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House outlines 2007 farm bill

If the U.S. House of Representatives Agricultural Committee’s outline for the 2007 farm bill provides any clue as to the shape of the next farm bill, farmers are in store for relatively few surprises, according to one expert.

“The House outline pretty much looks like 2002,” says Jim Novak, an Alabama Cooperative Extension System economist and Auburn University Professor of agricultural economics, referring to the current farm bill, which was passed in 2002.

Even so, Novak cautions that these proposals represent only one branch of Congress and the Senate still has to weigh in with its own version.

While there is some indication of what is being discussed in the Senate, Novak says there is still no way of knowing for certain what will and will not be included in its final version of the farm bill.

“Anything you see here can change,” Novak says. “This really is a kind of trial balloon — you send it up and see what happens.”

Moreover, he stresses that any differences between the House and Senate versions of the bills will have to be ironed out in Conference Committee.

One interesting feature in the House version is that it does not call for a reduction in payment limits, “despite all the rhetoric,” Novak says. On the other hand, it does call for an attribution of payments,” which seems to restrict an individual from receiving multiple separate payments, he says.

“That’s not to say the Senate won’t come up with its own limits,” Novak says.

One item conspicuously absent in the House version is a provision to support fruit and vegetable production on base acres. Novak says this isn’t surprising given the lingering uncertainty over the ongoing World Trade Organization negotiations.

“Some in Congress have expressed the opinion we should wait, that we shouldn’t make any radical changes in these sorts of provisions until WTO negotiations are settled,” he says.

While it’s possible the House may come up with a finalized version of the 2007 farm bill by September, Novak says it may be as late as next year before the legislation finally takes definite shape.

“That’s not unusual, it’s happened before, and the likely scenario is that they would continue temporarily with the 2002 farm bill,” he says.

Novak expects a well-funded energy title will be included in the farm bill, though he cautions that this likely will be heavily affected by fiscal concerns.

Fiscal concerns also may prompt reductions in farm payments — something that already is under active discussion. A House proposal calls for limiting direct and counter-cyclical payments associated with the peanut program to 74 percent of base acreage.

Under the House-proposed commodity title, a reduction of the 85-percent Direct Payment rate is being considered. Fiscal considerations will determine how much this percentage is reduced, Novak says.

The reduction is being considered to allow an increase in target prices and loan rates, except in the case of select commodities, he says. The upland cotton target price and loan rate are being lowered 2 cents a pound.

Novak predicts there will be no radical departure from the types of conservation provisions included in the current farm bill and that there likely will be more funding for conservation measures.

“I just think that’s inevitable,” he says.

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