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Corn+Soybean Digest

Senate Ag Panel Won't Lower Farm Subsidy Limits

Too many members of the Senate Agriculture Committee oppose tighter limits on U.S. farm subsidies to include stringent reforms in an overhaul of the farm program, the panel's chairman said on Thursday.

Because of the need for wide support for the farm bill, "I can't say that I will be fully satisfied with what is in the bill on payment limitations," said chairman Tom Harkin (D-IA), Iowa Democrat, in a statement.

Committee member Charles Grassley (R-IA) has proposed a "hard" cap of $250,000/year/farmer, and requiring at least 1,000 hours of labor or management a year to qualify for payments. The subsidy limit now is $360,000, but there are a number of ways producers can get around that cap.

"Senator Grassley and I see eye-to-eye on wanting stronger payment limitations, but a number of members of the Senate Agriculture Committee strongly disagree with us," said Harkin.

"It's clear we need bipartisan cooperation to report a new farm bill from the Committee and get it enacted still this year.” Harkin said. "So I can't say I will be fully satisfied with what is in the bill on payment limitations, yet as chairman I have to recognize the critical need to complete a bill soon for the good of farmers and rural communities in Iowa and across the nation."

Harkin announced on Wednesday that ag panel members had reached agreements on the makeup of the 2007 Farm Bill, allowing them to move forward with a vote next week that would send the legislation to the full Senate. Harkin has tentatively scheduled formal committee debate over the legislation for Wednesday.

The farm bill framework, prepared by Harkin along with Committee members Kent Conrad (D-ND) and Saxby Chambliss (R-GA), earmarks $4.2 billion to improve food stamp benefits, $3.7 billion in extra spending on land stewardship and $1.3 billion in new funding for biofuels. There would be cuts of several billion dollars over five years in agricultural programs.

In addition to continuing the current system of crop support payments, the Senate framework would give farmers the option, beginning in 2010, of switching to a revenue-based safety net program – the "average crop revenue" program, which would release payments when statewide income from a crop was below a target set by law.

Editor’s note: Richard Brock, The Corn And Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.

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