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A peek at the next farm bill?

What will be in the 2007 Farm Bill? It could be a commodity title that looks much like today's program, help for beginning farmers to get started in organic farming, and an expanded conservation program that's tied to making ethanol from grasses and other biomass crops.

Those were some of the hints that House Agriculture Committee Chairman Collin Peterson (D-MN) shared with reporters at a press conference Thursday.

Peterson and the ranking Republican on the Ag Committee met with the House Budget Committee Wednesday to ask for more funds for the next farm bill. Because commodity prices have been driven up by demand for ethanol and biodiesel, the Congressional Budget Office last month made a projection, or baseline, that the new farm bill will need $60 billion less over the next 10 years for commodity programs than was projected for the 2002 Farm Bill.

Peterson said Thursday that he explained to the committee that farm programs haven't used all the money allotted to them in 2002 and that they've helped keep the federal deficit from growing more. " We feel like we should have some consideration in that regard."

He told Agriculture Online that he's not asking for restoring all of that allocation back into the farm bill. He wouldn't say how much he has requested for commodity programs. That depends it part on whether commodity groups can agree on what they'd like to see, he said.

"The reality is in some of these areas some of the folks haven't come to a consensus about what they think they need," Peterson said.

The National Corn Growers Association is advocating changing today's countercyclical payment program that relied on target prices to a revenue-based program that considers both prices and yields. But other commodity groups haven't yet endorsed that idea. The American Soybean Association recently announced that it wants loan rates and target prices rebalanced, with the main effect of those changes being an increase in the target price for beans.

Peterson said he sees little interest in cutting loan rates in the marketing loan program. The USDA's recent farm bill proposal advocated making cuts there and increasing direct payments. It also has a revenue-based component, but the USDA proposal would base revenue payments on national-level prices and yields. Peterson questioned Thursday whether that would really be a better safety net instead of just having a permanent disaster program.

"If worse comes to worse, if we just extend the commodity title as is, it wouldn't be the end of the world," Peterson said.

Conservation groups do agree on changes for the conservation title of the farm bill, Peterson said. They'd like to see the Conservation Security Program expanded. That program, which pays farmers and ranchers for resource conserving improvements on working lands, was cut in order to fund disaster programs under the last farm bill.

Peterson said he's asking for an additional $7.5 billion in the baseline to cover a larger CSP and to continue the Wetlands Reserve Program.

Peterson said he's interested in using conservation programs to help support a new cellulosic ethanol industry. Besides a need for more research on making ethanol efficiently from grasses and other plant wastes, farmers need to gain experience in raising and handling cellulosic crops, Peterson said.

"There's going to be significant increases in conservation. It may look a little different than it did in the past because of the fuel component," Peterson said.

Peterson said he wants to do more in this farm bill to help beginning farmers, too, but he questioned whether an Administration proposal to give 10% bigger direct payments to young farmers growing commodity crops is the right kind of help.

High land and capital costs are a big barrier to beginners, he said.

Organic farming might be a better route, he said. It seems to take less capital and is profitable, he said. ""We have guys in my district that are getting into this," he said.

Peterson said he has doubts about another USDA proposal, a means test that would ban commodity program payments to anyone with more than $200,000 in adjusted gross income. As a CPA, he said he knows there are ways to manipulate that.

But he also said that he has told cotton and rice producers that he doesn't think they can avoid this issue, that the agriculture committee will have to address the issue of large program payments.

"I don't think we can take a position that we're going to stonewall it and try to keep it the way it is," he said. If the committee tries, he expects some kind of strict payment cap to be written with amendments to the farm bill offered on the floor of the House."

What will be in the 2007 Farm Bill? It could be a commodity title that looks much like today's program, help for beginning farmers to get started in organic farming, and an expanded conservation program that's tied to making ethanol from grasses and other biomass crops.

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