Farm bill compromise to be offered next week

WASHINGTON (Reuters) - A top U.S. lawmaker on Friday said he will offer a compromise next week on the $286 billion farm bill including tighter limits on subsidies, a key goal for the White House, which has threatened to veto the bill.

“We’ve got to get this moving,” Rep. Collin Peterson, chairman of the U.S. House of Representatives Agriculture Committee, said on Friday.

He pointed to a de facto March 15 deadline to reach a compromise between Senate and House versions and enact a new farm bill that President George W. Bush will sign into law.

“I’d like to make an offer to the Senate on Wednesday ... which I believe the president will sign,” he said. “The Senate is not in agreement with what we’re looking at.”

The Senate bill includes a disaster aid program absent in the House bill, and higher subsidy limits. Decisions on many elements of the bill will be made in the next few days, after cost estimates are received, said Peterson, a Minnesota Democrat.

These include whether to increase crop subsidy rates and the sugar support price as well as how to pay for the five-year bill. Many issues, such as expansion of public nutrition and land stewardship programs, hinge on the question of funding.

Bush said on Wednesday he would veto the farm bill if it raises taxes or does not tighten limits on farm payments. The administration wants to end crop subsidies to roughly 40,000 high-income farmers and landowners.

“We, obviously, can’t go anywhere near as far as they want to go,” Peterson told Reuters. He declined to outline his proposal on that area but said, “Some senators are not going to be happy.”

The House voted last July for more stringent rules than were proposed by the Senate. The House would bar payments to people with an adjusted gross income above $1 million. The Senate endorsed a $750,000 AGI cap, but would exempt people with more than two-thirds of income from agriculture.

The White House backs a $200,000 AGI limit. At present, the AGI lid is $2.5 million a year with no cutoff if 75 percent of income is from farming.

To be acceptable to House members, Peterson’s proposal would have to include farm subsidy reforms, allow $6 billion in additional farm bill spending without requiring spending cuts elsewhere, and boost food stamp benefits for 10 years, said Ferd Hoefner, a small-farm advocate who has lobbied House members on the bill.

House Speaker Nancy Pelosi has called for payment limit reform. Farm-state lawmakers say they need several billions of dollars in additional revenue so they can expand food stamps and land stewardship programs.

During a speech to state agriculture directors and an interview, Peterson said leaders of the Senate Agriculture Committee agreed to the process for action on the bill, although disagreeing on its provisions.

Peterson said his draft would include a program to convert surplus sugar into fuel ethanol. He also said a proposal by sugar producers to create a new set of rules on sweetener trade with Mexico was dead and would not be in the draft.

House leaders are expected to appoint their negotiators early next week to work with senators to write a final version of the farm bill.

“We should give up our President’s Day break. We should stay here and get this thing done,” said Peterson. Congress plans to recess from February 18 to 22 for the President’s Day federal holiday.

A Senate proposal to ban meatpackers from raising livestock in competition with farmer and ranchers will not become law, said Peterson.

Reporting by Charles Abbott; Editing by David Gregorio