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House Ag chair: Don't expect a bigger commodity title

If there was any doubt before today, it's becoming clearer that the next farm bill is unlikely to have more money for commodity programs. Several commodity groups have asked Congress for changes in the 2002 farm bill safety net that would all cost a little above or below $1 billion in extra funds each year.

On Thursday, House Agriculture Committee chairman Collin Peterson said bluntly that it’s not going to happen. "I've told them no," Peterson said, referring to his response to meetings he's had with commodity group lobbyists recently.

The National Association of Wheat Growers wants higher direct payments, the American Soybean Association has lobbied for higher target prices. And National Corn Growers Association advocates changing the countercyclical program to a revenue insurance program that would average about $500 million more annually over the life of the next farm bill (but would actually cost closer to $800 million because it would not start for two years, some commodity group leaders say).

At the same time, Peterson said he opposes shifting funds from the commodity title for other USDA programs such as conservation.

The Congressional Budget Office baseline would allow 43% less spending on commodity programs for the 2007 farm bill than was available in 2002, he said.

"There really is, in my judgment, there is no money in the commodity title to shift to some other programs," Peterson told reporters.

He also said that the projections for less money needed for commodities could turn out to be wrong if current high crop prices don't continue. That's another reason he's reluctant to shift funds out of the commodity title of the next farm bill. Congress cut spending on commodity programs in the 1996 farm bill, then had to pass annual emergency spending bills when crop prices fell.

"If you try to take money out of the commodity title that's exactly what you're going to do. You're going to set yourself up for a bailout when prices go down," he said.

That doesn't mean Peterson won't work to change the commodity title. He said he's interested in using funds from direct payments to help pay for a new permanent disaster program in the farm bill. And he said that his staff is also looking at an American Farm Bureau Federation proposal for a revenue protection program.

Senate Agriculture Committee chairman Tom Harkin suggested that he may be interested in using funds from the direct payment program for other programs, including rural development and green payments that reward farmers for how they grow crops, not what they grow.

Harkin made the point that direct payments are getting harder to defend when his committee held a hearing on commodity programs Wednesday.

"I keep pointing out, 'How can you justify making direct payments to farmers who are making a lot of money?'" he told reporters Thursday.

Harkin also said that writing the farm bill "is a two-stage process" that goes beyond the Senate Agriculture Committee, where support for current commodity programs remains strong. It can be amended when the bill comes up for a vote on the Senate floor.

"There's going to be a lot of interest in this beyond the committee," he said.

Representative Peterson said that he believes making a lot of amendments to the farm bill on the floor of the House of Representatives is less likely this year than in 2002, in part because he's trying to make the process of writing the farm bill more open in his committee. Potential changes to the farm bill will come up in each subcommittee, he said.

Peterson also said that he's still hoping that the leadership of the House will help find a way to restore some of the money cut from the farm bill baseline. Part of it might come from legislation that rolled back tax breaks for oil companies. Part of that money would be used to develop more biofuel production, including ethanol made from cellulose. Peterson is still working to get some $20 billion in farm bill funds restored, which would amount to an additional $4 billion per year over the life of the next farm bill.

If there was any doubt before today, it's becoming clearer that the next farm bill is unlikely to have more money for commodity programs. Several commodity groups have asked Congress for changes in the 2002 farm bill safety net that would all cost a little above or below $1 billion in extra funds each year.

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