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Farm Bill Talks Stall Over Loan Rates, Subsidy Caps

posted on April 19, 2002


On Thursday, in a non binding vote, the U.S. House endorsed a 275-thousand dollar limit on the amount of federal agricultural subsidy recipients can harvest in a single year.

Last fall, the House passed a measure that provided no limits to federal payments. Supporters say the vote shift is evidence of the growing sentiment to contain outlays for farm subsidies.

Proponents of the limitations believe reducing the flow of government dollars to corporate agribusiness will right the macro-economic balance in Rural America and ease the pressure on smaller farms.

That opinion is not shared by the House members on a joint House-Senate conference committee that is trying to hammer out differences in the farm bill. But payment limits are only part of the fuel for a prolonged committee stalemate.

 

Farm Bill Talks Stall Over Loan Rates, Subsidy Caps

Weeks of publicly civil discourse between negotiators broke down as differences between House and Senate conferees boiled over.

Chief among the disputes is where to set loan rates for corn and soybeans. According to sources, the Senate wants a federal corn loan rate of $2.00 a bushel, while the House prefers a rate of $1.95 a bushel. The current rate is $1.89.

For soybeans, the Senate wants the loan rate set at $5.12 a bushel, while the House wants a rate of $4.97 a bushel. The current rate is $5.26.

The loan program is closely watched by the markets as an indicator of future supply. It's also a key source of short-term financing for many farmers … and is used by some to get credit to plant and market crops.

In addition to the loan rate squabble, lawmakers are trying to sort out differences over the amount of money farmers can collect in government subsidies each year … a new dairy subsidy program …and a ban on meatpacker ownership of livestock.

Private talks among top conferees were aimed at sustaining negotiations. But the breakdown in talks has led two Republican lawmakers to propose separate one-year bailout packages worth about $7.35 billion. One of them, Senator Pat Roberts of Kansas, said it's too late to pass a farm bill that will apply to the 2002 crop year. But House Agriculture Committee Chairman Larry Combest said such a bailout should be considered only when there's no other option.

Congress has approved similar bailout bills every year since 1998 to compensate farmers for a steep decline in grain, cotton and soybean prices.

 


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