May 31 - June 6

Congress passed an emergency aid package & crop insurance reform before leaving on Memorial break. Recap what they want the President to sign.

$7.1 billion emergency aid package

• AMTA (PFC) payment $5.5 bil. paid Sep 00 in addition to regular AMTA payment for 2000
• OK: $147 mil additional for 45,000 farmers

• $1.207/bu for wheat; ($1.21 + $2.58 = $3.79)
• $3300/farm average supplemental check

• Other aid funds:

• oilseed producers--$500 mil.
• specialty/other crops--$900 mil.
• Ag research--$31 mil.
• Ag conservation--$50 mil.
• LDP for grazeout--$43 mil.

$8.2 bil. for crop insurance reform

• 5-yr funding increases subsidy from current 13-57% to new range of 38-67%
• equal subsidy for alternative plans (revenue protection, etc.)
• CAT continued & adds alternative to use area data
• funding for research/development of new policy
• pilot programs (livestock, dairy options expansion, premium rate reduction)
• competitive grants program for producer education in underserved areas
• funding & new penalties to combat fraud/abuse
• e-info

 

Was this something that is good for agriculture?

• With prices continuing at relatively low levels, export markets still weak, and farmers not yet recovered from the past 2 years of weak prices & bad weather, this will infuse much needed income into the farm sector & some of rural America
•  
• There are problems in the disbursement of emergency aid.
• To make sure the payments were easy to calculate & easy to get to producers, Congress decided to duplicate the 1999 payment.
• This means that some producers/owners who don't need assistance will get it, & some who do need aid won't.
• There are also differences of opinion about the Lucas provision for LDP on grazeout.

So, where does this take the debate on future farm policy?

• More than anything else this certifies that a Afree market@ for US agriculture is a myth, if anyone had any doubt.
• The 1996 farm act was touted as pro-free market, intended to reduce government support for producers in the hopes the market would more than make up any losses. The facts are these:

• In the 5 years preceding the 96 act, government payments averaged about $9 bil. In the 5 years since the act, payments have averaged about$13.8 bil.
• That means that about 27% of NFI was provided by direct government payments before the act, & 42% of NFI since the act.
• In 2000 w/this new aid, direct government payments will provide 54% of NFI.
• Subsidy for crop insurance is expanding, & coverage for livestock & dairy is becoming standard.

• So, with a debate on the next farm bill coming up, any pretense for free market agriculture will be difficult to justify.
• With a more complicated trade & trade policy setting, & trends toward concentration, biotechnology & unstable weather, the alternatives for policy just got murkier.
• So-called Afree market@ policy is off the table. Some politicians may label their proposals as such, but it will call truth-in-labeling into question.

Other policy-related stories:

• Status of appropriations bills: amendments are stalling several; only one (military construction) has moved to conference. Amendment to end trade sanctions on Cuba is holding up ag appropriations bill.
• Senate will likely vote on PNTR for China this month, later rather than sooner. Likely to pass (over 60 indicated favorable vote).
• Ag export forecast is up for fy2000 to $50 billion; but with imports also increasing, surplus will decline to $11 billion.
• USDA announced $13.3 million in grants, loans & loan guarantees to 47 new rural economic development projects in 23 states last week. Among these was a $33,750 grant for feasibility analysis on kenaf in OK.
• A new USDA-ERS study indicates growing impacts on ag from sustained oil price increases. Farm income and debt repayment will be adversely affected.

Congress

Recent/Current:

Congress on Memorial recess until 5 Jun

Upcoming:

• House Ag subcommittee review of Inspector General report on Urban Resources Partnership Program postponed
• House Ag Committee reviews USDA export/market promotion programs (21 Jun)
• Consideration of various appropriations bills continues in June

The budget process & deadlines:

• The President highlighted his budget proposal at the State of the Union Address 27 Jan.
• Feb: House & Senate Budget Committees held hearings w/experts & CBO.
• Mar: Budget Committees draft budget resolution.
• 1 Apr: Budget Committees report resolution.
• 15 Apr: Budget resolution adopted by Congress.
• 15 May: Appropriations bills considered by House.
• 10 Jun: House Appropriations Committee reports last bill.
• 30 Jun: House completes action on appropriations bills.
• 1 Oct: new fiscal year begins.
• 6 Oct: target adjournment.

Congress reconvened 24 Jan with 131 weekdays scheduled until 6 Oct target adjournment. As of 12 June, there are about 51 weekdays remaining in this session.

Senate Scheduled in session (remaining):

Jun. 5 - Jun. 30.

Jul. 10 - Jul. 28.

Sep. 5 - Sep. 28.

Oct. 2 - Oct. 6.

Oct. 6 Target Adjournment

House Schedule not in session these days:

June 14 Flag Day

June 18 Father's Day

July 3 - 7 Independence Day District Work Period

July 4 Independence Day

July 31 - September 5 Summer District Work Period

September 4 Labor Day

September 30 Rosh Hashanah

October 6 Target Adjournment

Other key issues for this session of 106th Congress:

• dealing w/Social Security, Medicare, Medicaid.
• consideration of tax cut & 13 appropriations bills
• Endangered Species Act revision
• consideration of Kyoto global warming agreement
• oversight of WTO Millennium Round (when restarted) & agreement to continue as member in WTO
• consider revision of Food Quality Protection Act
• campaign finance reform