Holding on to “the most generous and most significant farm bill since the Great Depression” may depend on budgets constraints, world trade organization negotiations and potential for escalating government costs, says Neal P. Gillen, American Cotton Shippers Association vice president and general counsel.
Gillen, speaking at the annual west Texas flow/marketing meeting recently in Lubbock, Texas, praised two Texas legislators who helped craft the bill and move it through the U.S. House of Representatives.
He said Congressmen Larry Combest, a Republican, and Charlie Stenholm, a Democrat, spent more than two years gathering information from farmers across the country to gauge the depth of the farm recession and to begin devising a program to restore profitability to the farm sector.
The final bill was “a bipartisan effort,” Gillen said. He also noted that the bill has strong support from farmers and farm groups. “Farmers do not like the Senate proposals.”
Gillen said key advantages to the House bill include:
- Retained three-step program.
- Retained the marketing loan.
- Set a 6.67-cents-per-pound AMTA payment.
- A countercyclical payment will kick in when prices are low.
- Farmers do not have to plant cotton to receive the AMTA.
“Some members of the Senate support the House bill,” Gillen said.
Others have different proposals. “Sen. Tom Harkin, D-Iowa, and chairman of the Senate Agriculture Committee) wants a five-year bill with a phase-out of AMTA. It also would expand conservation payments and establish countercyclical payments on a 1995-to-2000 base. Allocations also would be made by state instead of crop.
“It would be a good program for Iowa,” Gillen said.
He said Sen. Richard Lugar, R-Ind., ranking member of the committee, proposes a $25 billion farm program over five years. “His proposal would eliminate the marketing loan after 2005 and the AMTA after 2002,” Gillen said.
“I don't think the final Senate version will differ significantly from the House bill,” Gillen said. “They are concerned about high loan rates and allocating funds by state is too controversial. Also, the marketing loan is too popular to drop. That originated in the Senate.”
Gillen says he sees little support to drop AMTA. “A phase-out might be possible, but there is too much at stake to veer suddenly in a new direction.”
Changing economics, however, could alter budget priorities. “Negotiations with the WTO could have an effect, but I think Combest will hold the line.”
He said the Bush administration would have little impact on the farm bill. “The administration brought too little too late,” he said. “There is no place at the table at this point.”
Low prices for all program commodities also create concern. “Is it responsible to continue to overproduce in an oversupplied market? Government costs will skyrocket and acreage reductions will become necessary.”
Gillen said Congress could restore the authority to employ the payment-in-kind (PIK) program used in 1982.
“He said the Senate could approve a farm bill by late November or December. “There is pressure on the Senate to act. Next year is an election year and Sen. Harkin's home state, Iowa, is a big recipient of government (farm) payments.”