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Senate farm bill writers set to jump another hurdle

In a last-minute rush to make real progress on writing a farm bill, a Senate committee will meet later today to consider ways to pay for new programs in the farm bill. The Senate Agriculture Committee was scheduled to begin marking up a farm bill this evening, but late yesterday that session was postponed.

The Finance Committee's Heartland, Habitat, Harvest and Horticulture Act has more than $20 billion in new money for the farm bill and other ag-related programs, with much of it front-loaded for the first five years. Part of that would be offset by shifting around tariff funds that already go to the USDA as well as reducing the 51 cent-per-gallon ethanol tax credit by five cents.

The biggest chunk of the new farm bill money would go to a new permanent disaster program, called the Agricultural Disaster Relief Trust Fund, at the rate of about $1 billion per year for the first five years. New conservation tax credits for farmers enrolled in conservation programs -- mainly the conservation reserve program -- would free up about $4 billion over the next five years for conservation spending.

Among the most pleased with these developments is National Farmers Union, which has made a permanent disaster program its top priority for the farm bill.

When asked his reaction to the Finance Committee's proposal, Farmers Union President Tom Buis told Agriculture Online Wednesday, "It sounds good. We're all for it. We fully support the work of the Senate Finance Committee."

The $4 billion for conservation isn't quite as much as the $5 billion that some groups like the Sustainable Agriculture Coalition think would be needed to keep expiring programs like the wetlands reserve and to make conservation on working lands a national program. But that group's lobbyist, Ferd Hoefner, was pleased by what he saw in the Finance Committee proposal Wednesday.

"While we have reservations about using tax credits in place of CRP rental payments, we are very pleased with the funding decision to provide nearly $5 billion for the farm bill conservation title. We join others in the conservation community in insisting that all of this funding remain in the conservation title, however, and we will oppose any attempt to move any of this funding into other titles of the farm bill. Conservation funding should remain within the conservation title," Hoefner said in an e-mail to Agriculture Online.

The money battles aren't over yet, especially over the direct payments. The National Wheat Growers Association and the USDA want to see them increased. But the Senate Agriculture Committee Chairman, Tom Harkin (D-IA) is still pushing for cuts. In a press conference Tuesday he said he had scaled back his goal of cutting $4.5 billion out of the program to something "probably in the $1-to-$2 billion range."

And Wednesday, his press aide Kate Cyrul said it might be less than that, even though Harkin was pushing for a cut of that size.

Direct payments might be cut through amendments on the Senate floor after his committee drafts a farm bill, Harkin said Tuesday. "When we get to the floor, there's a lot of senators who don't feel very good about direct payments," he said.

The Finance Committee bill also would change programs that aren't part of the farm bill, including Aggie Bonds that help pay for low-interest loans to beginning farmers. In a statement released Wednesday, the ranking Republican on the committee, Senator Chuck Grassley of Iowa, said "The energy provisions will be familiar to alternative energy proponents who were watching the energy tax package that advanced with the energy policy bill, which stalled. The agricultural tax package includes a new residential wind credit, a new production tax credit for cellulosic ethanol, the extension of the small ethanol producer credit through 2012, and the extension of biodiesel tax credits through 2010. The bill makes improvements to the conservation reserve program to give farmers more flexibility and to make the taxation of conservation reserve program payments more fair.

"In addition, a new tax credit will help Iowa's hundreds of conservation-minded farmers who want to participate in the Wetlands Reserve Program but have been shut out because of current farm program inefficiency. These tax changes will give farmers more options to protect potentially thousands of acres of fragile land," Grassley added. "The bipartisan bill also improves agricultural bonds for first-time farmers for the first time in more than 26 years. It makes the bonds more generous and easier to use."

In a last-minute rush to make real progress on writing a farm bill, a Senate committee will meet later today to consider ways to pay for new programs in the farm bill. The Senate Agriculture Committee was scheduled to begin marking up a farm bill this evening, but late yesterday that session was postponed.

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