Senate Committee Completes Farm Bill

November 16, 2001

The Senate Agriculture Committee on Thursday passed a five-year farm bill that increases most loan rates but otherwise has much in common with H.R. 2646, the farm bill passed by the House of Representatives. Arkansas Republican Tim Hutchinson joined all 11 of the committee's Democratic Senators in giving final approval to the bill, which now goes to the Senate floor.

Democrats turned back a Republican substitute by Sens. Pat Roberts (R-KS) and Thad Cochran (R-MS), then gave final approval to the omnibus farm bill by 12-9. During the morning, the committee also approved compromise conservation provisions and reinstated

Under the committee's bill, most marketing loan rates would rise – to $2.08 for corn and $3.00 for wheat, for example. The soybean loan rate would fall marginally to $5.20. As under the current farm bill, there would be automatic direct payments regardless of price. These payments would decline over the life of the bill, but would be supplemented by a "safety net price," under which countercyclical payments would be made when prices fell. For the first time since 1985, payment yields would be updated, and payments would be made on all base acres. (Current payments are based on 85% of base acres.)

The bill establishes a new incentive payment program authored by Harkin, the Conservation Security Program (CSP), which is designed to improve farm income and increase agricultural conservation. Under the CSP farmers and ranchers who voluntarily maintain and adopt conservation practices on working lands would receive incentive payments. The acreage limit for the Conservation Reserve Program (CRP) would be expanded to 40 million acres from the 36.4 million acre current limit. Acreage would be doubled for the Wetlands Reserve Program (WRP) by increasing the total acreage cap by 1.25 million acres. Funding would be increased for the Environmental Quality Incentives Program (EQIP), eventually rising to $1.25 billion a year, more than six times the current funding level of $200 million a year.

The committee approved a title to promote farm based renewable energy sources such as ethanol, biodiesel, wind energy, biomass fuels and other forms of alternative energy. Included in the title are a grant and loan program to help establish new farmer-owned renewable energy co-ops; a complementary grant and loan program to provide assistance in the purchase of renewable energy systems such as wind-turbines, solar or energy-efficient heat pumps; an energy audit program to help farmers and rural Americans find ways to save money and assess their potential for generating renewable energy.

The bill's rural development title provides grant and loan programs to help create and expand businesses to provide jobs, and improve community facilities; creates a National Rural Cooperative and Business Equity Fund with matching government and private capital to create a national fund to boost equity in rural America and provides funding to expand broadband access for rural America.

A new dairy program was included that is designed to guarantee dairy farmers a minimum return for their milk in every region of the country, similar to a controversial pricing system in the Northeast that expired in September. Money to ensure the return would come from fees levied against milk processors.

House Agriculture Committee Chairman Larry Combest (R-TX) issued a statement Thurssday that said, "I am pleased the Senate Ag. Committee has taken further action today and hope that this action will move the process forward in producing a much needed farm bill this year.

"I am concerned, however, that the bill that passed the Committee appears to exceed the agreed upon budget allocation and thus cannot move forward as written. I am also concerned that the process in the Senate has digressed into partisanship, which is both an unproductive and unnecessary turn since the Bush Administration and Senate Republicans support passage of a farm bill this year that addresses the 2002 crop, that is consistent with the budget resolution, and that provides meaningful and needed countercyclical assistance to our nation's agricultural producers."