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EWG releases more payment numbers

But, once again, the EWG’s listing of raw USDA numbers with no explanation or background information appears to be raising more questions than it answers, according to farm bill observers.

EWG President Ken Cook gave reporters copies of a USDA printout of certificate proceeds during a speech to the North American Agricultural Journalists Association in Washington on Monday. The speech came the day before a House-Senate conference committee resumed its deliberations on a new farm bill.

Supporters of the Grassley-Dorgan payment limits amendment, which was based on earlier EWG postings of raw farm program payment data on the Internet, reportedly were citing the marketing certificate numbers as support for keeping their amendment in the farm bill.

“It’s just one more example of how contentious the debate over the Grassley amendment has become,” said the executive director of a farm organization that opposes the measure. “It gives them more ammunition and helps move the Grassley amendment from being just a poison pill to the guillotine for thousands of farmers.”

Unlike current law, the Grassley amendment would require that marketing certificates count against the $275,000 per farmer payment limit proposed by Sens. Charles Grassley, R-Iowa, and Byron Dorgan, D-N.D.

Opponents say the amendment would effectively end the use of commodity certificates, which help producers market their crops in times of extremely low prices. The latter, which have occurred with increasing regularity for row crop farmers, can mean that growers reach the $75,000 limit on marketing loan gains in the 1996 farm bill with much smaller acreages than when prices are high.

Opponents of the amendment also said the EWG’s numbers were misleading, especially for states like Mississippi, California, Texas and Arkansas, which were listed as having the highest certificate redemption values and marketing loan write-offs.

The EWG listing put Mississippi’s certificate redemption value at $963,113,876, as of April 1, the highest of any state. That included certificate redemption proceeds of $396,320,288 and marketing loan write-offs of $567,793,588.

“Mississippi is the home-state of the Staplcotn producer-owned cooperative,” said Chip Morgan, executive vice president of the Stoneville, Miss.-based Delta Council. “Staplcotn has members in eight states, so marketing certificates for members of Staplcotn from those other states are probably lumped in with Mississippi’s.”

California, home of the Calcot, Ltd., cooperative had a total of $460 million in marketing certificates, including $204 million in redemption proceeds and $256 million marketing loan write-offs. Texas, home of the Plains Cotton Cooperative, had $462 million in certificates, including $260 million in marketing loan write-offs. Arkansas, home of the Riceland Foods Inc., had $416 million in certificates and $212 million in write-offs.

Although cotton farmers and their cooperatives are the principal users of generic marketing certificates, soybean and rice producers may also use them if they exceed the current $150,000 limit on marketing loan gains.

Others noted that with last fall’s cotton prices dropping to 30-year lows of 28 cents per pound, or more than 31 cents per pound below the loan rate, many farmers had little choice but to request marketing loan certificates. The alternative would have been to receive 28 cents per pound for their crop or 37 cents per pound below the average U.S. cost of production.

The EWG’s Cook unveiled the latest numbers, which he obtained through a Freedom of Information Act request to USDA, while speaking to about 25 journalists at the National Press Club. The latter passed them on to representatives of farm organizations, including the American Farm Bureau Federation.

There were reports that Mary Kay Thatcher, the Farm Bureau’s vice president for Washington affairs, had distributed the information. Spokesman for the Farm Bureau denied the reports and said the numbers came from the Environmental Working Group.

“I don’t know how that got started,” said the AFBF’s Dave Lane, referring to the reports. “We certainly had nothing to do with originating the information, although one of our staff members obtained a copy from one of the reporters attending the meeting.”

The USDA recap showed that marketing certificates totaling $2.74 billion had been issued through the first six months of the fiscal year that began last Oct. 1. Marketing loan write-offs for the period totaled $1.5 billion.

“This is a boatload of money that has essentially been off the books,” the Wall Street Journal quoted Cook as saying. Cook has argued that the federal government should spend more money on conservation programs than increasing the funding for commodity programs.

Some Senate Democrats reportedly were saying the USDA numbers could mean even greater savings from the Grassley-Dorgan amendment, which has been scored by the Congressional Budget Office as reducing farm program by $1.38 billion over 10 years.

As the House-Senate conference committee resumed its deliberations on Tuesday, it quickly adopted a list of 219 items, which were resolved by committee staff members who continued to work on the differences between the House and Senate farm bills during Congress’ Easter recess.

But conference committee members just as quickly became embroiled in a debate on commodity loan rates, one of the biggest areas of divergence between the two versions of the farm bill.

Rep. Larry Combest, the chairman of the House Agriculture Committee and of the conference committee, proposed a 1 percent increase in loan rates from the House bill, which contains the loan rates found in current law.

Sen. Tom Harkin, chairman of the Senate Agriculture Committee, said the proposal was a “step in the right direction,” but indicated that the Senate members of the conference were still intent on raising loan rates in the final farm bill.

Asked to give the White House view on the issue, Charles Conner, special assistant to the president on agriculture, said administration officials continue to believe that the Senate bill’s higher loan rates would stimulate excess crop production and possibly leave farmers with a lower safety net if they fail to produce a crop.

“In that event, we’re concerned that producers will be right back here saying we need more, we need more, we need more.”

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