Bush administration outlines farm bill priorities
WASHINGTON (Reuters) - The Bush administration's top priorities for the new U.S. farm law include tighter crop subsidy limits and so-called local purchase of emergency food aid, Agriculture Secretary Ed Schafer said on Friday.
Also on the list are possible realignment of the ethanol import tariff and a less intrusive sugar program, said Schafer. But he added, "We have a spending issue" over the cost of the farm bill, estimated at more than $285 billion for five years.
In the past couple of days, House and Senate negotiators referred to a "big four" list of administration goals in the final wrap-up of the farm bill without giving details.
"Some things they are asking are problematic," said House Agriculture Committee Chairman Collin Peterson, a Minnesota Democrat, during a teleconference. He said farm-bill writers tried to accommodate the White House where possible.
Negotiators are expected to meet on Tuesday to clear the bill for a House vote later in the week. The Senate could send it to the White House by mid-May, seven months overdue.
Farm bills are legislation that govern dozens of programs. The 2008 bill would increase spending on nutrition programs by $10.3 billion over 10 years, land stewardship by $4 billion, specialty crops by $1.35 billion and biofuel development by $1.2 billion.
Crop insurance would be cut by $5.75 billion over 10 years, commodity supports by $1.3 billion and agricultural research by $1.2 billion.
"I think it is the balance of reform that we are looking for," Schafer told Reuters. "In that conversation, we have a handful of items that we think are of utmost importance."
He named the sugar program, language to prevent abuse of so-called loan deficiency payments, a cap on subsidy payments, local purchase of food aid and, "How are we going to deal with these subsidies on ethanol and the tariffs on ethanol?"
The farm bill would cut the excise tax credit for ethanol by 12 percent, to 45 cents a gallon, but not change the import tariff of 54 cents. Energy Secretary Sam Bodman suggested in January the tariff is no longer needed.
Peterson said the White House objected to provisions to raise the sugar support price by three-fourths of a cent and to sell surplus sugar to ethanol makers as a buffer against any surge in sugar shipments from Mexico.
The administration wants authority to use up to 25 percent of funding from the major U.S. food aid program for "local purchase," meaning food grown near the scene of food shortages. Backers say it would be quicker and more efficient than shipping U.S.-grown food, as the program now operates.
Lawmakers are skeptical of an abrupt change in the program. The Senate voted for a $25 million a year pilot program.
Senior negotiators decided this week to allow farmers to collect up to $50,000 a year in the guaranteed annual "direct" payments. Married couples can double the figure. The limit now is $40,000 per person.
Negotiators are working out a formula to curtail crop and stewardship payments to wealthy operators, said Peterson. The White House suggested cutting off crop subsidies to people with more than $200,000 a year in adjusted gross income, or $500,000 AGI at the most.
Lawmakers would deny direct payments and stewardship payments to operators with more than $500,000 AGI from off-farm sources. When they top $950,000 AGI, they would lose 10 percent of the direct payment for each $100,000 in additional income.
(Writing by Charles Abbott, editing by Matthew Lewis)
