Ag Policy Update–6 MAR 02        

(Sunup Program to be aired 7 MAR 02)

 

 

1.     The farm bill debate continues in Congressional conference.  What’s the latest?                                                            

 

 

–There have been three significant stories coming out of conference in the past week. 

–First, the Senate staff released its summary of why they think it’s the best of the two versions. 

–This prompted several reps and analysts to underscore that so many key differences suggest a lengthy conference debate.

–Next, there were some curious stories about how staffers from the House and Senate were meeting to work out differences and their discussions seemed to be cordial and productive, suggesting there might be a way to compromise.

–The caveat was that the staffers started with the issues where there were few differences or where there wasn’t so much at stake.

–Finally, independent analysis is starting to surface that greatly improves the information about comparison of the two bills.

–Keep in mind there have been no formal meetings of conferees, but just their staffers to date.

 

2.        What analysis are we talking about?

 

–Here at OSU, several of us ag economists have begun to look at farm level comparison of the two commodity programs.

–For wheat at 30 bu/ac, we have found the following:

(1)    The House pays more over the first five years for most farm sizes and varying prices.

(2)    We varied prices of wheat from $1.80 to $5, and size from 100 acres to 11,000 acres.

(3)    We also compared the House and Senate payments for a single entity and for an eligible married couple vs. the 3-entity rule.

(4)    Only in the price range from $2.40 to $5 and base acres 7000-11,000 does the Senate pay more than the House.

(5)    At all other price levels and all other base acres, the House pays more over the 5 years, whether single or 3 entity.

(6)    For a single entity, payment limits don’t impact until you reach 3700 acres for the House and 5500 acres for the Senate.

(7)    For an eligible couple, payment limits impact at 5500-22,100 acres for the Senate, and 7400 acres for the House, depending on price levels.

(6)    We did not add in comparative conservation payments yet.  It appears this would make the farm level analysis much closer, and likely the Senate would pay more overall.

(7)    We have also not yet evaluated other program crops, but hope to do so soon.

 

3.     You also mentioned other analysis that has been presented to the conference committee.  What is it & who’s doing it?

 

–The Food Ag Policy Research Institute, a consortium of landgrant universities has done some aggregate and macro level analysis, and reported it to Congress.

–Here are some of the highlights:

(1)    For commodity and conservation programs over 10 years, the Senate pays slightly more.

(2)    The House pays more for commodity programs than the Senate bill over the 10 years.

(3)    Senate payment limits could have greater impacts on cotton and rice producers.

(4)    More acres are likely to be planted to major crops, especially wheat and feed grains, with the Senate bill.

(5)    Net farm income is likely to average about the same for either bill.

 

 

 

4.     You mentioned trade issues last week.  Anything new to report here?

 

–TPA (Trade Promotion Authority–formerly known as fast-track negotiating authority) consideration continues on again and off again in the Senate.

–Senate Finance Committee Chair Baucus was not optimistic this week about passage, especially any time soon.

–One of the sticking points is that it be linked to TAA–Trade Adjustment Authority, that would allow compensation for those who are harmed by trade agreements.

 

5.        Congress:

 

a.        Recent activity:

–Senate Ag Committee considered several USDA appointments (6 Mar)

 

b.        Current/upcoming:

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

–House-Senate conference on farm bill continues with informal meetings of staffers

 

c.        2002 Schedule:

–As of Monday 11 Mar, there are 107 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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