One Republican Reaction to Glickman's Payment Plan

September 28, 1999

Agriculture Secretary Dan Glickman's proposal to pay farmers income assistance on acres actually planted brings a sharp reaction from a Republican official on Capitol Hill. He says speed of delivery of the payments is the main reason for Republicans' opposition to Glickman's proposal.

Glickman has said Congress should not pay farmers relief money unless the farmer actually planted the crop that was supposed to be planted. He said there were 79.5 million acres of wheat included in contracts this year but 62.7 million acres actually were planted to wheat. Just in Texas, he added, there were 595,000 contracted acres of rice, 270,000 of which were planted to rice. "Is it right to provide an income loss payment on acres not planted?" asked Glickman.

The justification for adding farmer relief payments to the market transition payments mandated in the 1996 farm act "is very simple," the Capitol Hill Republican official says. It's the difference between delivering the payments in a week to 10 days under the Republicans' plan or 12 weeks under USDA's proposal.

One possible way to determine how many acres a farmer actually planted, as Glickman proposed, would be to use state averages. But state averages do not differentiate between irrigated and non-irrigated land. "Somebody's going to be very unhappy with those yields," the Capitol Hill official says, "maybe a lot of somebodies."

To speed up the process, USDA could make a partial advance payment, then pay the remainder later. But this official says he's been told that to make an advance payment saves only a few days' time compared with making the full payment based on actually planted acres.

Another advantage of using transition payments as the basis for relief payments, he adds, is that USDA used that process to deliver relief last year. That means farmers' names, addresses and how much each received last year already are in USDA's computer system. Substituting the amount of payment to be made this year should be about the only change necessary, he says.

To limit payments to farmers with gross sales below a certain level "doesn't make any sense," this official says. "What matters is your net income" after business expenses. Republicans don't favor that approach either, he adds, but if it were to be discussed, the only way it could be made acceptable is to base it on net income.

"People forget that farming is a very high volume, high gross business with a low return even in a good year," he says. "This has not been a good year."