CORRECTION

Illinois and Indiana farm leaders are alarmed that if Congress fails to pass a new multi-year Farm Bill by March 15 the entire crop-subsidy system might suddenly be governed by federal law of the late 1940s.

The Senate and House have passed substantially different versions of the huge bill, which President Bush has pledged to veto if it's too expensive, and a House-Senate conference committee next week will resume contentious negotiations trying to reach a compromise that he'll sign.

The current Farm Bill, which especially subsidizes production of corn, soybeans, wheat and rice, expires March 15.

If a new bill is not passed by then, and Congress fails even to extend existing law, the entire subsidy program could revert to the 1948 version, and that would be detrimental to Illinois farmers, according to Phillip Nelson, president of the Illinois Farm Bureau. He says the reversion would scuttle progress and innovations made within the farming industry and the program since then, such as funding for energy conservation efforts and bio fuels, concepts unheard of in the late '40s. 

For instance, "Nelson said, "soybeans in the 1940s were a non-participatory crop back then, so they wouldn’t be included…There is a threat out there by certain Congressmen who say that that could happen."

Kent Yeager, public policy director at the Indiana Farm Bureau, says that the reversion would cause a ripple effect throughout the Midwest. 

“Even though commodity prices are very good now, in most people’s estimation that reverts us back to parity prices. Prices would be much higher than they are now.  It wouldn’t even be good for farmers to market,” said Yeager.

Nelson acknowledges that some provisions aimed at supporting commodity pricing may become a casualty of compromise.

“Some of the tax provisions will [have to] be taken out, but that asks the question, how will you still pay for some of the commodities mentioned in the Farm Bill. Hopefully we can put something together that everybody could get behind and support,” said Nelson.

With President Bush promising to veto the expanded bill passed by the House last year, the House Agriculture Committee on Feb. 14 proposed a new Farm Bill spending framework that would increase “over-baseline” spending by $6 billion over the next decade, a figure recommended by the White House. The framework cites the need for “critical funding for conservation, nutrition, specialty crop, energy, research and livestock and that the President can sign.” Concrete funding allocations have not been specified.

The Senate released a proposal of its own that would increase “over-baseline” spending by $12.3 billion. In a joint statement last week, U.S. Department of Agriculture Secretary Ed Schafer and Deputy Secretary Chuck Conner said they were “disappointed that the Senate has not joined the House in proposing a package that seeks fiscal discipline and real reform.” 

Kevin Johnson, agricultural aide to Rep. Tim Johnson (R- Ill.), who's a member of the House Agriculture Committee, said that although the committee has presented its framework, there are some issues Johnson is still pondering.

“We’re looking over the whole proposal. We have had some issues with a ten-year farm bill. '02 to '08 is already hard enough to project prices and funding, let alone ten years. We don’t know what the farm industry will look like in 5 to ten years,” said Kevin Johnson.

 
He also said the White House's recommended limit on increased spending is another issue.

 
“Six billion is a starting point, but how are you gonna fund this? This is still up in the air… We are looking for that magical number, but we know we have to deal with the administration on this framework,” said Johnson.

In the absence of an agreement, he added, the idea of extending the current bill may prove difficult as well.

“Extension for a year or two will be hard to do. Fruits and vegetable people got funding and research [in the proposed bill]. Those states that grow a lot of this will not vote for an extension, because they are already getting their dollars."

Johnson said it's in the interest of the Plains States to pass a new bill as soon as possible, rather than rely on an extension.

Katie Cyrul, spokesperson for Senator Tom Harkin, (D-Iowa), the top Democrat on the Senate Agriculture Committee, said that White House concerns over tax provisions of the Senate bill are misplaced.

“What we’re trying to do was close some abuses of tax loopholes. We don’t consider that raising taxes, we are considering that sealing loopholes. We are looking for funding that we can all agree on, the House, the Senate and the president,” said Cyrul.

Harkin has stressed the importance of cooperation in passing a new bill that would include funding of nutrition programs and bio fuels.

“The White House is still withholding the cooperation – particularly on obtaining funding – that we must have to complete a new farm bill.  So I urge President Bush to lay aside veto threats and work with us so we can get this job done,” Harkin stated.