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To reform or not, that is the question

The shape of reform in farm program payments, if any, may be one of the last things holding up completion of a new farm bill in Congress.

"I think they're close. They met all day yesterday behind closed doors. Hopefully there will be a public conference soon," Tom Buis, President of National Farmers Union told Agriculture Online Wednesday.

Buis, who was involved in working out a mandatory country-of-origin labeling (COOL) compromise for the House farm bill last year, said he thinks most of the farm bill policy issues, including most of the livestock title, have been worked out.

The bill is likely to include COOL and a ban on mandatory arbitration for farmers who sign livestock production contracts. A ban on packer ownership of livestock is considered less likely by some Washington observers of the farm bill negotiations and Buis said he thought that issue may still be unresolved.

Overall, Buis considers the bill, with its increases in funding for conservation, nutrition and food aid to be "an improvement over current law."

"It contains a permanent disaster program which ahs been a hole in the safety net," he added. There will likely be $3.8 billion over the next five years for disaster aid, down slightly from a goal of $4 billion before farm bill leaders started final negotiations.

The level of adjusted gross income you could be allowed and still receive commodity program payments, could be one of the more contentious issues. The Bush Administration originally proposed a $200,000 limit but in recent months was leaning toward accepting $500,000. The bill passed by the Senate set an AGI limit of $1 million in 2009 for nonfarmers.

"This will be the last thing worked out in there," Buis said. "I think you're going to see a further reduction for both farmers and nonfarmers."

Senate Agriculture Committee Chairman Tom Harkin told members of the National Asscoation of Farm Broadcasters Wednesday that for nonfarmers, the AGI limit would fall to $750,000 per individual in 2010, $650,000 in 2011 and $500,000 by 2012. Farmers would have a limit of $950,000 per individual. For each $100,000 in income above the threshold, farmers would loose 10% of their direct payments.

Ferd Hoefner of the Sustainable Agriculture Coalition pointed out that a married farmer would get $1.9 million in income before starting to loose any direct payments. But since the limit on driect payments might be increased by $20,000 for a couple, they would loose only half of that increase for the first $100,000 in income above the $1.9 million AGI limit.

"At $2.1 million, they would lose the full $20,000, and be back to current law. So you would not lose even a penny relative to current law until you hit $2.2 million in net income," Hoefner said.

The final form of an AGI agreement may not be set yet. As it stands, a veto may still be looming from the Bush administration, according to USDA Deputy Secretary Chuck Conner.

"The Press is reporting that Congress has devised a new and highly complicated payment limit plan. This plan would result in continuation of farm subsidy payments to individuals with extremely high incomes," Conner said Wednesday. "This is not reform and does not move Congress closer to a farm bill that the President would sign."

The shape of reform in farm program payments, if any, may be one of the last things holding up completion of a new farm bill in Congress.

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