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Farm bill veto certain unless changes made

NEW ORLEANS - The Bush administration reiterated Sunday its intent to veto any farm bill that includes tax increases, including the bill now awaiting conference committee action in Congress. And it said March 15 looms as about the latest a bill can be signed and still affect this year's agricultural production.

"The bills passed by the House and Senate, as they stand today, are not on a road to successful passage," Agriculture Acting Secretary Chuck Conner told American Farm Bureau Federation members gathered in New Orleans for their 89th annual convention. "Our concerns are what are in these bills, but just as importantly with what is missing in these bills."

Chief are $37 billion in the Senate version that Conner calls "budget gimmicks and tax increases," and missing is commodity subsidy support that caps payments to non-farmers. The Bush administration would like a $200,000 limit.

"Neither the House or the Senate bill has gone far enough toward imposing a meaningful income limit on participation in farm programs, nor have they gone very far in reforming the way beneficial interests is applied to marketing loan transactions," Conner said. "We want to vigorously defend agricultural support, but farm program benefits going to Park Avenue (non-farmers), simply put, makes it much more difficult."

But, Conner said, there is optimism as he said he's spent many hours over the congressional recess meeting with House Agriculture Committee Chairman Collin Peterson, DFL-7th District, who may play a key role in finding a bill that House and Senate conferees can agree upon - and be signed by Bush.

Congress is late in crafting a new five-year federal farm bill, with the 2002 Farm Bill having expired Sept. 30, Congress put off until March 15 the need for a new farm bill, but Conner said at that point the U.S. Department of Agriculture by law falls back to the original 1949 Farm Bill, unless Congress does something else, such as continuing the 2002 bill until after the fall elections. Also by that time, producers will have or be close to making decisions on their operations, making it too late for a farm bill to have an effect.

Conner admitted going into the lion's den with a message that a farm bill won't be signed by President Bush until Congress eliminates the need for tax increases and limits payments to farmers. American Farm Bureau President Bob Stallman, in his annual speech moments earlier, said the nation needs a farm bill now, and that it seeks continued support for direct payments to farmers.

About 5,000 Farm Bureau members are expected to the four-day convention that started Sunday and ends Wednesday. Included are about 50 members of the Minnesota Farm Bureau, as well as Farm Bureau delegations from North Dakota and South Dakota.

"It is difficult for me to bring a stern message about the farm bill to this great group," Conner said, adding that his parents were Farm Bureau members. His parents and other members he knew growing up were "straight-shooters," he said. "I cannot sugar-coat this message about the farm bill to you."

Later, at a news conference with agriculture reporters, Conner emphasized the need for Congress to change its position, or a bill will never be signed. And he wants those conditions known even before a House-Senate conference committee is appointed. "I'm out there saying exactly what it is going to take to have a successful conclusion to this bill."

Conner said he's had several meetings with Peterson, but none with Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, although he said he met with Harkin's chief of staff.

"Chairman Peterson has been in town, and we have been talking a great deal on the 10 percent part" of the farm bill that is the most contentious, Conner said. "I think I have a better understanding of where he is coming from and what he needs in a farm bill, and I certainly think he better understands, first of all, that we're serious about our concerns, but also he understands what it will take to alleviate our concerns to move a farm bill to the president that he can enthusiastically sign.

The $286 billion five-year plan only provides about 10 percent in payments to farmers, mostly because farmers have had a banner year, especially with corn, soybeans and wheat. Nearly two-thirds of the bill goes toward nutrition programs, such as food stamps. The remainder funds conservation, energy and rural development programs.

American agriculture is in good times now, Conner said, with record exports of $82 billion in 2007 and $91 billion estimated for 2008. The administration wants to remove trade barriers now with Panama, Korea and Columbia, he said, which could open $3 billion in new export sales that include a new agreement passed last month with Peru.

The push for corn for ethanol production has boosted the price of that commodity, but also has farmers wanting to plant more corn by ending early their Conservation Reserve Program acres. CRP this year is already 2 million acres less than last year, he said, and reiterated that USDA won't allow farmers to put CRP acres in production without a penalty if before their contract expires.

CRP is a way to protect the environment by preserving land which is marginal for production, he said, "and it's not a way for the secretary of agriculture to control supply and demand." The energy bill signed last month will need 36 billion more gallons of in 15 years, starting 9 billion more this year.

Conner said he has a good relationship with Peterson and that "he wants to get this done quickly and he wants a bill the president can sign. That's important in and of itself and gets us to the table and makes a lot of progress. ... He's not looking to run over us, run around us or run through us, He wants to work with the administration to get a bill the president can sign. That's a huge step."

Conner will be relinquishing his position to former North Dakota Gov. Ed Schaeffer, whom Bush nominated to succeed Michael Johanns as agriculture secretary. Senate confirmation hearings for Schaeffer are in two weeks, Conner said. "I think that hearing will go smoothly," he said, adding that when the bid goes to the full Senate, he didn't expect any problems.

The administration's farm policy and tax policy are well established, he said, "Gov. Schaeffer is well aware of those and is anxious to work with the conferees and get to the same end I'm pressing toward. ... I look forward to having him on board to lead the agency, and I don't see it as impacting the direction of our farm policy at all. The two of us will work together in a seamless sort of way much as Mike Johanns and I worked together."