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Commodity Groups Quarrel Over Future Farm Bill

posted on September 22, 2006

Hello, I'm Mark Pearson. If you're thinking about borrowing some money, the Federal Reserve probably did you a favor this week. On Wednesday, the Fed opted to leave the interest rate that banks charge each other, at 5.25 percent. That means the rates for millions of consumer and business loans will remain at 8.25 percent. The decision pushed the Dow within 100 points of its all-time high set in January of 2000. But the rally was short-lived. On Thursday, the Federal Reserve Bank of Philadelphia reported that regional manufacturing activity fell into negative territory for the first time in more than three years. Investors reacted bearishly to the news and the major indices trended lower for the rest of the week. The volatility was viewed by some as emblematic of a fragile economy. Those who live and work in farm country know all too well about economic weakness. Often the rural economy is buffeted by the winds of change thousands of miles away. This week, Congress heard from rural interests concerned about looming reforms in domestic farm policy.

Commodity Groups Quarrel Over Future Farm Bill

Rep. Bob Goodlatte, R – Virginia: "We will have to be creative in how we approach the next farm bill to ensure that all involved in American agriculture are equipped with what they need to be successful."

On Wednesday, representatives of virtually every major commodity group shared their concerns about the next farm bill with the House Agriculture Committee.

With the current round of world trade negotiations in limbo, the witnesses were split on the future of farm policy.

While wheat and corn growers called for a new farm bill, cotton and rice producers lobbied for an extension of the current law.

Paul Combs, Chairman, USA Rice Producers Group: "With the need for a strong safety net as part of U.S. farm policy, the U.S. rice industry supports extending the 2002 farm bill until a WTO trade agreement is negotiated and approved by Congress."

Representatives from the USA Rice Producers and the National Cotton Council argue that the United States must position itself with a strong bargaining chip in future WTO negotiations. They argue that a reduction in U.S. subsidies in the 2007 farm bill would undercut U.S. trade negotiators.

Allen Helms, Chairman, National Cotton Council: "…it is clear that the next farm bill must allow the United States to negotiate from a position of strength."

Leaders from national corn and wheat associations called for a new farm bill and criticized the demand for an extension.

Dale Schuler, President, National Association of Wheat Growers: "We do not believe our members can be satisfied with an extension of this farm bill. We need improvements and we need it now."

National Wheat Growers President Dale Schuler told lawmakers to "level the current economic and trade environment" for American farmers. Schuler laid blame on U.S. trading partners for distorting the global marketplace through high domestic supports.

Echoing the calls for a new farm bill, National Corn Growers President Gerald Tumbleson offered a proposal to overhaul the way crops are subsidized.

Gerald Tumbleson, President, National Corn Growers Association: "This revenue-based proposal will replace the marketing loan and counter-cyclical programs and would directly target support to producers that have a revenue loss."

The revenue-based proposal was met with skepticism from the American Farm Bureau Federation which prefers to extend the current farm bill.

Bob Stallman, President, American Farm Bureau Federation: "In the meantime, U.S. farm policy should continue to help level the playing field with assistance to America's farmers until trade negotiations achieve a more open world market."


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