Farmbill Update

Charles Benbrook (benbrook@hillnet.com)
Wed, 25 Oct 1995 08:26:20 -0400 (EDT)

People all around Washington are working on the shape of a
farmbill-budget compromise, which will have to emerge after the veto of
reconciliation. Enthusiasm is growing for Sec. Glickman's proposal to
re-direct a portion of the Freedom to Farm windfall-profits in years
(like this one) when larjet prices at at or near target price levels.
The final compromise is likely to split this amount -- which will be over
$2 billion this year, maybe way over -- somewhat equally between farmers,
conservation, and research/rural development. Some argue a portion
should go to deficit reduction. Another idea is surfacing -- targeting
the re-capture toward large farms, i.e. let mid-size and small farms keep
the extra money, perhaps having it placed in a farm-specific
"Conservation account" that the operator could draw on when participating
in any USDA water quality, cost-share, or integrated farm management program.

Another new issue is rapidly gaining prominence, pushed by
agribusiness coalitons -- scaling back the CRP faster than previously
envisioned to bring more land into production. Conservation groups are
working to assure that "early out" incentives are restricted to only
non-HEL land (cropland in the CRP with an EI less than 8), AND that the
money saved is kept in conservation accounts within the CCC (this assumes
that the CRP and EQIP are funded out of the CCC, as currently proposed in
most bills). There is ample land in the CRP that could come out early and
be farmed without excessive erosion if attention is paid, but this will
require diligence on conservation compliance, which some in Congress are
trying to weaken, as well as mechanisms to increase funding for other
conservation and cost-share programs that will help farmers use -- but
not abuse -- land that comes out of the CRP early. The public has
invested $20 billion in the CRP since 1986 and if this investment is
squandered in a rush to increase production ala early 1970's, the
long-term fall-out will be significant and negative.

Over the next two-weeks, the Repubs will finish their
reconciliation bill and send it to the President. People expect the veto
to happen in the first week of Nov., at which point serious and
high-level negotiations will begin in earnest. First hurdle will be a
new, short-term continuing resultion, including something on the debt
ceiling, to give the process another month. This will probably happen,
opening up the chance to re-write much of the budget, and marry all the
other farmbill titles with the reconciliation package. Hence, there is
ample time for some major new ideas and directions to find their way
into the final package. The role of the Admin. and the Secretary will be
greatly enhanced in the post-veto round, since in both the House and the
Senate, the final vote on the omnibus bill will require dems and repubs
to pass, since concessions to the Administration will cost the repubs
atleast a few dozen votes.