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Corn+Soybean Digest

At last! Farm bill deal in reach

WASHINGTON – After two years of marathon hearings, testy floor fights and extremely intense negotiating sessions, few would have blamed Reps. Larry Combest and Charlie Stenholm for indulging in a round of self-congratulations when they announced a tentative agreement for a new farm bill Friday.

Instead, Combest, the chairman of the House-Senate farm bill conference committee, seemed to sum up his and Stenholm’s low-key, self-effacing approach that finally prevailed over Senate efforts to turn the farm bill into a political issue with this comment to reporters: "I’ll tell you who wins – the American farmer."

While details of the agreement were sketchy – House-Senate conferees were waiting for the Congressional Budget Office (CBO) scoring of the compromise provisions – it appears that farmers, and especially row crop farmers, were the winners in the battle of wills over the farm bill.

Farm organizations paid tribute to Combest, chairman of the conference committee and the House Agriculture Committee, and Stenholm, the Ag Committee’s ranking minority member, for their wise, persistent guiding of the farm bill compromise.

"Mr. Combest and Mr. Stenholm are the ones who made this happen," said the executive director of one association. "Many people would have thrown up their hands and walked out for good weeks ago."

For soybeans, the loan rate would be set at $5.03 per bushel in 2002 and 2003, but would drop to $4.96 per bushel in 2004 through 2007 or the remaining life of the six-year farm bill. Soybean growers would receive an AMTA payment of 45 cents per bushel and a target price of $5.82.

The corn loan rate, which proved to be one of the most contentious issues of the conference, would be set at $1.98 per bushel in 2002 and 2003 and $1.95 for the remaining four years. The fixed payment for corn would be 30 cents per bushel and the target price $2.64 per bushel.

Midwest senators, led by Senate Majority Leader Tom Daschle and Sen. Tom Harkin of Iowa, the chairman of the Senate Ag Committee, had been pushing for a $2.02 corn loan rate. But, faced with the prospect of a collapse of the farm bill negotiations, they reportedly caved in to the pressure from House conferees for loan rates closer to House bill.

The conference agreement provision reportedly reduces the total limit on benefits to $360,000 per year, compared to $550,000 in the House bill and $275,000 in the Senate’s Grassley-Dorgan amendment. But it also retains the three-entity rule and allows producers to continue the use of generic certificates when they exceed the new limit on marketing loan gains.

The new limits would be set at $40,000 per person for fixed payments, $65,000 per person for counter-cyclical payments and $75,000 per person for marketing loan gains. It includes separate limits for peanuts.

The new language also imposes a $2.5 million adjusted gross income test.

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