Ag Policy Update–1 MAY 02 –SPECIAL       

(Sunup Program to be aired 2 MAY 02)

 

 

 

1.     The Conference Report on a new farm bill is finally on its way to the House and Senate for final approval.  Give us a brief summary.

 

–The Food Security and Rural Investment Act of 2002 is a 6 year bill, spending about $17 billion/year on commodity programs that will cover 2002 crops

–Conservation programs get about $17 billion for the six years, including a new Conservation Security Program.

–Participating producers will have the option of updating base acres and yield.

–Payment limitations have been cut to $360,000, but the 3-entity rule is maintained.

–There will be a new national dairy program, loan programs for wool, mohair, honey and pulse crops.

–The peanut program will be changed to conform with other commodity programs, and a quota buyout will be used for compensation.

–Trade programs are maintained or expanded.

–Nutrition programs are expanded, restoring benefits to many legal immigrants.

–Rural development programs will receive over $1 billion to maintain programs and implement new opportunities for broadband and rural initiatives.

–Country of origin labelling guidelines will be issued for a 2 year voluntary program for meat, fish, fruits, vegetables and peanuts, with a mandatory program set to begin in 2 years.

2.     All week we have been hearing reaction from various groups.  So who do you thing are the big winners under this latest legislation.

 

–Producers who have been relatively pleased with support over the past 6 years, will generally be pleased with the new bill.

–Livestock producers can look forward to ample grain supplies at relatively inexpensive prices.

–Organizations that have voiced support include:

–NCBA

–NPPC

–NCGA

–AFB

–NAWG

–OFU

–Secretary Veneman indicated support for the compromise.

 

3.     So Larry, on the flipside, undoubtedly many are upset. Who are the losers?

 

–Those who were seeking major reform were very disappointed.

–This included an odd mix of fiscal conservatives, environmentalists, small to mid size producers, and world trade competitors.

 

–Sen. Lugar (R-IN) perhaps stated the frustration of the losers best, and conceded the battle for a future time:

 

“Nor did the conference committee agree with my arguments against incentives for over-production or in favor of a much more comprehensive sharing of payments across all farms....

“Reforming agriculture policy is not a subject that excites the American public, the vast majority of which will pay for the subsidies and receive very little benefit.  The disclosures made ... of how most farm subsidies go to a few wealthy farmers added significantly to the public debate and create and important framework for future debates.”

 

 

 

4.     So, what’s the timeline?  Will we have a new farm bill soon?

 

–The Conference Report has been sent to the House and Senate.

–Both will likely vote within the next week.

–The President will likely sign by mid-to-late May.

–So, we should have a new bill this month.

–Secretary Veneman, however, indicates it will be several months before the 2002 program checks are in the mail.

5.        Other policy-related news:

 

a      Bush continues to push Congress to act this month on TPA.  It is unclear, however, if the Senate will act.  The energy bill seems to be taking up most of their time.  Most farm groups have indicated support for TPA, while the NFU has made public statements this month formally opposing TPA.  Labor and environmental groups also have concerns.  The hold up in the Senate relates to attempts to pass TPA with strings to link talks to labor and environmental standards, as well as compensation for those harmed by trade ageements.

 

6.        Congress:

 

a.        Recent activity:

–House-Senate Conference Committee on farm bill completed

 

b.        Current/upcoming:

–House & Senate votes on new conference farm bill

–House and Senate Budget & Appropriations Committees working on budget resolution and the beginnings of appropriations process.

 

c.        2002 Schedule:

–As of Monday May 6, there are 79 working weekdays in Washington this session.

27 May-2 Jun        Memorial Day Break

1-7 Jul                Independence Day Break

5 Aug-2 Sep        Summer Break (Senate)

29 Jul-3 Sep        Summer Break (House)

16 Sep                Yom Kippur

–Target adjournment 4 Oct

–5 Nov is Election Day

 

d.        Key issues:

–Trade Promotion Authority

–New farm bill

–Bioterrorism & homeland defense

–Healthcare reform

–Prescription drug benefits

–Merger activities, especially in agriculture

 

 

 

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