Congress Scrambles To Craft
Aid Package For Agriculture

WASHINGTON —(AP)— With the farm economy worsening, momentum is building in Congress to rush billions of dollars in emergency assistance to farmers before lawmakers leave town next month to campaign.

"The question is no longer whether, but how, we'll address this farm crisis," said Sen. Byron Dorgan, D-N.D.

The GOP-controlled Senate defeated a Democratic proposal in July to raise the government's commodity price supports, a move that would cost taxpayers $1.5 billion.

But with grain prices falling and an election looming, several GOP senators are working on a proposal to increase the government's direct payments to farmers by $2 billion to as much as $5.6 billion.

"In July, the price of corn was $2. Now it's probably $1.65," Sen. Charles Grassley, R-Iowa, said last Thursday. "It's a crisis because the price has gone down more than anyone anticipated."

Some farmers already are due to get $5.5 billion in direct payments for 1999. The "market transition" payments were guaranteed through 2002 under the 1996 "Freedom to Farm" law.

President Clinton signed legislation last month to make those 1999 payments available in October, several months ahead of schedule.

Democrats, meanwhile, say they will demand another vote on their proposal to sweeten the government's marketing loan program, which is used to support commodity prices.

They also expect to seek $1 billion more in assistance to farmers who've been hurt by repeated crop failures. The Senate approved $500 million in such assistance in July, and Democrats are working on additional proposals to provide further subsidies for farmers who store grain or cut their corn for silage.

"The circumstances continue to worsen and the demand for action continues to grow," said Senate Minority Leader Tom Daschle, D-S.D.

Increasing price supports, by lifting a cap on marketing loan rates, would "do the most good in the fastest period of time," Daschle said.

Corn growers would get about 30 cents a bushel more; wheat farmers an extra 60 cents.

Some congressional Republicans no longer rule out the idea, and several GOP governors have endorsed it. But critics fear that raising the loan rates would encourage overproduction and worsen the grain glut that has been pushing prices down.

Under the loan program, farmers can either take a payment for the difference between crop prices and loan rates or borrow money at the loan rate and repay it at the crop's value.

Republicans say raising the loan rates would amount to overturning the Freedom to Farm law, which was intended to encourage farmers to plant according to market signals rather than government programs.

Increasing the market-transition payments instead would give farmers the immediate cash they need, said Sen. Conrad Burns, R-Mont.

Agriculture Secretary Dan Glickman, who has endorsed an increase in loan rates, said farmers need a "significant economic infusion pretty quickly." He deflected questions at a news conference about the proposal Republicans are working on.

Glickman met Thursday with several senators who are pushing legislation designed to help financially stressed cattle producers by requiring meat to be labeled as domestic or imported. USDA officials have raised concerns about the Senate-passed measure's impact on trade and say it would cost $60 million to enforce.

Glickman said he was helping the senators craft a compromise that would address those concerns.

Meanwhile, conditions worsen.

From drouth in Texas to crop disease in North Dakota to flooding in the upper Midwest, producers across the country have taken hits this year. Economic troubles in customer countries continue to curb demand for American products, and oversupply has growers of some commodities scrambling just for a place to store their production.

With just about a month before lawmakers' anticipated October departure, many say moves to open foreign trade markets are essential to any recovery effort.

"The fact of the matter is that our bread and butter is linked to international trade," said Ryland Utlaut, president of the National Corn Growers Association. "If we are locked out of foreign markets, or if international monetary conditions keep our product uncompetitive, then corn growers are left twisting in the wind."

Added Dennis Stolte, deputy director of governmental relations for the nation's largest farm organization, the American Farm Bureau Federation: "International trade is the future for American agriculture. We hope there is a willingness by Congress to do something for farmers."

The Agriculture Department estimates that cash farm income for 1998 will be down $5.9 billion from 1997's record high, even while farm production costs rise an estimated $4.3 billion. The problem is a combination of increased farm production and falling farm exports.

Key to the effort, ag groups say, is replenishing the International Monetary Fund, which promotes financial stability abroad. In offering loans to ailing countries, the fund requires adjustments in their trade policies — a potential boon for American farmers trying to sell overseas.

The Senate has proposed $18 billion for the IMF to augment coffers depleted from major projects bailing out the Asian and Russian economies. But House support for the measure remains uncertain.

Fast-track negotiating authority for the president, which lets him negotiate agreements that Congress must approve or reject unamended, also is needed, farmers insist. House Republicans have promised to bring the measure to the floor sometime this month.

The legislation was pulled from the House floor last year when Democrats opposed it in such overwhelming numbers that Clinton feared it would fail. Opposed by organized labor and environmental activist groups, traditional constituencies of the Democrats, the authority could cause deep divisions within the president's party.

Despite Clinton's support for the measure, the White House has accused GOP leaders of bringing it up again simply for political haymaking before November's elections.

Another hot farm issue before Congress is unilateral sanctions, which farmers say devastate their efforts to sell overseas when they are imposed summarily, as often demanded under U.S. law.

Sen. Conrad Burns, R-Mont., says he will attempt to obtain $3.2 billion in compensation for wheat growers who have lost money over the past three years because of trade sanctions imposed by the United States.

Burns said he hoped to write the compensation into the 1999 agriculture appropriations bill now before Congress.

Burns said his plan would pay wheat farmers for losses they suffered when grain prices fell because of trade policy and sanctions. The payment would be in addition to market transition payments made under the phase-out of government subsidies by the Freedom to Farm legislation passed in 1996.

Burns proposes to appropriate $3.2 billion to offset the decline in wheat price attributable to the loss of markets over the past three years.

Based on International Grains Council and U.S. Department of Agriculture figures, Burns said, the sanctions have depressed the price of wheat about $1.37 a bushel over the past three years.

One measure likely to pass in some form is a disaster aid package designed to ease farmers' cash woes. The Senate version includes $500 million, but Agriculture Secretary Dan Glickman soon will recommend raising that possibly to as much as $1 billion. House and Senate conferees will come up with a final proposal.

Other farm issues that may be addressed as the session winds down:

— A Senate proposal inserted in the agricultural spending bill that would label beef or lamb as "domestic" or "imported." Producer groups are hoping the labels will encourage consumers to buy domestic. Opponents say it will force other countries to do the same and hamper trade efforts.

— Tax relief for farmers. One package introduced by several GOP senators would set up IRA-type savings accounts for producers, slash capital gains taxes and allow farmers to average their incomes for tax purposes.