Copyright 2002 Globe Newspaper Company The Boston
Globe
April 2, 2002, Tuesday ,THIRD EDITION
SECTION: BUSINESS; Pg. D1
LENGTH: 1241 words
HEADLINE:
ELECTION-YEAR FIGHT FOR CONTROL OF CONGRESS SPURS FARM-BILL
PUSH GOP, DEMOCRATS SEE GAIN IN APPROVAL OF SUBSIDIES
BYLINE: By Sue Kirchhoff, Globe Staff
BODY: WASHINGTON - Political control of Congress is
directly tied to the size of federal farm subsidy checks.
That simple fact explains why both parties are fighting so hard to pass
a new farm bill edging the government away from a brief,
free-market experiment in agriculture and back toward guaranteed subsidies
rooted in the Dust Bowl and Great Depression of the 1930s.
While only about 2 percent of Americans live on
farms, some of this year's most endangered Senate Democrats hail from states
that would gain from the whopping $73.5 billion increase in farm aid Congress is
considering - South Dakota, Iowa, Minnesota, Montana, and Missouri. Since
Democrats control the Senate 50-49, with one independent, James Jeffords of
Vermont, any of those contests could tilt the balance.
"They have to get something for the agriculture community," said
Jennifer Duffy, who tracks Senate races for the Cook Political Report.
Failure to get a bill could hurt incumbents such as Iowa
Democrat Tom Harkin, chairman of the Senate Agriculture Committee. Harkin is
under attack from Republican Representative Greg Ganske. Ganske, a doctor, is
himself in a primary battle against a farmer.
"If
nothing comes out of this, that's a huge downside because then you could start
talking about Democratic gridlock. It takes on that bigger partisanship issue,"
Duffy said
But there are pressures on both parties.
President Bush initially opposed lawmakers' calls for the $73.5 billion, 10-year
increase in spending. He relented not only to help candidates, but to secure
crucial votes for his $1.35 trillion tax cut and a bill giving the White House
more power to negotiate international trade deals.
Then
there is the personal element. The White House is doing all it can to defeat
South Dakota Democratic Senator Tim Johnson - a close ally of Senate Democratic
leader, and fellow South Dakotan, Tom Daschle. Bush personally recruited GOP
Representative John Thune - whose campaign Web site is decorated with grain
stalks - in the most bitterly fought race in the country.
"It's an incredibly contentious race of great attention virtually more
of a battle between Bush and Daschle," said Brad Redlin of the Center for Rural
Affairs in Walt Hill, Neb. "Farm issues are primary."
The agriculture debate didn't arise because of the election; Congress
rewrites farm policy every five years. But the political stakes give it far more
punch.
In 1996 a divided Congress voted to "deregulate"
farming by ratcheting down subsides and moving farmers toward export markets.
Then prices tanked. Five years, four emergency bills and $30 billion in disaster
payments later, both parties are focused on a more traditional policy of
guaranteed aid, though without the rigid planting controls of past years.
The House and Senate are thrashing out a $170 billion
10-year scheme that could deliver higher payments to milk producers in 12
northeastern states. Conservation funding would rise 80 percent, helping
preserve green space in New England.
Still, the bulk of
funding will go to producers of crops like corn, cotton, and wheat who will see
crop subsidies rise dramatically.
Peanut producers who
for decades have operated under a "temporary" quota system would get a new loan
program - and the government would pony up more than $1 billion to compensate
current quota holders. (Boston-based John Hancock Financial Services is one of
the nation's largest peanut quota holders. Critics say such
policies have led to a vicious circle of overproduction, inflated land values,
and low prices. Most subsidies go to big producers, rather than small, family
farms.
"The momentum is to do business as usual and
provide the biggest part of the funding to the biggest operators who've been
getting it all along," said Ken Cook of the Environmental Working Group.
His group has posted federal data detailing how much money
individual farmers get from the government - a move that caused consternation in
farm country. From 1996 to 2001, 10 percent of recipients got 69 percent of all
subsidies.
Farm programs are politically and
economically entrenched in areas like the Great Plains, which gets more federal
aid per capita than any other part of the country. Public attention was focused
on Congress's recent economic stimulus package, but agriculture supports are far
more vital in some regions.
"I have never had as many
phone calls from lenders saying we're not lending because [growers] don't have
cash flow without farm payments," said Mary Kay Thatcher, lobbyist for the
American Farm Bureau Federation.
Given the dwindling
federal budget surplus, banks are no longer confident Congress will continue to
step in with annual emergency aid, if negotiations on a long-term bill fail.
Lawmakers argue that subsidies stabilize an industry that
faces volatile weather, unpredictable markets, and has been in a multiyear
recession. Prices for some crops such as soybeans and cotton have fallen to
30-year lows since the 1996 farm bill, while farmers have also
been hurt by bad weather. Without federal aid, farm income would have been at
the lowest levels since the farm crisis of the mid-1980s.
"All I hear is disaster assistance. Montanans need disaster
assistance," said Democratic Senator Max Baucus - a prime target of Republicans
- whose state has suffered from prolonged drought.
There is agreement on the general direction of the bill, but deep
divisions on specifics. The Senate wants to slap a $275,000 per-farm cap on
subsidies - a lower ceiling than the House wants. That has provoked a regional
fight. Midwest grain farmers wouldn't take too big a hit, but southern producers
of crops like cotton and rice, which have higher production costs, would.
Another divisive Senate proposal, sponsored by South
Dakota's Johnson, would limit livestock ownership by the meatpacking industry.
Many small ranchers complain packers have near-monopoly control.
Virginia-based Smithfield Foods, the nation's largest meat processor
has run full-page newspaper ads against the plan, threatening to shut down a
South Dakota plant that provides 3,200 jobs. Another 3,000 associated jobs could
be lost.
"The farm bill is a big deal
in South Dakota. Our economy has been diversified a lot in recent years, but
agriculture is still the issue that drives [it]," said Johnson.
Thune, has sponsored a less sweeping version of the packing
restrictions.
"The Senate has kind of lagged behind. I
don't know exactly where the leadership of the Senate is right now" on some key
issues, said Thune chief of staff Jafar Karim.
Bush has
been stumping in farm country as he tries to help Republicans win the Senate.
He traveled to Aurora, Mo., in January to talk agriculture
and appear with Republican James Talent, who is challenging Democratic Senator
Jean Carnahan.
Bush will travel to Iowa next month to
stump for Ganske in his race against Harkin.
Harkin is
torn between competing constituencies and has been forced to retrench due to a
$6.1 billion accounting error by the Congressional Budget Office that put his
bill over budget. Though the mistake wasn't his fault, he didn't help himself by
saying it amounted to little more than "pencil dust" in the overall budget.
"You know what, $6.1 billion is more than the entire state
of Iowa budget," Ganske said.
Sue Kirchhoff can be
reached at kirchhoff@globe.com.
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