When House-Senate farm bill conferees convene, possibly today, Rep. Jerry Moran, R-Kan., is preparing to offer a highly controversial amendment to trim the increases in target prices and loan rates for commodities and use the money to eliminate any cut in the direct payments that farmers get whether prices are high or low.
Scheduling for a farm bill conference is on hold until CBO completes its scoring of the latest provisions of the negotiators' agreement, but Senate Agriculture Chairman Tom Harkin intends to hold one this week, a Harkin spokeswoman said Wednesday.
The spokeswoman also said Senate leaders were consulting members to see if any objections would be raised to a two-week extension of the 2002 farm bill. Sen. Larry Craig, R-Idaho, who objected to the last two extensions until Harkin explained the progress that had been made, said on the Senate floor late Wednesday he does not plan to object to this extension. Craig praised the conferees for making "great progress."
The latest farm bill agreement would trim the $5.2 billion direct payments program by a total of $313 million over three years. The bill also raises target prices and loan rates for most crops grown in northern states such as wheat, soybeans and canola.
Moran told the National Association of Farm Broadcasters Wednesday he is "advocating for the preservation of direct payments."
During periods such as now when commodity prices and production costs are high, direct payments are more helpful than the target prices and loan deficiency payments, which are triggered when prices drop, Moran said.
He noted that direct payments, which farmers are allowed to use to plant any crop except fruits and vegetables, are considered most compliant with World Trade Organization rules that subsidies do not distort production toward any crop.
The American Farm Bureau Federation is supporting Moran's amendment, but the National Farmers Union, the American Soybean Association, the National Barley Growers Association, the National Sunflower Association and the U.S. Canola Association oppose.
Farm Bureau President Bob Stallman said in a letter to conferees that producers are likely to get more benefits from direct payments because CBO estimates that prices of many commodities will remain high over the coming years, which would mean countercyclical farm programs will not be triggered.
The opposing groups said in their letter to conferees that Moran's amendment would upset the "delicate balance" that has been struck in the farm bill's programs.
The new target prices and loan rates "reconcile disparities in marketing loan and target price levels between various commodities that have distorted planting decisions under the 2002 farm bill and will provide more equitable income support to producers of these commodities during periods of low prices, compared to producers of other crops," they said.
Moran's plan has raised the ire of Democrats. Rep. Earl Pomeroy, D-N.D., said if Moran offers his amendment he should expect amendments "en masse" that he will not like.
"I'm as upset by Moran as anybody. He is on my list. He doesn't need to go through all these theatrics on the farm bill," House Agriculture Chairman Collin Peterson said.
Meanwhile, details of the agreement began to leak out. A Senate aide said the dairy promotion assessment on imported dairy products that was in the House bill was not included in the final version.
The negotiators' agreement on farm subsidy payment limits announced Wednesday produced negative comments from the Bush administration and a key reform advocate.
"This plan would result in continuation of farm subsidy payments to individuals with extremely high incomes. This is not reform and does not move Congress closer to a farm bill that the president would sign," Deputy Agriculture Secretary Chuck Conner said in a statement.
Ferd Hoefner of the Sustainable Agriculture Coalition said: "This is an anti-reform bill. It is not even close to the same ballpark as the Bush proposal. If they sign off on this, the White House will have sold reform down the river."
Senate Agriculture ranking member Saxby Chambliss told the farm broadcasters that under the new payment limits his Georgia farmers "are not going to be fine, but they're going to be OK."
This article appears in the May 3, 2008, edition of National Journal Daily.