Posted by: Phillip Fraas
April 30, 2007
Topic: REPORTS ON FARM BILL STATUS--First Half of 2007

HEARINGS: Both the Senate and House agriculture committees have been busy in recent days holding hearings to build a record before they begin writing the 2007 farm bill.

Last week, the House Committee on Agriculture held hearings on issues related to the commodity title (which is the heart of the farm bill) and on the milk marketing order program, and the week before that on conservation programs, organic farming, and the livestock industry. Next week, the committee will tackle crop insurance and the rural broadband communication network.

The Senate Committee on Agriculture, Nutrition, and Forestry had three days of hearings last week on the commodity title programs, concentration in agriculture, organic farming, and other farm bill topics. This week and next, the committee will hold hearings on conservation issues, rural and agricultural energy, and rural development.

CHAIRMEN'S MARKS AND MARK-UP SCHEDULE

It is reported that Chairman Peterson of the House Agriculture Committee is still pushing to get his mark out in May, but that it won't necessarily be a detailed proposal drafted as legislative language. It might look more like a concept paper covering the major farm bill issues. Once the chairman's mark is released, likely the committee will move immediately to mark-up, starting with subcommittee mark-up sessions.

One possible hold-up for the House is the wait for the final numbers in the congressional budget resolution for FY 2008 and the four succeeding years. The budget resolution is in conference between the Senate and House, and Chairman Peterson is still working to get some additional funding for the farm bill. Right now, the resolution only includes funding sufficient to pay for current farm bill prgrams if they were extended without change. Peterson--and others--would like to see more funds to pay for new agricultural energy programs to assist meet the President's energy independence goals and for other new farm bill priorities such as increased conservation spending, a permanent disaster assistance program, and assistance to fruit and vegetable farmers.

On the Senate side, it increasingly looks like mark-up will be in June; and still no word on what sort of mark-up document will be used.

DIRECT PAYMENTS UNDER SCRUTINY AS THE COMMITTEES DEAL WITH BUDGET PRESSURES

In recent days, both Chairman Peterson and Chairman Harkin of the Senate Agriculture Committee have let known that they are not strong backers of the direct payment program. That program is one of the three main pillars of support for the row crop farm bill beneficiaries--wheat, feed grains, oilseeds, cotton, and rice. The other two important programs are the counter-cyclical payments and marketing loan benefits.

The chairmen's comments can be read as their signaling that they might be prepared to reduce the level of spending in direct payments below the current program base line to free up money for other programs they want to make part of this farm bill.

According to USDA's summary of the farm bill base line, direct payments on average over the next ten years will cost a little over $5 billion a year. The other two pillars of farm support take up only a little over $2 billion a year over the same time period. USDA, by the way, contrary to the chairmen's views, would would like to see direct payments increased and the other two programs decreased.

Direct payment money, if shifted, most likely would be allocated to pay for a new disaster assistance program or for increased conservation spending.

That's it for now; but I will continue to keep you posted on additional farm bill developments as the committees move toward mark-up and beyond.

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