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UPDATE - White House wants scale-back in farm law costs
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USA: October 18, 2001


WASHINGTON - The White House wanted to limit the new U.S. farm support law to $25 billion over five years, far less than Congress envisioned, and it would support a phase-out of crop subsidies too, a key senator said yesterday.


Indiana Sen. Richard Lugar, the Republican leader on the Senate Agriculture Committee, proposed a revolutionary change in the U.S. farm program that would give producers an annual voucher, instead of open-ended federal crop subsidies.

Other farm-state lawmakers were trying to expand the federal safety net. The House has passed a $73.5 billion farm bill that would revive target prices as the way to funnel more money to growers if prices slump over the next decade.

By comparison, Lugar's bill would spend $25 billion, including about $1 billion a year in new spending on farm supports. Conservation would be doubled to $4 billion a year.

Written every few years, farm bills set U.S. policy for crop subsidies, conservation, public nutrition, exports and agricultural research.

UPHILL FOR LUGAR BILL?

Lugar's bill was given little chance of passage at a time when grain prices were in a four-year rut. The White House has criticized the House bill as unduly costly and old-fashioned when innovation was needed, but did not suggest a course.

White House budget director Mitch Daniels "has told me $25 billion" was the target for a farm bill, Lugar told reporters.

"I am pleased to have administration support for this bill," he said.

Agriculture Secretary Ann Veneman said in a statement Lugar's bill was consistent with administration goals. An aide said the administration was supporting Lugar while reserving the right to work with other lawmakers to achieve consensus.

"The administration believes it is unnecessary and unwise to undertake action on a farm bill in this wartime, national emergency environment," Veneman added.

Agriculture Committee chairman Tom Harkin, Iowa Democrat, has said he was asked by Senate Majority Leader Tom Daschle of South Dakota to wrap up work on a farm bill this year.

FARM BILL DRAFTING DELAYED

The committee was slated to begin work on its bill on Thursday but was forced to postpone the session while Senate buildings were checked for safety following an incident earlier in the week in which a letter containing anthrax was opened in the office of Senate Majority leader Tom Daschle.

Under Lugar's bill, crop supports would be phased out by 2006. In their place, farmers would receive a voucher, calculated at no more than 6 percent of average gross farm revenue, if they agreed to practice conservation and take steps to safeguard their income from crop disasters or low prices.

All crop and livestock producers making at least $20,000 from farming and who file tax returns as farmers - about 900,000 people - would be eligible for the program, not just grain, cotton and soybean growers.

The plan was similar to an unsuccessful Lugar risk-management proposal of two years ago. Senate Agriculture Committee members said this plan would fail too.

"I don't think it is going to be very popular," said Sen. Pat Roberts, Kansas Republican. North Dakota Democrat Kent Conrad said the Lugar plan "would be an unmitigated disaster for most of family-farm agriculture" because it would remove all agricultural price supports.

"I don't think he has the votes either," Harkin said.

GREEN GROUPS SEEK BIGGER PAYMENTS

The Environmental Working Group, which has argued for larger conservation programs, hailed Lugar's proposal to double outlays now running a bit below $2 billion a year.

Most of the increase would go to a Working Lands Environmental Improvement Option that would offer cost-share, incentive and bonus payments to producers who implement comprehensive stewardship programs that exceed their current level of conservation.

Participants would be chosen at the local level on the basis of who offered the most cost-effective approach.

Eight major farm groups wrote the Senate Agriculture Committee earlier this week suggesting it follow the House lead and raise crop subsidies by $49 billion over 10 years. The groups also urged the Senate panel to give conservation an additional $16 bill


Story by Charles Abbott


REUTERS NEWS SERVICE

Reuters



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18 OCT 2001
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