Conferees May Be Approaching
Agreement On Farm Bill Issues

WASHINGTON — House and Senate farm bill negotiators may have worked out differences over packer ownership of cattle and country of origin labeling. Closed door meetings of the House-Senate farm bill conference committee last week failed to produce any agreement until Thursday morning, April 18, when House Agriculture Committee Chairman Larry Combest, R-Texas, and ranking member Charlie Stenholm, D-Texas, introduced a compromise proposal developed by the House conferees covering all titles of the bill.

Farm bill negotiators reconvened on Thursday evening and Senate conferees offered a counter-proposal.

The House proposal includes a provision offered by Rep. Cal Dooley, D-Calif., that adds certain criteria before the Secretary of Agriculture could implement a country of origin labeling system.

Dooley and Rep. John Boehner, R-Ohio, have expressed concerns that the country of origin labeling program in the Senate's bill is unworkable. The House discussed labeling last year, but did not include it in their version of the new farm bill.

Under the new House proposal, the U.S. Department of Agriculture would issue rules for voluntary country of origin labeling for meat, fruit and vegetables by Sept. 30. The program would become mandatory in January 2005, unless the Secretary of Agriculture determines that it would not be in the best interests of producers and consumers.

The Senate also agreed to most provisions of the House proposal on country of origin labeling. The Senate would make a labeling program mandatory one year earlier (by January 2004) and their counter-proposal states that for a product to be labeled as a U.S. product, it must be born, raised and processed in the United States.

The new proposal also establishes a Presidential commission on packer ownership to study captive supply and market mechanisms. Commission members would be required to issue a completed report by December 2004.

The Senate conferees now say they want to extend the divestment period to four years for all livestock under the packer ownership ban.

Other parts of the new House proposal would provide $1.03 billion for rural development and $1.5 billion for forestry; increase funding for most conservation programs, including $10 billion for the Environmental Quality Incentives Program, by a total of $17.1 billion and provide a $100 million per year pilot program to explore incentive payments to farmers for farm stewardship practices; and would increase spending for the Market Access Program to $200 million by 2006. The proposal also provides total spending for the trade title of $1.158 billion.

The proposed compromise would increase commodity loan rates more than the original House bill, but less than the Senate bill. And, in a complicated payment limitation proposal, it would reduce the limit on fixed payments by 20 percent and reduce the limit on counter-cyclical payments by more than 13 percent. The total dollar limitation is reduced from the original House bill level of $550,000 to $360,000.

The proposal would maintain a permanent $9.9 billion milk price support program and establish a three-year national dairy program that makes payments to all U.S. producers (using the Senate farm bill formula for the Northeast dairy program). Payments are made on up to 1.8 million pounds of production per farm. The funding for price support is $773 million and funding for the national dairy program is $1.005 billion.

It would also provide a total of $6.4 billion for nutrition and the food stamp program.

Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, says there are many general areas where the Senate agrees with the House.

On the commodity title, Harkin says the Senate agrees with the House proposal on base acres, payment yields, advance payments, and loan deficiency payments authority. Disagreements remain on commodity loan rates, fixed payments, and target prices, with the Senate proposing higher amounts than the House. There are some agreements on dairy, but the Senate's proposal provides more funding for payments and the overall cost of a national dairy program. The Senate also agrees with the House to not include Farm Savings Accounts in the final bill. The Senate proposal adds $2.4 billion in emergency disaster assistance and would permanently extend Chapter 12 bankruptcy provisions. Senate conferees maintain their proposal on payment limitations, citing House action on the issue.

In legislative action on Thursday afternoon, the full House approved by a vote of 265 to 158 a motion to instruct House conferees to support the Senate proposal.

The Senate counter-proposal maintains the total funding level of $17.1 billion for the conservation title in agreement with the House, but allocates the money differently for specific programs. The Senate increases spending for the Conservation Reserve Program, the Environmental Quality Incentive Program, and provides $3.4 billion for Harkin's Conservation Security Act.

The new House and Senate proposals on trade, research, rural development, and forestry are similar. Harkin says the Senate basically agrees with House proposals on these titles, though some policy details need to be worked out. In the nutrition title, there is disagreement on the issue of food stamp eligibility for legal immigrants.

Harkin says the controversial Reid amendment contained in the Senate bill, dealing with water rights, has been removed.

Rep. Frank Lucas, R-Okla., still has a series of questions about the conservation provisions.