Ag Policy Update–13 FEB 02

(Sunup Program to be aired 14 FEB 02)

 

1. The Senate is wrapping its farm bill debate. What’s the latest?

–On Wednesday 13 Feb, the Senate passed its version of a new farm bill.

–The Senate has made some interesting amendments in the farm bill since it left the Senate Ag Committee.

–The Johnson/Grassley amendment bans packer ownership, in an attempt to slow or reverse concentration.

–The Grassley/Dorgan amendment reduces the payment limitation to $275,000/year.

–The bill was already somewhat different than the House version.

–Now, it is guaranteed to cause heated and lengthy debate in conference.

 

 

 

 

2. Can you take a moment to review some of the key differences in the Senate bill as compared to the House version?

–The Senate bill is a 5-year bill, where the House version is 10 years.

–Both are in the $168-$172 billion range, when compared on a 10-year basis; however, the Senate programs are more front-end loaded.

–Both continue something like flex or AMTA payments, although the House is at a higher rate than the Senate.

–Both maintain LDP and marketing loan gains, but the Senate wants to raise loan rates.

–Both create a new counter-cyclical payment that makes the emergency payment safety net certain, although the House is again at a higher rate than the Senate.

–Both expand conservation programs, although the Senate is more expansive and would likely offer more funding opportunities and to more producers than the House.

–Senate wants a major new set of programs for dairy.

–Both want to eliminate the peanut program & replace it with a program similar to other program commodities and compensate quota holders for loss of quota.

–Both versions’ peanut provisions also contain language that allow movement of base by the producer.

 

 

3. You mentioned there were some of the controversial amendments in the Senate debate. Give us some more detail on these.

 

–The Johnson-Grassley amendment prohibits livestock owernership by packers 14 days before slaughter.

–The intent is to slow the trend of concentration.

–The amendment passed in December, was voted on again this week and won with even more votes.

–There remains some concern about the definition of "control".

–The Grassley-Dorgan amendment to reduce payment limitations is perhaps the most significant.

–Sen. Grassley is proposing new payment limits of $225,000 ($275,000 for a husband and wife).

–This compares to the current $460,000, or $500,000 in the Senate bill, or $550,000 a year in the House bill.

–The amendment effectively eliminates the "3-entity rule" in an attempt to close a legal loophole that has allowed some families get government checks much larger than the limits were intended to allow.

–Another Senate provision that is a major issue for Western states and may set a precedent for other states, allows for the federal government to transfer or acquire water rights to protect endangered, threatened or sensitive species.

–Farm legislators in the Western states are very upset about this.

 

 

4. Assuming the Senate okays its version of a new farm bill this week, where do we go from here?

–Both the Senate and House will designate reps to a conference committee that will be challenged to reconcile the differences and report a single bill.

–Given the differences, especially the noted amendments, and the President’s concerns, this will not be an easy process.

–House Ag leaders have been unwilling to compromise in public on their version, and they’ve also been very critical of the Johnson and Grassley amendments.

–While the President was initially critical of the House version when it passed, he’s evidently been persuaded it is the best of the 2 choices; he’s not officially stated his preference, but his comments suggest he supports the House version.

–In any event, Congress is off until 25 Feb after this week.

–Then, they will break again late March and early April.

–Look for tough talk, but eventual compromises:

–Current payment limits will likely be maintained

–a study will be commissioned on reducing limits

–the Johnson amendment will likely fall; it may be replaced with a study as well.

–the peanut program may be phased in, rather than changed immediately.

–The Senate will likely lose the higher loan rates, but may get some of their conservation provisions in.

–The House fixed payment and counter-cyclical provisions are more likely to win out.

 

–If we are surprised with a compromise bill by 22 Mar, it will be signed and quickly implemented with in 3-4 months.

–If the conference stalls, there will be emergency aid for producers of 2002 crops, & there will be little incentive to have a new bill before October or November.

 

6. Congress:

a. Recent activity:

–Senate debate of farm bill with many amendments

b. Current/upcoming:

–Several committees have initiated investigations of various aspects of the Enron scandal.

–House Ag Committee subcommittee reviews implementation of Ag Risk Protection Act (13 Feb).

–Senate Ag Committee postponed consideration of several USDA appointments (25 Feb?)

–House-Senate conference on farm bill begins after President’s Day break (reconvene 25 Feb)

c. 2002 Schedule:

–As of Monday 18 Feb, there are 117 working weekdays in this session.

–As of Monday 25 Feb, there are 117 working weekdays in this session.

Target adjournment 4 Oct

d. Key issues:

–Trade Promotion Authority

–New farm bill

–Bioterrorism & homeland defense

–Healthcare reform

–Prescription drug benefits

–Corporate & retirement plans reform/oversight

–Campaign Finance Reform

–Merger activities, especially in agriculture

–Economic stimulus

 

 

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