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Congress Yet to Decide 2007 Farm Bill
By
Laura Skillman
LEXINGTON, Ky., (Aug. 22, 2007) – When Congress returns to
session after Labor Day, completing the 2007 Farm Bill will be
on the agenda. The U.S. House of Representatives has approved
its version of the bill, but the Senate has yet to begin debate.
Unless the senators can quickly finalize their plan and
reconcile any differences with the House proposal, it may be
difficult for a new farm bill to be ready by the Sept. 30
deadline, said Will Snell, a farm policy specialist with the
University of Kentucky College of Agriculture. If that occurs, a
short extension of the 2002 Farm Bill is likely.
The farm bill, which expires every five years, is the country’s
most comprehensive piece of agricultural legislation. Its
effects reach beyond farmers to agribusinesses, rural
communities and even consumers, outlining provisions on
commodity programs, trade, conservation, credit, agricultural
research, food stamps and marketing.
The House proposal likely will make Kentucky’s grain farmers
happy because, after much talk of major reform within commodity
programs, about the only change made was establishing tighter
payment limitations, Snell said.
Current as well as projected future high grain prices will
likely result in farmers receiving income from the market versus
the government in the coming years, but grain farmers still
would like to retain a safety net when prices do begin to fall,
he said. There is more concern this crop year that drought in
many parts of the state will limit the bushels available for
grain farmers to sell at good prices.
Under the 2002 farm bill, commodity payments excluded anyone who
had an adjusted gross income exceeding $2.5 million, unless
two-thirds of their income was from farming. The current House
version would make individuals with a three-year adjusted gross
income average of more than $1 million ineligible for program
payments. Any individual with an adjusted gross income between
$500,000 and $1 million would also be ineligible for program
payments unless two-thirds of their income is from farming.
Direct payments to individuals and entities are capped at
$60,000 annually while countercyclical payments remain capped at
$65,000. The House eliminated the three entity rule which allows
farmers to collect payments on multiple farming entities and
also eliminated all farm program checks totaling less than $25
per individual.
While the individual program payment caps might not affect many
in Kentucky, these latter two components (elimination of the
three entity rule and checks under $25) undoubtedly will have an
effect on a significant number of farming operations, Snell
said.
The House bill renews most existing conservation programs with a
35 percent boost in funds. Conservation payments are limited to
$60,000 for a single program or $125,000 for all conservation
programs. It also provides additional funding for fruit and
vegetable nutrition, research and promotion programs.
“This farm bill increases conservation and other items, such as
more benefits for fruit and vegetable producers, which could
benefit our livestock and horticulture producers,” Snell said.
The House bill also expands funding and programs to support
renewable fuels research and infrastructure. Country of Origin
Labeling for fruits, vegetables and meat would become mandatory
by Sept. 30, 2008.
For dairy producers, the safety net changes direct support of
the price of cheddar cheese, butter and nonfat dry milk by
government purchase of such products. It also extends the Milk
Income Loss Contract Program until 2012.
The House puts an additional $4 billion toward expanding food
stamp benefits under the Secure Supplemental Nutrition
Assistance Program. It also expands fruits and vegetables
available for school lunches and snacks and for low-income
households.
In the area of rural development, it reauthorizes most existing
rural infrastructure and economic development programs with
additional emphasis and money earmarked for rural health care
programs, broadband services and value-added marketing of
agricultural products.
When Congress reconvenes after the August recess, look for the
Senate to devote even more attention to payment limitations,
nutrition, rural development and conservation in their farm bill
discussions, Snell said. Once the Senate completes its version,
a conference committee will reconcile the two bills before
approval. Therefore, expect changes to occur in the days ahead
before the five-year farm bill is finalized.
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Contact: Will Snell, 859-257-7288
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