Local & State Headlines

Accord reached on '08 farm bill

• Congressional leaders agree on farm legislation, but the president may be hard to convince.

Jim Hendricks

WASHINGTON — Lawmakers have put what they hope are the finishing touches on a new five-year, $300 billion farm bill, but it’s still up in the air as to whether the true final touch will happen — President Bush’s signature.

Key negotiators in the Senate-House Farm Bill Conference Committee announced Thursday afternoon that they had reached an agreement on the package that would set law for U.S. farm production and nutritional programs. Leaders on the joint committee are now expected to seek signatures from the other members of the panel this week on the compromise bill.

In late February, Bush sent lawmakers a letter outlining problems he had with the farm legislation, including a disagreement he has with lawmakers over the cost of funding the bill. The administration contends Congress is using budget gimmicks to cloak the true cost of the legislation.

U.S. Sen. Saxby Chambliss, R-Moultrie, ranking minority member on the Senate Agriculture Committee, said Thursday, however, that the accounting methods being employed pass muster. While every reform the administration has demanded hasn’t been met, lawmakers clearly moved toward the president’s positions, he said.

“What we have sought to do in a very bipartisan way is to move as close to the president’s positions and concerns as we could without compromising the overall safety net (to farmers),” Chambliss said. “At the end of the day, I don’t know what the president’s going to do.

“He’s never directly told me that he’s going to veto this bill, although, being very honest with you, from the comments I’ve heard both from him and from members of his staff, there’s not a great likelihood he’s going to sign it, so we’ll just have to see.”

Chambliss said the bill’s 13 commodity titles mirror much of what was in the 2002 farm bill that has been temporarily extended several times while details of the ’08 bill were being ironed out.

The largest expenditure by far is for nutritional programs, the senator noted. The nutrition title comprises more than 65 percent of the spending in the total bill, including $10 billion is new spending for nutrition assistance and food-aid programs. Included is $1 billion for Chambliss’ Food Stamp Savings and Investments Act, which exempts IRS-approved retirement and education savings accounts from countable assets of participants, and $1.2 billion in new funding for food banks.

Meanwhile, spending on “traditional” farm commodity programs makes up less than 14 percent of the cost. In the ’02 farm bill, 28 percent of the spending went to those commodity titles.

The bill also reduces the incomes allowable for participation in the subsidy programs. Non-farmers — those who don’t actively participate in agriculture production on their land — would not qualify for programs when their income reaches $500,000. For farmers, the cutoff point for direct payments is $750,000, though that number rises to $1.5 million for married couples who farm. The current cutoff is $2.5 million.

In addition, Chambliss said, the “three-entity” rule has been eliminated. “Instead of that farmer being entitled to three different payments, now that farmer is going to be limited to one,” he said. “He will have the benefit of having his wife available for farm payments if she is engaged in the operation, but that is major.

“We’re moving from $2.5 million to $750,000. Now if that’s not considered major (change), I don’t know what would be. ... We have made huge, huge changes and reforms in the payment limit provision.”

Don Koehler, executive director of the Tifton-based Georgia Agricultural Commodity Commission for Peanuts, said the ’08 farm bill has been a “long, tedious process” that is seven months overdue. But, he said, the wait may have been worth it.

“I’m glad they took the time they did to get as good a farm bill as they could,” he said.

Chambliss’ office said the bill maintains a separate title for peanuts, a major crop in Southwest Georgia, and preserves target price, direct payment rate and marketing loan rate from the ’02 bill. In addition, there is a mechanism to ensure handling and associated costs aren’t deducted from a producer’s loan rate, maintains separate payment limits for peanuts and includes a conservation incentive for producers who move toward optimal crop rotation practices.

“This conservation program, we were really trying to push for that,” Koelher said. “It should be some benefit not only to our farmers, but a benefit to both environmental (concerns) and sustainability of agriculture in general.

“We’ve got to continue to move in that direction. It’s a little bit different concept than previous farm bills, but the thing we’re going to continue to see as we move in the future is the traditional price support kind of farm bills might be more and more difficult to write and get done.”

While Bush’s unhappiness with the farm package is well documented, Koehler expressed optimism that he would eventually sign it.

“I’ve got to believe that somewhere along the way they’ve done about what they could do and the president’s going to have to give some, too,” he said. “I’m going to trust that, at the end of the day, he looks at it and he feels there’s enough of what he calls reforms in the program to actually go ahead and sign it.”

Koehler said the new income rule limits for direct payments likely would not impact many south Georgia growers.

“I want to see how they calculate it first,” he said. “It’s our understanding that’s going to be adjusted gross income. If it’s adjusted gross, then probably it’s not going to have a major impact. If it’s just total income, you know it’s not unusual for farmers to sell $1 million of something, but that’s not all profit. There’s a lot of costs and our costs have continued to escalate.”

Those production costs are eating into the high prices farmers are receiving. Koehler said he was told by a farmer Thursday that his cost for off-road diesel fuel needed to power irrigation system was at $3.50 a gallon. He noted that other inputs are up as well, such as dimonium phosphate, a fertilizer used to replenish phosphorus in the soil. That fertilizer has skyrocketed in cost, from less than $400 a ton three years ago to the current rate of more than $1,300 per ton.

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