Lugar Tries A High Road in Farm Relief Debate.

July 29,1999

Senate Agriculture Committee Chairman Richard Lugar (R-IN) has staked out a position in the farmer financial assistance debate certain to bring harsh confrontation with Democrats determined to get at least $10 billion in emergency relief for farmers as quickly as possible. In a Dear Colleague letter signed only by Lugar, the chairman defended the status quo while not actually opposing further assistance.

The letter was "to provide background for a complex debate on farm income that will soon engage the Senate," Lugar said. However, the background did not include an argument in favor of emergency relief; on the contrary, Lugar said the proposals for emergency spending "would reduce monies otherwise designated for social security, medicare, tax reduction or reduction of the federal debt."

Presenting what at first glance seems a glowing report of the economic condition of farming, Lugar said positive net farm income under freedom to farm is $43.8 billion this year compared with $44.1 billion for 1998. The average farm income for 1990-97 was $45.7 billion, not much more than the total expected this year.

Federal payments to farmers this year should total $16.6 billion: $5.1 billion in annual transition payments, $6.6 billion in loan deficiency payments, and $4.8 billion from other payments such as conservation and crop loss disaster payments.

"While much of the farm income debate has focused on low prices," said Lugar, "the measure that is more reflective of the financial situation of farms is return per acre," determined by multiplying price times yield. But farmers will receive at least the minimum price guaranteed by the federal government, Lugar added, $1.89 per bushel for corn, $2.58 per bushel for wheat, 52 cents per pound for cotton or the $5.26 per bushel marketing loan for soybeans.

Several senators have proposed potential amendments to the agriculture appropriations bill to increase direct federal farm spending "by many billions of dollars," said Lugar. "All these proposals would be declared emergency spending to avoid budget caps, but they nevertheless would reduce monies otherwise designated...Major farm organizations have suggested programs totaling an additional $14-16 billion in federal farm spending this year."