Glickman Seeks Philosophical Context for Proposal

February 3, 2000

While spelling out the practical details in the Clinton Administration’s farm policy proposal for the next two years, Agriculture Secretary Dan Glickman Wednesday also sought to provide a philosophy for change.

Part of that philosophy concerns a belief that land and water are valuable commodities as are crops and should be part of a policy package. So the Clinton package seeks to broaden land conservation and make financial assistance more national in scope. It also means acting now to protect farmer income, not waiting until a drought strikes or low prices take a toll on farmers’ pocketbooks.

The fact that Congress appropriated about $15 billion in the last two years for direct assistance to farmers on an emergency basis illustrates how the 1996 farm law is not working well, says Glickman. Although Glickman is not proposing changes to the law, he wants to provide direction to Congress for change in 2002, when a new farm law will be written.

A supplemental income assistance program provides payments to eligible wheat, feed grain, rice, upland cotton and oilseed producers if projected gross income for the crop declines below 92% of the preceding five year average. Gross income would include gross market revenues for the crop plus government payments including AMTA payments, marketing loan gains and loan deficiency payments.

Program payment rates would be determined at the beginning of each crop and, and payments would be made to farmers when they establish production levels with the Farm Service Agency. Funding could total $3.1 billion in each of fiscal years 2000 and 2001.

Payments would be subject to a separate $30,000 per person payment limitation that would include AMTA payments and supplemental income assistance. If a person’s AMTA payment was $30,000 or more, that person would not be eligible for supplemental income assistance.

The administration also will propose extending the milk price support program to 2002 with a $9.90 per cwt. price support and a cost to the federal government of $150 million in fiscal 2001 and 2002.

Glickman will use his existing authority to maintain maximum marketing assistance loan rates for the 2000 crop at a cost of more than $500 million. Loan rates for 2000 would be $2.58 per bushel for wheat, $1.89 per bushel for corn, $5.26 per bushel for soybeans, $6.50 per cwt. for rice and $0.5192 per pound for upland cotton.

The additional $1.3 billion for conservation in fiscal 2001 is aimed at land management as well as enhancing farm income. Farmers could be paid for conservation practices such as nutrient management, prescribed grazing and partial-field conservation practices including grassed waterways and windbreaks.

Increases are proposed for the Wetland Reserve Program, Conservation Reserve Program, Farmland Protection Program, Wildlife Habitat Incentives Program and the Environmental Quality Incentives Program.

The premium discount available in 1999 and 2000 for farmers who purchased buy-up coverage for crop insurance would be extended to 2001; the budget also requests $100 million a year to develop a policy that covers multi-year losses.

At briefings yesterday for Congressional staff and farm groups, the supplemental income plan got a less than enthusiastic reception, sources said. Although the Administration asserts that fewer than 2% of farmers would be affected by the plan’s targeted payment limit, that appears the most controversial aspect of the proposal.