Congress has taken the first step on the road to a new farm bill with the House Agriculture Committee's passage of “The Agricultural Act of 2001.” By reporting the legislation on July 27, the committee laid claim to the funding reserved for agriculture in the 10-year budget resolution passed by Congress last spring, a concern given the dwindling surplus in the federal Treasury.
But the bill, which would provide farmers with a new counter-cyclical payment along with AMTA, loan deficiency and increased conservation compensation, still faces many hurdles.
Just how difficult the road could be was indicated by the response of a coalition of environmental groups to the farm bill concept paper released by Chairman Larry Combest and Rep. Charlie Stenholm, ranking minority member, before the committee adopted the new farm bill.
The coalition, which included Environmental Defense, American Farmland Trust and the Environmental Working Group, said Congress should shift half of all federal farm spending from crop subsidies to conservation programs.
Currently, less than 10 percent of those funds go to conservation programs, an Environmental Defense spokesman noted. He complained that the bulk of spending goes to a small number of states and that states with high percentages of specialty crops are left out of the programs.
Coalition members claim that North Dakota receives 27 cents in federal subsidies for every dollar of agricultural production, followed by Montana at 24 cents and Illinois and Louisiana at 18 cents. California and Pennsylvania reportedly receive 2 cents per dollar of production and Florida, 1 cent.
The committee also took flack from the National Grain and Feed Association, which urged the committee to back away from a proposal to increase the size of the Conservation Reserve Program from 36.4 million to 40 million acres.
The NGFA, which represents the nation's grain elevators, called the increase a shift toward “long-term supply control.” It argued that Congress instead should put money into programs that allow continued use of farmland under stewardship programs.
Testifying at a hearing, the NGFA urged the House Ag Committee to eliminate counter-cyclical payments, replacing them with tax-exempt Farm and Ranch Risk Management accounts.
The grain elevator group said the counter-cyclical plan probably would be viewed as market- and trade-distorting and thus be classed an “amber box” payment by the World Trade Organization.
Most commodity and farm organization threw their support behind the bill. But the National Farmers Union, a more-Midwest, populist-oriented organization, expressed disappointment, saying it failed to provide farmers with the tools needed to survive in today's economy.
Assuming the bill passes the intact — a big if, considering the waning influence of farm-state congressmen — the next stop will be the Senate Agriculture Committee whose chairman, Sen. Tom Harkin, D-Iowa, has said he favors a more conservation-oriented approach to farm legislation.
When the Senate Agriculture Committee reported its version of the fiscal 2001 disaster assistance bill last month, Harkin repeated his criticism of AMTA payments, saying he believes the AMTA mechanism contains serious inequities that should be changed in the next farm bill.
Such comments could mean that the Agricultural Act of 2001 could easily become the Act of 2002.