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October 19, 2001

Senate Ag Committee Resists Pressure to Adopt House Farm Bill

The House of Representatives adopted the Farm Security Act of 2001 on Friday, October 5, by a vote of 291-120. The approval came after representatives rejected a flurry of amendments including the Boehlert-Kind amendment to shift $19 billion dollars from commodity programs to conservation programs, and one to limit payments to $150,000-per-person on all crop based subsidies.

With the adoption of this farm bill legislation by the House, attention shifts to the Senate Ag Committee. This committee is being pressured to use the House bill as its base document, making adjustments, if necessary. The pressure comes from those who believe that the agricultural community needs to grab the additional $73.5 billion above the baseline that was made available in the 2001 budget resolution.

However, the authorizing budget resolution says these additional monies would be available only if the budget projections did not require dipping into the Medicare or Social Security Trust Funds. By early September, the slowdown of the economy and the tax cut had significantly reduced the surplus to what some were projecting to be a razor thin margin. In the aftermath of the events of September 11, the Medicare and Social Security “lock box” was not given a moment’s consideration as $40 billion was granted to New York for damage caused by the terrorists and for fighting the war on terrorism. Congress then voted $15 billion to bail out the airline industry. Billions more will undoubtedly be needed to execute the war against terrorism. And, the administration is talking about an additional economic stimulus package that could be as large as $100 billion. Undoubtedly the lid of the lock box will be wide open when all is said and done.

All of this spending leaves agriculture’s additional $73.5 billion in question. It would appear that the thinking in the House is that agriculture better make its claim as quickly as possible before the lock box is closed again or a cap is put on the deficit. Judging from statements by Sen. Richard Lugar, the leadership of the Senate Ag Committee sees things quite differently. As a result the Senate committee leadership, while it is under pressure from commodity groups to adopt the House bill, does not think that the committee has to rush its work on the farm bill. They don’t feel the necessity to rush because they don’t think the financial issues will be any different five months from now than they will be four weeks from now.

They are continuing on the course they set before the September 11 attacks on the World Trade Center and the Pentagon. From all accounts the farm bill that the Senate is working on will have many provisions that look quite different from the House bill.

Intertwined in all of the discussion and action are a number of major questions that will have to be answered before a final version of the farm bill is approved.

  1. 1. Will the budget for agriculture be the $96.5 billion baseline or will it be $170 billion, including the additional $73.5 billion conditionally authorized in the budget resolution?
  2. 2. Will Congress impose a payment limit like the $150,000 proposal that was rejected by the House?
  3. 3. How widely will the payments under the farm bill be distributed? Will they be concentrated in the heartland or will the coasts see a larger portion of the money than in the past?
  4. 4. Closely tied to the previous two questions is the role conservation will play in the farm bill. Will conservation be tied to cropland related programs or will it be a green payment program that will encourage conservation in all regions of the country and on all sizes of farms?

Yes, a House bill has been passed. But in mid-October, the leadership of the Senate has no interest in the wholesale adoption of the House’s version of the farm bill. The Senate intends to have its say, thank you very much!


Daryll E. Ray holds the Blasingame Chair of Excellence in Agricultural Policy, Institute of Agriculture, University of Tennessee, and is the Director of the UT's Agricultural Policy Analysis Center. (865) 974-7407; Fax: (865) 974-7298; dray@utk.edu; http://www.agpolicy.org.

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