By DAVE BLOWER JR.
Farm World Editor

WASHINGTON, D.C. — USDA Secretary Ed Schafer said recently that the farm bill agreed upon by the joint House-Senate committee last week will be vetoed by President Bush if it remains unaltered.
“This legislation lacks meaningful farm program reform and expands the size and scope of government,” Schafer explained. “I have visited face to face with our President and he was direct and plain. The President will veto this bill.”
The latest farm bill agreement is a five-year, $300 billion compromise, which is about $20 billion more than the Bush Administration was wanting. Schafer said the American public also wanted more control on subsidies for larger farms.
Married couples with joint incomes of up to $1.5 million from their farm could qualify for crop subsidies under this bill. In some cases, farm couples with incomes of $2.5 million or more may also qualify as long as $1 million is from other, non-farm sources.
“At a time of record farm income, Congress decided to further increase farm subsidy rates, qualify more people for taxpayer support, and move programs toward more government control,” Schafer said. “We should not remove farm commodities from market forces and make them dependent upon government support programs.
“Americans appreciate our farmers and ranchers and understand the uncertainties and risks that farming presents. However, they do not understand why their taxes should be used to provide payments to individuals with adjusted gross incomes of $500,000 and higher, some of the wealthiest people in America.”
Most farm groups, on the other hand, are eager for the President to sign the bill.
The American Farm Bureau Federation (AFBF), the National Farmers Union (NFU) and the National Corn Growers Assoc. (NCGA) are just three of the groups urging support for the compromise farm bill.
“The bipartisan farm bill package strikes a key balance,” said AFBF President Bob Stallman. “The bill continues to provide a basic, no frills safety net for America’s farmers and it increases support for hungry Americans and the environment.
“We are disappointed that President Bush intends to veto this bill. It has broad national benefits, reform in farm programs and is fully paid for via offsets that everyone agrees are acceptable.
“No farm bill ever is perfect, but this bill includes substantial reforms. Members of the conference committee did an outstanding job of addressing the administration’s concerns regarding financing. Moreover, in spite of a cut in the cornerstone support offered by direct payments, this is a good, solid bill for American agriculture, American consumers and the environment.”
A permanent disaster assistance program, a top NFU farm bill priority will be included in the bill, lauded NFU President Tom Buis. “We know a disaster is going to happen, each year, in some area of the country,” he said. “It only makes sense to have a program in place to confront the challenges presented by Mother Nature.”
The farm bill will make record investments in nutrition, conservation, specialty crop, renewable energy and rural development programs. Lawmakers were able to make these increases in spending while keeping the current farm bill’s strong safety intact.
“While it is referred to as the farm bill, a majority of the bill’s spending is for nutrition programs to aid those less fortunate. As a farmer, I find it appalling that anyone goes to bed hungry. The farm bill’s nutrition programs will ensure that doesn’t happen,” Buis said.
Mandatory country of origin labeling (COOL) and interstate shipment of state inspected meat will also become law. NFU played a pivotal role in reaching a compromise on both measures. The bill also includes improvements to the dairy safety net and a strong competition title.
The NCGA said the bill provides a market-based revenue counter-cyclical support program for U.S. farmers.
“After three years of hard work on the part of our growers and our staff, we’re happy to see that the conference committee preserved the new Average Crop Revenue Election (ACRE) program,” said NCGA President Ron Litterer. “We urge Congress to avoid delays and move forward for passage, and we urge President Bush to take a fresh look at the reforms in this legislation that work for the farmer and the American consumer alike.”
The optional ACRE program addresses the increasing levels of risk farmers face with a safety net that offers more reliable protection against crop losses and against increasingly volatile commodity markets. In exchange for a 20 percent reduction in direct payments and a 30 percent reduction in loan rates, producers will be able to enroll in this state level revenue counter-cyclical program.
Modeled after legislation introduced by Sen. Dick Durbin (D-Ill.) and Sen. Sherrod Brown (D-Ohio) last summer, ACRE will provide participating farmers beginning in 2009 a state revenue guarantee on acres planted equal to 90 percent of the product of a state average yield factor times the national season average price for the previous two years for the commodity.
Schafer countered, “This program represents a return to outdated farm policy and questions the government’s investment in crop insurance which was designed to protect farmers against low commodity prices and crop failures. This action will discredit farm programs and jeopardize public support for future farm bills.”
Sallie James, a policy analyst with the Cato Institute’s Center for Trade Policy Studies, said the farm bill proposal contains little in the way of serious reform.
“It makes minimal cuts to farm subsidies and in fact adds a new ‘permanent disaster’ program on top of the existing hand-outs to farmers,” James said. “The conferees did make some small cuts to subsidies by introducing a slightly tighter means test, but only for the type of support least offensive to our trade partners and least market-distorting. Some commodities saw an increase in their target prices, so taxpayers would be on the hook for even higher subsidies if prices fall.
“The conference committee also introduced a new ‘feedstock flexibility program’ for bioenergy, which would require the federal government to buy sugar and sell it to ethanol plants.
“So, while managing the domestic market for sugar and keeping prices high for consumers, taxpayers would have to purchase sugar, which the USDA estimates would be sold at a loss.”
James is co-author of Freeing the Farm: A Farm Bill for All Americans.