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July 6, 2001

Ag economic assistance
limited to $5.5 billion

The U.S. House Agriculture Committee approved $5.5 billion in economic assistance for farmers and ranchers in late June, despite the efforts of Agriculture Chairman Larry Combest (R-Lubbock) and Farm Bureau to raise the amount to $6.5 billion.

Texas Farm Bureau President Donald Patman praised Combest for the effort. "We are disappointed that the chairman's recommendation was not approved," Patman said. "But we will work for a level of funding that addresses the needs of farmers and ranchers as the bill progresses to the U.S. Senate."

The economic assistance package is in response to persistent low commodity prices and other problems that threaten the survival of many family farms and ranches.

"We appreciate the actions of the Agriculture Committee, but we are very concerned that the $5.5 billion will not fully address the growing crisis in agriculture," Patman said.

Combest's $6.5 billion proposal fully covered the farmers' 2001 crop year by bridging together the government's funding of $5.5 billion 2001 Fiscal Year and $1 billion in 2002 Fiscal Year funds, to remain within the Budget Resolution agreed to by Congress and the Bush administration this past May.

The Committee narrowly voted 24 to 23 to adopt the substitute amendment by Ranking Member Charles Stenholm (D-Stamford) and Vice Chairman John Boehner (R-Ohio) that limits overall assistance to $5.5 billion—$4.6 billion in market loss payments to major crop producers, with the balance to oilseed, peanut, wool and mohair, tobacco quota holders, as well as handlers and producers of cottonseed—all restricted to use before September 30.

Provisions of the substitute amendment include:

•$4.6 billion for supplemental market loss assistance payments to individuals receiving an AMTA payment

•$423 million to producers of 2000 crop of oilseeds

•$54.2 million to producers of peanuts

•$84.7 million to producers and first handlers of cottonseed

•$169 million in the following manner:

• $10 million for direct and indirect costs related to the processing, transportation, and distribution of commodities.

•$500,000 grant to each state and $1 million to Puerto Rico to promote agriculture (Grants to each state totaling $134 million based on the value of production of specialty crops in relation to the national value of specialty crop production. States receiving these grants must agree to give a priority to specialty crops as a condition of receiving the grant.)

The committee later approved the bill 31-14.

American Farm Bureau Federation President Bob Stallman called the House Agriculture Committee's decision to provide only $5.5 billion in a farm relief package "disheartening."

"We believe needs exceed $7 billion," Stallman said. "The fact is agricultural commodity prices have not strengthened since last year when Congress saw fit to provide significantly more aid."

He said the organization will now turn its attention to the Senate and then the House-Senate conference committee that will decide the fate of much-needed farm relief.

In May, the USDA revised its estimate of net farm income for 2001 to $42.4 billion, up $1.1 billion from its January forecast, because of higher livestock prices. But farm groups say many producers can't survive financially without additional aid this year to supplement existing subsidy programs. Production expenses, which include the cost of fuel and fertilizer, are expected to rise $3.6 billion this year, or 1.8 percent.