Associated Press | July 16, 2001 | By DALE WETZEL, Associated Press Writer
A proposed overhaul of federal farm legislation provides subsidies for farmers if crop prices collapse, an element that Rep. Earl Pomeroy and state Agriculture Commissioner Roger Johnson said they welcomed.
Pomeroy and Johnson, however, said Monday they would push for changes in the structure of the assistance plan, which they said would make it less complex and more attuned to market conditions.
The House Agriculture Committee is considering the legislation, and released a summary of its principles last week. Any changes in the federal farm law will have to be approved by the House and Senate.
Committee legislators and Agriculture Secretary Ann Veneman have said they support provisions to keep farm income stable if commodity prices fall steeply. One of President George W. Bush's objectives, Veneman said, is having "a strong income safety net" as part of federal farm policy.
Pomeroy said the outline of the legislation was a good starting point. "All parties now acknowledge that a farm bill that does not have price protection at its core is a farm bill that cannot succeed for America's farmers," he said.
Pomeroy, Johnson and Robert Carlson, president of the North Dakota Farmers Union, said at a news conference Monday that the prospects for farm aid are more favorable than they were during the last farm policy overhaul five years ago.
One of the goals of the "Freedom to Farm" bill was to get rid of crop subsidies over several years, an approach that hurt farmers when prices fell, Pomeroy and Johnson said.
The Agriculture Committee's policy draft includes three separate payments that would shore up farm income, including payments that would be made regardless of whether a farmer actually grew a crop.
Pomeroy and Johnson said they favor an increase in marketing loan rates for certain crops instead. That strategy would benefit active farmers, and defray their production costs even if crop prices collapsed, they said.
Marketing loans allow farmers to borrow money against their crops at a set rate. Generally, they keep ownership of the crops and decide when to sell them. If the price is less than the amount borrowed, the government absorbs the difference.
Farmers are familiar with marketing loans and how they work, and raising loan rates would be a less cumbersome way of supporting farm income, Johnson said.
"It's clean. It's on every bushel that's produced. Everybody knows how it is calculated," Johnson said.Associated Press:
