February 18, 2000

President Clinton’s FY 2000 budget proposal, delivered to Congress Feb. 7, called for $3.1 billion of a total of $11 billion over two years to be earmarked for supplemental income assistance program (SIAP) payments for FY 2001, which begins Oct.1, 2000. Some $600 million would be paid to certain farmers before Oct. 1. An additional $3.2 billion would be earmarked for FY 2002.

A counter-cyclical program based on revenue history that would provide farmers formal income support during tough economic times is a key component of the Administration’s proposal.

Texas Farm Bureau Legislative Director Steve Pringle said, "Obviously, the counter-cyclical proposal put forth by the administration matches with language adopted by the American Farm Bureau Federation at our most recent convention in Houston. However, this plan kicks in when revenue falls below 92 percent of the five-year gross-income average (including government and market payments) for a crop. We’re now in the third year of low prices. If they’re all low, it’s going to be difficult to get below that 92 percent floor."

Payments would be based on actual bushels produced, not on income per acre. Additionally, there would be a $30,000 combined payment cap per person, which would limit benefits to small- and medium-sized farmers. The sum of regular AMTA payments plus the payments under the supplemental income assistance program could not exceed $30,000. (No change in the current AMTA limit of $40,000 per payment person.)

Other preliminary details include:

• Marketing loan rate freeze at 1999 crop levels. The secretary has discretion to hold commodity rates at current levels.

• Crop insurance. Some $640 million in subsidies for producers who purchase higher levels of crop insurance coverage. The program would extend payments beyond farmers in designated disaster areas to those with individual losses due to bad weather or disease.

• Two-year extension of dairy price support program. Price supports were extended for one year in the 1999 appropriations package adopted last fall.

• 20 percent increase in food safety spending. $422 million for inspection, research and risk-assessment programs at USDA and the Health and Human Services departments, up $68 million, or 20 percent, from the current fiscal year.

Vice President Albert Gore has proposed a $1.3 billion conservation spending package to protect land used by farmers to grow grain and to shield environmental damage from livestock.

TFB’s Pringle said, "It is unfortunate that livestock producers were left out. Hopefully, some of the $1.3 billion conservation spending package could be directed at livestock."

An early assessment by Farm Bureau finds that the $3.1 billion in assistance will likely be insufficient; and the $640 million to subsidize crop insurance premiums is useful, but does not take away from the need to pass the $6 billion crop insurance bill currently pending in the Senate Ag Committee.

The organization also expressed opposition to the $30,000 payment limit, but said the $1.3 billion for conservation is acceptable, as long as it is not used for set-asides and as long as other financial assistance is forthcoming.

Although Farm Bureau appreciates the Administration’s intentions with this proposal, along with trade expansion efforts, Pringle said the biggest help of all would be for Congress to simply follow through with promises made when the Freedom to Farm, or FAIR Act, was passed in 1996. Back then, elected leaders assured farmers and ranchers that there would be progress in opening foreign markets to U.S. products and reducing unnecessary regulations.

"We’re still waiting," he said.

Meanwhile this spring, the House Agriculture Committee will hold a series of field hearings throughout the United States.

Locations and dates are designed to focus on the specific concerns of
producers within each of the Plains, Midwest, Southeast, Northeast and
Western regions. Hearings, to be held in March, April and May, are as follows: Monday, March 6 in Lubbock; Friday, March 17 in Memphis, Tenn.; and Saturday, March 18 in Auburn, Ala.

Hearings will then move to the following cities (listed alphabetically): Boise, Idaho; Kutztown, Penn.; Peoria, Ill.; Raleigh, N.C.; Sacramento, Calif.; Sioux Falls, S.D.; and West Chester, Ohio.