Iowa Senator looks to trust fund for conservation

WASHINGTON (Reuters) - The Senate should establish a trust fund for conservation in order to allow the farm bill to devote more funding to other programs, Iowa Sen. Charles Grassley said on Tuesday.

"If we can help out by some philosophically sound idea of taking money and setting up a trust fund for conservation purposes, it might accomplish some of the same goals that we would in the farm bill," Grassley, the top Republican on the Senate Finance Committee, told reporters.

"Then money that would otherwise been spent on conservation in the farm bill could be spent on some other programs," he said.

Democrat Tom Harkin of Iowa, who heads the Senate Agriculture committee, has said he wants to expand land stewardship and public nutrition programs, which include food stamps and school lunches, while boosting the production of biofuels.

Grassley told reporters he has been in contact with Max Baucus, chairman of the Senate Finance committee, about raising money for conservation in such a way that would allow it to stay within the jurisdiction of that committee.

"We don't feel very comfortable with what the House Ways and Means committee did, raising a lot of money, just to hand it to the agriculture committee," said Grassley.

The House bill would pay for a $4 billion expansion of food stamps through 2012 through a controversial measure that would tax U.S. subsidiaries of foreign companies. The prospect of new taxes angered lawmakers and the Bush administration.

Grassley also wants to prioritize a lower farm subsidy limit when the Senate Agriculture committee drafts its farm bill in September.

Grassley and North Dakota Democrat Byron Dorgan have proposed a "hard cap" of $250,000 a year per farmer in crop subsidies. Their legislation would set more stringent limits on who is "actively engaged" in farming and thus eligible for subsidies.

"(Our $250,000 is) to counteract the laughable figure that's in the House bill," he said.

The House bill sets no limit on payments but would deny crop and stewardship payments to people with an adjusted gross income above $1 million a year. The Bush administration proposed a $200,000 a year income ceiling.