Congressman
CHARLIE STENHOLM
17th District of Texas

AG TALK
By Charlie Stenholm
March 1, 2002

Farm Bill Action

With the Senate having finally passed their version of a farm bill, preparations are under way between the House and Senate to prepare for a conference to work out the differences between these two very different pieces of legislation.

The Senate version is more than 1,300 pages long, compared to less than 400 pages in the House bill, and this conference is not going to be an easy one.

The House version of this bill seeks to improve the competitiveness of American farmers and ranchers, strengthen the rural economy, and preserve and protect environmental resources.

It also attempts to provide adequate nutrition to Americans in need, expand markets, promote food security abroad, and continue to ensure an adequate supply of safe, affordable food and fiber for the nation.

On February 28, House conferees were appointed to manage the conference committee and oversee the passage of the bill.

As the ranking member of the House Agriculture Committee, I was named a conferee, and I look forward to beginning negotiations so that we can complete a farm bill as soon as possible.

The big question everyone is asking these days is just how long it will take to complete a farm bill. Estimates range from three weeks to six months.

My own preference would be to complete the farm bill by March 22 and have it at the White House for the president’s signature by Easter.

It is my hope that we will have a new farm bill by the March 22 Easter recess, but the completion time is difficult to predict.

Among the major differences that must be resolved are the following: payment limitations, the duration of the farm program, and how much money will be directed toward conservation and nutrition versus crop production.

The House version caps farm subsidy payments at $550,000, whereas the Senate bill places a limit at $275,000.

The House bill renews farm programs through 2011 with a ten-year bill, while the Senate bill renews programs through 2006.

Last year’s budget earmarked $73.5 billion in additional agriculture spending over the next ten years.

While the House bill spreads this amount evenly over ten years, the Senate farm bill spends 61% of this amount in the first five years.

The White House would like to see an even level of spending over this ten-year period and prefers the House bill.

While the House farm bill would spend more for commodity support, the Senate bill proposes to spend more on conservation and nutrition programs.

Another issue that must be resolved is a Senate provision that would ban packer ownership of livestock 14 days prior to slaughter.

The administration has still not taken a position on some of the controversial issues in the Senate bill and, hopefully, they will establish a clear position in the near future.

USDA Financial Report Paints Positive Picture

According to USDA’s latest agricultural income and finance summary, farmers and farm lenders are in better financial shape than some folks had originally thought.

The report does not take into consideration any of the additional federal payments that farmers will receive as a result of a 2002 farm bill, indicating that the financial picture this year could be even better than expected.

Between October 1998 and August 2001, Congress has enacted emergency farm assistance legislation five times to increase farm spending.

The House and Senate farm bills would add at least $7.35 billion to spending for this year, and the Senate bill includes an additional $2.4 billion in disaster payments.

There could also be some other good news for the U.S. farm industry by way of increased trade with China.

According to USDA’s Economic Research Service, China’s admission to the World Trade Organization should boost the U.S. farm economy by about $800 million annually through 2009.

In addition, U.S. agricultural exports should increase by $1 billion per year.

U.S. Producers Losing Out on Sales to Cuba

On the subject of U.S. trade potential, more news has been released about the impact of the U.S. trade embargo that was imposed on Cuba more than forty years ago.

U.S. producers are losing up to $1.24 billion a year in potential export sales as a result of the economic sanctions that have been in place against Cuba, according to a report released by the Cuba Policy Foundation.

The report was prepared with the assistance of two Texas A&M agricultural economists and indicated that the overall U.S. economy is losing an additional $3.6 billion per year in related economic input as a result of the embargo.

Cuba has a population of just over 11 million, and its close proximity to the U.S. would mean lower transportation costs, providing an advantage for U.S. producers.

Although exports of food were exempted from the Cuba embargo in late 2000, no public or private U.S. financing was allowed for the sales. The Senate farm bill would overrule that prohibition and allow private financing.

The livestock, grain and cotton states, including Texas, would benefit most from sales to Cuba. Stay tuned for further developments in this area.

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