Bill Includes Price Reporting, Omits Credit Item

October 4

Senate Agriculture Committee Chairman Richard Lugar's livestock price reporting measure was included in the agricultural appropriations conference report, but another proposal, vigorously opposed by rural commercial bankers, was not included. The bankers say the provision would have greatly expanded the lending authority of the Farm Credit System. The House approved the conference report, and the Senate is expected to act on the measure this week.

Lugar's provision requires hog processing plants that slaughter an average of 100,000 hogs or more a year to submit purchases daily to USDA. Cattle plants that slaughter 125,000 head or more a year also must submit daily purchases to USDA. The thresholds effectively capture 94% of livestock markets by requiring 10% of all plants to report, Lugar says.

The bill passed the Senate Agriculture Committee in July. Beef, pork and lamb organizations as well as other interested farm groups and individuals participated in a lengthy consultation process leading up to the committee's action.

However, a proposal that was not included in the bill would have transferred the powers of USDA's Alternative Agricultural Research and Commercialization Corporation to the Farm Credit System. AARC is a government-owned lender and venture capital firm that invests in companies that develop bio-based industrial products from agricultural, forestry and animal byproduct materials.

The American Bankers Association opposed the measure. ABA says it would have allowed the FCS to make venture capital deals and greatly expand lending. Also, there had been no public debate on the issue and no "demonstrated capacity within the FCS to handle venture capital placements," says ABA.

For the record: senators not signing the conference report were Arlen Specter (R-PA), Tom Harkin (D-IA), Byron Dorgan (D-ND) and Richard Durbin (D-IL). House members not signing were James Walsh (R-NY), George Nethercutt (R-WA), Marcy Kaptur (D-OH), Rosa DeLauro (D-CT), and Maurice Hinchey (D-NY).