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Archive for Friday, November 16, 2001

Senate bill ‘nudges’ farm subsidy program

November 16, 2001

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— Democrats forced a new farm bill through a Senate committee Thursday after giving Southern senators more money for big farms and adding a dairy program that could raise retail milk prices.

Republicans said the spending will stimulate price-depressing surpluses of subsidized crops and may break the budget.

The Senate Agriculture Committee approved the bill's subsidy section 12-9 with the support of one Republican, Tim Hutchinson of Arkansas, who is up for re-election next year in a major agricultural state. The panel rejected a Republican alternative backed by the Bush administration.

Committee Chairman Tom Harkin, a fierce critic of the Republican "Freedom to Farm" policy enacted five years ago, called the Senate bill a "nudge" to existing subsidy programs.

"We're not going to make any sharp turns. We have to keep our farmers going," the Iowa Democrat said.

Sen. Pat Roberts, R-Kan., said the bill was a "step back to the past." Increases in subsidy rates are bound to encourage overproduction, he said.

Bill faces amendments

The legislation could go to the Senate floor the week after Thanksgiving. It faces a series of amendments there, including one that would shift billions in crop subsidies into conservation programs.

The legislation would cost $174 billion over 10 years, by Harkin's estimate, $4 billion more than a farm bill passed by the House last month. Both bills would continue to direct the bulk of subsidies to farmers who grow wheat, corn, cotton, rice and soybeans and add new crops such as peanuts.

In a statement, Agriculture Secretary Ann Veneman didn't comment on the bill but said the administration is "committed to good, sound agriculture policy that benefits a broad range" of farms.

Under the bill, farms will still be allowed to collect crop subsidies in unlimited amounts, and they could get another $200,000 in payments under two other income-support programs.

The program would guarantee dairy farmers minimum returns for their milk in every region, much as a pricing system did in New England before it expired in September. A University of Missouri study estimates the plan would raise retail milk prices by 10 percent.

The 1996 farm bill ended a Depression-era system of production controls and scaled back on price-based subsidies.

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