Congressman
CHARLIE STENHOLM
17th District of Texas

Ag Talk
By Charlie Stenholm
April 26, 2002

House and Senate Conferees Complete a Farm Bill

After many weeks and long hours of negotiations, I am pleased to report that House Members and Senators working on the farm bill finally reached agreement on a six-year farm bill package.

This legislation, that sets the nation’s farm, conservation and nutrition programs, will replace the 1996 Freedom to Farm Act that will expire this fall.

For those of us working directly on the farm bill conference, it has been a long and difficult process.

And I know it has also been frustrating for the folks in farm and ranch country who have been waiting on Congress to make decisions that will affect their future livelihoods.

While I am pleased that we were finally able to work out a compromise agreement with our Senate colleagues, I can’t help but recall the wisdom of a very old saying: "The two things you don’t ever want to watch being made are sausages and laws!"

Among the most difficult issues to resolve with the Senate were loan rates for commodities, payment limitations on farm subsidies, mandatory country-of-origin labeling, and the ban on packer ownership 14 days prior to slaughter.

While the House wrote a ten-year farm bill, the Senate wrote a five-year bill. In the end, we compromised with a six-year farm bill that will expire in 2008.

The new farm bill increases loan rates for major crops and revives a target price system that had been abolished by the Freedom to Farm Act.

As a result of the new farm bill, total agriculture spending will be increased by about $7.4 billion a year, an increase of 70 percent.

With this new bill, the House and Senate basically agreed to increase crop subsidy spending by about $4.8 billion per year.

Under the new legislation, conservation spending will be increased by 80 percent and includes a new so-called Conservation Security Program (CSP) that its supporters say will encourage farmers to adopt better conservation and environmental practices.

On the subject of country-of-origin labeling, the final bill includes a requirement that meat, fish and produce be labeled with the country of origin, beginning in two years.

The original House bill had included a labeling requirement on fresh fruits and vegetables only.

A number of us in the House had strong reservations about country-of-origin labeling and the burden it would impose on the nation’s food industry.

It is worth noting that cattle feeders asked that animals that had been in the United States for 100 days be allowed to be labeled as U.S. beef.

However, a spokesman for the Independent Cattlemen’s Association of Texas indicated that their producers didn’t want that and considered it a slap in the face to the cow-calf producers.

And while a group of western ranchers had been strongly promoting country-of-origin-labeling, a spokesman for that group said that putting a "USA" label on cattle that have been in the country only 100 days would be unacceptable and misleading to consumers.

This group believed that the 100-day rule was being pushed to address the current flow of Mexican feeder cattle into the U.S. and that the number of these cattle coming into our country could possibly double or triple.

This whole notion of food labeling sounds good to some folks, but we may be moving into a slippery slope here with excessive regulation and paperwork that will impose unreasonable burdens on our food processing industry.

This is an issue that the House Agriculture Committee will be carefully looking at in the very near future.

Regarding the ban on packer ownership 14 days prior to slaughter, the final compromise eliminated this provision altogether. This is not to say that Congress won’t be looking into this matter in greater depth in the near future.

The new farm bill will bring about a number of significant changes in the provisions affecting peanuts, dairy and conservation programs.

The peanut program, for example, will move from an import quota system to a more market-oriented marketing loan program.

While this change will be costly in the short term, it will ultimately save the government money in the long run.

The dairy industry will end up with a national counter-cyclical program that would trigger direct payments to dairy producers when the Boston Class I milk price falls below $16.94 per cwt of milk.

On the subject of payment limits, the Senate had originally wanted a cap of $275,000 per year, a level that would have hurt a number of cotton and rice producers.

House and Senate conferees settled on an annual limit of $360,000 per year, however these payment limits will not apply to 2002 crops.

The new law also makes unlimited use of generic certificates for marketing loan gains.

Regarding the timing of this farm bill, it has been my goal all along that an agreement could be reached in time for the 2002 crop year. USDA officials have indicated that it could take at least four months to implement certain portions of this measure.

The full House and Senate must still approve the conference report before it can be sent to the president to be signed into law.

There is another factor that folks need to be keeping in mind, however, and that is how Congress and the administration will pay for all of the provisions in the farm bill if the U.S. continues deficit spending.

If Congress and the White House fail to return the budget to a surplus situation in the next few years, Congress may be forced to cut back on some of the new farm bill provisions. This will be especially true if the prices for commodities do not rise significantly.

More information will follow in the days ahead.

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