funding source that raises additional revenue, but that he has told Conner that if the administration gets its farm-bill reform, it should consider allowing increased funding to pay for more spending on nutrition and fruits and vegetables. Peterson said his staff's analysis shows that the administration proposal would have increased nutrition and fruits and vegetables by $600 million over 10 years, while the House bill increases those programs by $11.1 billion. Peterson said he has told administration officials that its $600 million proposal for those key programs would not pass either the House or the Senate.
"There is a big gap here that we don't know how to bridge," he concluded.DTNAg
