Farm Aid Being Distributed, More Will Be Needed

October 28, 1999

Agriculture Secretary Dan Glickman says money is on the way to farmers from the income relief portion of the aid package in the agricultural appropriations bill. He told reporters he's certain more will be needed next year because of continued low commodity prices, but he's determined to pressure Congress to change the way the money is distributed.

The $5.5 billion in income assistance payments -- made equal to the market transition contract payments for 1999 -- "will be the easiest to distribute," Glickman said at a news conference Wednesday, "and virtually all of this money will go out in the next few weeks." The payments began to be made on Monday, he said.

This brings to $22.5 billion the total direct assistance to farmers in calendar 1999 -- a record. The previous high was $16.7 billion in 1987, Glickman said. Other income assistance payments, including those for peanuts (about $42 million), tobacco ($328 million) and dairy ($128 million) will be made over the next few months, he added.

Payments under the soybean portion of the appropriations bill would take a while, said Glickman. The program is complex and will require some rule-making. Farmers are given multi-year options, such as opting to use yields from 1997, 1998 or 1999. That means there can be no decision made until the 1999 harvest is complete, Glickman pointed out.

USDA will make an advance payment on the $1.2 billion disaster relief portion of the appropriations bill. The advance will equal 35% of verified losses and will be made by the end of the year, Glickman says. The balance will be paid in early 2000 when all losses have been calculated and pro rated against the advance. The delay is necessary because the money covers 1999 losses, so USDA must wait for the end of harvest for 1999 crops.

There is no money available to implement the livestock mandatory price reporting section of the bill, said Glickman. Some $4.7 million is needed, he added, but is not available. Congress will have to provide additional funding for that program to be implemented.

Glickman has been especially nettled for some weeks now over the method Congress used to distribute the supplemental transition payments -- using the actual transition payment structure to target "eligible" producers.

"I believe that the income loss assistance is inadequately targeted and will be unfairly distributed," Glickman said. "Congress opted for a system that links payments to producers' acreage going back nearly a decade and yields going back two decades. As a result payments will be made based on conditions that may no longer exist."

He added, "Some farmers will be compensated for a crop that's doing quite well...others for a crop they don't even plant anymore. And some farmers will receive money for the corn they didn't plant while they are receiving payments for the soybeans they did plant. Meanwhile, some producers who endured the most economic stress and hardship this year will get short-shrifted." He promised to work to change that distribution system next year if more aid appears necessary.

Asked when USDA will announce the tariff rate quota for sugar, Glickman said the issue remained under discussion both at USDA and the White House Office of Management and Budget. USDA was working to help refineries on both the East and West Coast find enough raw sugar for processing, Glickman added. A shortage of raw sugar has forced refiners to operate at less than capacity.