Combest Proposes Target Prices

July 13, 2001

Chairman Larry Combest (R-TX) wants the House Agriculture Committee to bring back target prices for producers of eligible crops. Payments would be made when the price of a crop, adjusted for a fixed payment, is below the target price. A draft of the bill Combest has proposed also would increase the Conservation Reserve Program to 40 million acres with an increase in "biomass pilot acreage" and spend $1.4 billion over 10 years. Combest wants the bill reported from the committee in time for the August recess.

Target prices would be $4 per bushel for wheat, $2.75 per bushel for corn, $2.61 per bushel for sorghum, $2.36 per bushel for barley, $1.45 per bushel for oats, $0.729 per pound for cotton, $10.71 per cwt for rice and a new target price of $5.76 per bushel for soybeans and $0.1018 per pound for minor oilseeds. Except for soybeans and minor oilseeds, those were the target prices in effect under the old farm law prior to 1996 for the 1995 crops.

The milk price support program would be extended at $9.90 per cwt with an authorization of $773 million over 10 years.

Fixed, decoupled payments would continue except that oilseeds would be added to the list orf eligible crops, and producers would be allowed to update payment acres. Payments rates for current contract crops would be set at 2002 levels, and the soybean payment rate would be $0.34 cents per bushel with a comparable rate for minor oilseeds. The payment limit of $40,000 for the payments would be maintained.

The conservation section of the bill calls for reauthorization of the Environmental Quality Incentive Program (EQIP) through 2011 at $1.2 billion a year with livestock producers recieving 50% of annual funding. A $300 million fund would be created to address ground water conservation issues including cost sharing for more efficient irrigation systems.

Agriculture Secretary Ann M. Veneman commended Combest and ranking Democrat Rep. Charles Stenholm (TX) for the proposal. "This is an important beginning and a serious response to the needs of our nation, its farmers and ranchers and citizens," she said.

USDA is developing "principles related to future food and agriculture policy that meets the objectives outlined by the President, which includes ensuring a strong income safety net, pursuing a more market-oriented U.S. farm policy, and opening up new trade opportunities abroad," Veneman added.

"We expect to release these principles in the near future and look forward to working together with Chairman Combest and the committee, as well as the Senate Agriculture Committee, as we address these important issues."