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Peterson farm bill proposal limits new funding to $6 billion

House Agriculture Committee Chairman Collin Peterson said he and the committee’s ranking member have developed a farm bill with only $6 billion in new spending that President Bush will sign.

Peterson, D-Minn., and Rep. Bob Goodlatte, R-Va., said the new approach is needed so a House-Senate committee can complete a farm bill conference report, have it pass both houses of Congress and be signed by the president before an extension of the current farm law expires March 15.

But major farm organizations say the Peterson-Goodlatte proposal is “seriously under-funded,” and contains provisions supported by the administration that were previously rejected by the House and Senate agriculture committees.

“The Commodity Title has already experienced a 60-percent decrease in baseline spending,” a coalition of the nation’s farm groups said in a letter to Peterson, Goodlatte and Sens. Tom Harkin, D-Iowa, and Saxby Chambliss, R-Ga., chairman and ranking member of the Senate Ag Committee Thursday (Feb. 14).

“While the administration is demanding that a bill be written with only $6 billion in offsets, we believe that providing less than $12.5 billion in additional funding will require the farmer safety net to bear the unfair burden of paying for increases in spending in other areas of the bill.”

Agriculture Secretary Ed Schafer told a House Agriculture Appropriations Subcommittee hearing the Peterson proposal’s funding limits “represent the real reform sought by the administration. They rightfully took the president’s concern seriously, and the outline was developed in an effort to reach fiscal responsibility.”

Harkin said he welcomed the House Agriculture Committee’s efforts to develop a new spending outline for the farm bill but indicated Senate members of the conference committee would reserve judgment on it.

“This outline is provided as a basis for further collaborative work and negotiation, and that’s the spirit in which it should be received and judged here in the Senate, where we, of course, have our own perspectives,” Harkin said.

Several senators, including Max Baucus, chairman of the Senate Finance Committee, said the Peterson proposal’s omission of a permanent disaster program and shortchanging of other areas meanthey could not support the new plan.

Farm group leaders said the House Agriculture Committee, which approved the plan, seemed to be capitulating to the White House for the sake of getting a bill by March 15 after initially ignoring most of the administration’s farm bill recommendations when the House passed its farm bill last July.

“While I give credit to Chairman Peterson and Ranking Member Goodlatte for getting the conference process started,” said National Farmers Union President Tom Buis, “the funding levels in their proposal are inadequate to address the challenges in rural America.

“The problem from the beginning has been the White House’s reluctance to provide adequate funding to address the challenges in rural America, including vital nutrition, conservation, renewable energy and other farm bill programs.”

Buis said the NFU remains committed to securing adequate funding to complete a new farm bill that includes a permanent disaster program, a strong safety net, a comprehensive competition title, and other NFU priority issues.

Peterson said senators and farm group leaders should not take the proposal as the last word on the farm bill, which members of his committee have been working for nearly two years to write.

“This is not a take it or leave it offer, but an effort to jump start the process,” he told reporters, adding that House members who have been negotiating with administration officials need to have a spending target by Friday (Feb. 15) so the House-Senate conference committee could complete its work by the end of February.

“This framework demonstrates we can produce a farm bill in conference that preserves the safety net for farmers and ranchers, includes reforms and contains critical funding for conservation, nutrition, specialty crop, energy, research and livestock the president can sign.”

Among the Peterson-Goodlatte proposal highlights:

• Retains the 2007 target prices for all crops (including cotton).

• Provides a counter-cyclical revenue option based on the administration’s revenue proposal, which would trigger payments when prices and yields drop below national averages.

• Eliminates direct payments for 2016, restoring them in 2017 to protect the baseline for those payments.

• Maintains the 2007 loan rates for most crops

• Retains most 2007 cotton loan provisions, thus eliminating a 14-point marketing loan improvement package the National Cotton Council had included in the House-passed bill.

• Eliminates economic adjustment assistance for domestic cotton mills.

• Incorporates the administration’s beneficial interest proposal.

• Establishes new Adjusted Gross Income limits. Provides a “hard cap;” that is, no payment if AGI is greater than $900,000. Under a “soft cap,” unless 66.66 percent of AGI is from farm-related income, no payments would be made if the AGI is greater than $500,000 for 2009, $450,000 for 2010, $400,000 for 2011, $350,000 for 2012, and $300,000 for 2013 and later years. (The House-passed farm bill includes a $1 million hard cap; the Senate bill, $750,000 while the administration has been pushing for a $200,000 AGI limit.)

• Uses Senate definitions of farm-related income.

• No timing shifts.

Under the farm bill’s conservation title, the proposal:

• Establishes a 32-million-acre total CRP cap (including continuous and CREP signups) beginning Oct. 1, 2009. No new general signups would be conducted before Oct. 1, 2009. Continuous and CREP signups will continue.

• Adds 200,000 acres per year to the Wetlands Reserve Program for fiscal 2008 through 2012.

• Restores funding for the Conservation Security Program to baseline levels.

• Ramps up spending for the Conservation Security Program from $1.3 billion per year to $1.9 billion per year for FY 2012 forward

In other areas, the proposal:

• Includes provisions to spend a combined $9 billion in outlays from fiscal 2008-17 for nutrition programs and the McGovern-Dole program.

• Adopts Senate provision that eliminates mandatory funding for research and provides for an authorization of appropriations for Initiative for Future Agriculture and Food Systems.

• Modifies House farm bill provisions to reduce spending on energy programs to the Senate’s $1.1 billion in outlays over fiscal 2008-17.

• Adds provisions for USDA to develop regulations for a standing disaster assistance program. Provides authorization of appropriations for funding.

• Eliminates funding for data mining and directed scorekeeping for data mining savings for Federal crop insurance programs.

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