House Ag Committee Chairman Larry Combest (R-TX) says a total of $6 billion over five years in new agricultural funding authority will allow "permanent changes in the farm financial safety net."  The money is part of the budget resolution for fiscal years 2000-2004.

"This is a great opportunity for America's farmers and ranchers," said Combest.  "They are in a crisis, and we are working hard to create an adequate safety net to ensure their future prosperity."

The $6 billion is earmarked for crop insurance and risk management improvements.  "I'm confident we'll be able to pass legislation (reforming risk management) this year," he added.

In addition to the $6 billion in new agricultural funding, the House budget resolution also includes up to $15 billion in tax reductions for 2000 and almost $800 billion over the next 10 years.

During its budget resolution debate, the Senate Thursday rejected a proposal from Democrats to authorize spending of $6
billion a year for five years to provide higher crop supports.  The proposal would remove limits on loans for farmers and increase loan rates for wheat and corn by about 30 cents a bushel and for soybeans by about 5 cents a bushel.

The spending authority would have been in addition to $6 billion already allowed in the resolution that is earmarked for crop insurance and risk management reforms.

Passage of the 2000 budget resolution by the House and Senate sets the stage for a major farm policy debate later this year.  Many expect the Congressional agriculture committees to focus on improving crop insurance since the need to “reform” crop insurance was used as the rationale for adding the $6 billion.  However, the resolution does not limit them to that subject.  It adds $6 billion in the next five years for either “risk management” or “income assistance.”

Many Republican policy makers see improvement of the agriculture safety net by a reformed crop insurance program as essential to supplement the direct payments made under the “freedom to farm” program.  Many Democratic legislators, though, have a more expansive view of income assistance – for example, higher loan deficiency payments as a result of an increase in loan rates.

Both the House and Senate agriculture committees have held hearings on crop insurance and risk management, but neither has scheduled action on any bills.  Serious action may be unlikely before a House-Senate conference committee completes its work and presents an identical budget resolution for final approval by both chambers.  That will not occur until Congress returns from a two-week Easter recess.

Outside crop insurance, the budget resolution continues to maintain the so-called “caps” on spending for most USDA programs, posing a funding challenge to the appropriations panels that will soon begin to consider annual spending bills.