Congressman
CHARLIE STENHOLM
17th District of Texas

AG TALK
By Charlie Stenholm
June 7, 2002

Senate Looking at Disaster Assistance

This week the Senate has been debating the supplemental spending bill, and there was an effort on the part of some farm state senators to use this legislation as a way to include emergency spending for agriculture.

The purpose of this supplemental spending measure should be clear from its name: the Supplemental Appropriations Act for Further Recovery From and Response to Terrorist Attacks on the United States.

Frankly, this legislation is a request from President Bush for additional spending for defense and anti-terrorism activities. 

Here in Congress, supplemental spending bills often become a target for additional add-on spending, and some farm state senators are trying to attach language to help farmers who are suffering through a multi-year drought. 

Senators from western states are trying to secure $2.45 billion in disaster aid from Congress for losses from last year’s drought. Senator Burns of Montana is trying to get $1 billion for drought-stricken farmers. Unfortunately he is proposing to cut the new conservation and rural development programs we just passed in the new Farm Bill to pay for this assistance.

During Senate consideration of the Farm Bill this past February, the Senate had voted 69-30 to provide $2.45 billion for emergency spending, however this provision was removed from the bill during the House and Senate Farm Bill conference. 

There is every indication the Senate will continue to push for natural disaster aid, however the leadership of the House has been cool toward the idea. 

The Bush Administration opposes emergency farm spending, and this week the White House’s Office of Management and Budget (OMB) issued a statement making this very clear. 

The OMB believes that the recently enacted Farm Bill provides an historically high level of agriculture spending that can accommodate funding for emergencies, economic assistance, rural development, and other purposes. 

President Bush has said that the 2002 Farm Bill breaks the bad fiscal habit of needing to pass emergency agricultural spending bills, including drought assistance and other supplemental payments.

The President believes that such spending in the past has made it difficult for Congress to live within its budget and has lead to uncertainty for farmers, ranchers and their creditors.

Keith Collins, USDA’s chief economist, said there are enough aid programs, from low-cost loans to a better crop insurance program, and enough additional money in the new Farm Bill that farmers should not need more federal aid. 

Collins also indicated that meteorologists are forecasting that the drought conditions across the Great Plains and the Rockies will likely continue this summer and will especially intensify in Texas, Idaho and Montana.

Farm Support Payments

Questions have been raised about when USDA will begin to distribute farm support payments.

USDA’s Farm Service Agency (FSA) is currently making the necessary preparations to send out the payments to eligible producers of farm commodities.

FSA service centers are putting together farmers’ acreage data. Producers will have a chance to revise this information once they receive it from FSA.

In anticipation of receiving these reports, producers would do well to begin compiling production records for FSA. The updated data will be used by FSA to calculate annual assistance for the various crops.

FSA Farm Loans

Some folks have been wondering about FSA farm loans. These won’t be available until after October 1, 2002, the beginning of the new budget year.

The funds for these loans are authorized by Congress through the annual appropriations process, not the new Farm Bill, and so producers won’t have access to such loans until the new budget year begins.

The previous farm law had limits that barred farmers from getting too many operating loans within a year, however under the new law the one-time waiver is good for two years. 

To be eligible, farmers must have a viable operation and they must have been denied an operating loan by two commercial lenders.

In addition, they must be unable to get a loan with an FSA guarantee, and they must have completed or agreed to complete a borrower-training program.

European Union Criticizes 2002 Farm Bill

The European Union’s agriculture commissioner has been very critical of the recently passed 2002 Farm Bill, saying that “farmers everywhere will suffer as a result of this bill.”

The commissioner believes that farmers in the European Union and developed countries will continue to face low world prices, and farmers in the US will continue to see their subsidy checks capitalized into land values and rental rates.

Well, the EU agriculture commissioner can criticize US support to our farmers and ranchers all he wants, but the US Government spends a fraction of what the European Union and Japan spend on subsidies for their producers. 

And the fact of the matter is US farm law doesn’t violate the trade rules of the World Trade Organization (WTO). 

There is a spending cap of $19.1 billion for U.S. agricultural subsidies, and the Secretary of Agriculture can adjust payments downward if subsidies exceed the caps. The secretary can also reclassify domestic payments in order to avoid hitting the WTO limits. 

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