Hood: Payment limit compromise possible

Although it is difficult to tell what, if any, progress is being made on the farm bill because of the secrecy accompanying the negotiations that have been taking place since last Friday, NCC Chairman Kenneth Hood said he still believes conference members should pass the bill now.

“With conferees seemingly deadlocked for so long, I’ve been asked time and again if it wouldn’t be best to take a pass on the farm bill for this year and rely on another emergency assistance package,” said Hood, speaking to the American Cotton Producers in Austin.

“My answer has been consistent. I’ve taken the position that unless the conference process became hopelessly bogged down, it would be a mistake to abandon efforts on the farm bill.”

Hood, a producer from Gunnison, Miss., said he understood that farmers have become frustrated by the slow-moving progress of the farm bill and with the lack of information that has been forthcoming from conference committee members.

“This morning you probably know as much as I do about the status of the conference process,” he noted. “Very little information has been made available by the conferees. However, it began to appear late last week that some progress was finally being made.”

Judging from the information coming out of the closed-door negotiations, Hood said, “We’ll have a new long-term farm bill with a much improved safety net based on a combination of target price and fixed payments that are very near those in the House bill, and I think we’ll be able to maintain payment limit provisions that are not nearly as onerous and disruptive as those in the Senate bill.

“It also appears we can retain the ability to use certificates for loan redemptions.

Besides those possible developments, Hood said he believes the new farm bill should be passed now for three other reasons:

  • Farmers probably wouldn’t receive benefits any faster from emergency assistance legislation.

“It takes legislation to deliver benefits either way, and for the past month, Congress has been at home,” he said. “I know there’s concern about the amount of time it will take to implement the new farm bill. But there are provisions of it that can be implemented rather quickly, and there are ways to make partial payments on other provisions that could be settled up later after bases and yields are updated.”

  • The benefits from a supplemental AMTA payment delivered as emergency assistance would fall about a nickel short of the per-pound benefits in the House bill.
  • The difference between the way $7.3 billion is scored as emergency assistance as opposed to the 2002 score for farm bill outlays results in the loss of about $2 billion in spending authority for the remaining nine years of the farm bill.

“Expressed another way, Council economists tell me that’s equivalent to about a one-cent reduction in the target price for the next nine years,” said Hood.

“For these reasons, we’ve continued to press conferees to find a way to resolve differences and pass a timely farm bill. Again, though, if they get completely bogged down, it’s comforting to hear both Congress and the Administration pledging emergency assistance.”

Hood’s comments came amid reports that the last remaining obstacle to passage of the farm bill was a major dispute over setting the corn loan rate.

Leaders of the House side of the conference committee reportedly thought they had an agreement with the Senate on a compromise that would have increased the loan rate from $1.89 per bushel in the House bill to $1.97 per bushel.

But Senate negotiators came back in a meeting Tuesday night with the word that Senate Majority Leader Tom Daschle, also a member of the conference committee, would not agree to anything less than a $2 loan rate for corn in the final farm bill.

Congressional sources said that farmers in Daschle’s home state of South Dakota were upset about the removal of a provision in the Senate-passed bill that would have enabled them to increase their program yields and that Daschle was attempting to make up for the loss with the 3-cent higher loan rate.

In an indication of a possible compromise on payment limits, Sen. Charles Grassley, R-Iowa, one of the authors of the Grassley-Dorgan amendment in the Senate bill went to the House to try to persuade House members to support his $275,000 per farm limit on payments.

“As a Senator, I’ve never gone to the House floor,” Grassley said in a statement. “But, this issue is so important to family farmers that I want to do everything I can to make sure they aren’t shortchanged.

“If Congress doesn’t set credible payment limits in this farm bill, then we’re making family farmers more vulnerable to greater resistance from the public to helping family farmers in the future. Ultimately, that could mean so-long to the safety net and, in turn, the family farmer.”

Grassley reportedly was working with Rep. Nick Smith of Michigan to win approval for House support for the tighter payment limits. Smith is the congressman who called the Stuttgart, Ark.-based Riceland Foods Inc. cooperative a “mega-farm” with 40,000 acres of land.

Riceland issued a statement saying it owned only 243 acres of farmland that it was holding for a potential location for a new grain dryer, and that it received no payments on those 243 acres.

Smith said he obtained the information on Riceland from the Environmental Working Group’s listings of farm program payments on the Internet.

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