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Johanns: Administration farm bill has support in Congress

Agriculture.com Staff 04/16/2007 @ 4:15pm

Agriculture Secretary Mike Johanns told the North American Agricultural Journalists in Washington, DC, today that in response to interest in Congress, the USDA is drafting legislation that could be used to put the Bush administration’s farm bill ideas into the 2007 bill.

The administration proposal would increase spending on conservation programs and would raise direct payments for commodity program crops by about $1 billion.

More conservation spending seems to have wide support but neither of the ag committee chairmen in Congress­, Senator Tom Harkin nor Representative Collin Peterson, have expressed much interest in higher direct payments so far. And over the weekend at a hearing in Council Bluffs, Iowa, Harkin seemed to question the wisdom of continuing direct payments.

Johanns said Monday that direct payments are part of a carefully crafted array of farm bill proposals.

"It's a predictable form of aid in a rather unpredictable profession," Johanns told reporters.

And, along with countercyclical payments based on market prices and yields, the administration farm bill proposal "will offer a relatively complete package to guard against unexpected events," he said.

When asked what he thought of using some money that would have gone to direct payments to use as conservation payments on working lands, Johanns said that the administration farm bill already proposes a higher level of spending on conservation. And he said he's not certain that farmers would accept that tradeoff.

"I think that may be a bit of a tough sell with the producers out there," he said.

Later, in a panel discussion by farm group lobbyists, John Gordley of the American Soybean Association, said he doesn't think that either Harkin or Peterson want to end the direct payment program but "I think they see that as a pot of money" that might be used for new or expanded conservation programs.

The direct payment program goes to producers regardless of which crop is grown on land that has been enrolled in commodity programs. It began as AMTA, or agricultural market transition act, payments under the 1996 farm bill, when the payments were considered an incentive for transitioning to fewer price supports. In 2002 it was made a permanent payment program in the farm bill.

Because direct payments aren't tied to a commodity, they’re not considered trade distorting under existing trade laws, which Johanns said Monday is another advantage. Other commodity programs are more vulnerable to litigation under trade laws. Brazil has already won much of its case against cotton subsidies and Canada is challenging corn subsidies.

"It's a better trade policy and it’s a better safety net," Johanns said.

In order to continue direct payments, however, the next Farm Bill will have to eliminate a provision that bans fruit and vegetable production on land with a history of commodity program payments. In the case against cotton subsidies, that ban on produce was considered trade distorting by a World Trade Organization panel.

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