Senate sets vote on second version of farm law

By Charles Abbott

WASHINGTON (Reuters) - In a final step to correct a clerical error, the Senate was scheduled to vote on Thursday for the second time on the $289 billion U.S. farm bill, this time including food aid and trade programs, leaders said.

All other parts of the five-year bill became law on May 22, through a congressional override of a veto by President George W. Bush. At that time, the White House said it would veto an updated version of the bill too, creating the possibility of a second override.

The 35-page trade section of the document was omitted by accident from the official copy of the bill sent to the White House. Agriculture Committee leaders say passage of the new bill would extinguish any grounds to challenge the legality of the farm law.

A large vote in favor of the bill was expected. Senators voted 82-13 for the veto override. The House passed the updated version of the bill by a margin of 306-110.

A $60 million pilot program would be created as part of the trade title to test "local purchase" of food aid, rather than the current practice of shipping U.S.-grown foods to hunger spots.

The Bush administration wanted authority to use up to 25 percent of money in the major U.S. food aid program to buy food in the region where aid is needed. It argued that local purchase is a faster and more inexpensive way to deliver aid.

U.S. export programs would be revamped under the bill, including repeal of the Export Enhancement Program, once the major U.S. export subsidy program.

The supplier credit and GSM-103 long-term credit guarantee programs would be terminated and origination fees for GSM-102 short-term credits would be revised to comply with World Trade Organization rulings against U.S. cotton subsidies. The cost-sharing Market Access and matching-fund Foreign Market Development programs are reauthorized along with Food for Progress, which encourages free-market reforms in agriculture.

Importers would be required to report to U.S. officials the export fees they pay on Canadian softwood lumber. Canadian Ambassador Michael Wilson objected in May that the plan would hinder U.S.-Canada lumber trade.

The 2008 farm law expands food stamp benefits, aiding 10 million people, and federal donations to food pantries during a time of rising food costs. It also encourages land stewardship and development of biofuels.

Two Republican senators, Jim DeMint of South Carolina and Tom Coburn of Oklahoma, were guaranteed time before the Senate vote to explain their objections to the bill. They blocked an earlier attempt to pass the bill on a voice vote.

(Reporting by Charles Abbott, editing by Matthew Lewis)