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Farm bill faces veto

The euphoria Thursday over congressional agreement on a new five-year federal farm bill quickly dissipated as the Bush administration indicated it would veto it.

House and Senate conferees hailed the $300 billion program as providing a safety net for farmers while increasing funds for nutrition programs at a time when food prices are soaring and families find it harder to afford groceries.

In a Web cast news conference Thursday, U.S. Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, said the process was successful like passing a kidney stone. U.S. House Agriculture Committee Chairman Collin Peterson, DFL-7th District, joked he was going turkey hunting this weekend and may not come back.

"This is a strong, bipartisan farm bill that benefits every American from Cumming, Iowa, to New York City," said Harkin. "The bill provides a strong safety net, so it's good for our farmers and producers. Consumers will like it because it will increase farmers' markets and ensure a safe, dependable supply of high quality food."

All the new money for the bill -- $10.4 billion -- was targeted to nutrition programs such as food stamps, he said.

But the Bush administration later Thursday said the bill, which should reach House and Senate floors on Wednesday, doesn't go far enough in limiting subsidies to farmers and non-farmers who make more than $250,000.

"At a time of record farm income, Congress decided to further increase farm subsidy rates, qualify more people for taxpayer support, and move programs toward more government control. We should not remove farm commodities from market forces and make them dependent upon government support programs," U.S. Agriculture Secretary Ed Schafer said in a statement issued late Thursday.

"For a year and a half, the administration has been consistently clear that Congress needs to move forward with a good farm bill that the president can sign," Schafer said. "They have failed to do so. This legislation lacks meaningful farm program reform and expands the size and scope of government. ... The president will veto this bill."

U.S. Sen. Norm Coleman, R-Minn., and a member of the Senate Agriculture Committee, told Minnesota reporters in a telephone news conference that he supports the conferees' bill and will work to override any veto by Bush.

The bill has "substantial reform" in limiting subsidies, Coleman said, "we've taken care of getting Donald Trumps out of getting direct payments, getting compensation under the farm program. The president has indicated his desire to veto this bill. If he does, I will work very, very hard to override that veto."

Coleman said he was confident there are enough votes in the Senate to override a veto, and was hopeful the same can be done in the House.

"I would hope the president doesn't veto this bill because it's important for Americans, it's important for states like Minnesota that depend on an ag economy as being a critical part of our overall economic health at a time when we're facing challenges throughout this country," he said. "In terms of the economy, this farm bill is critical."

There has been an effort to meet the president halfway, Coleman said.

Conferees said there were $2.5 billion in savings through reform provisions in the bill.

Peterson said the bill puts "hard caps" on direct subsidy payments to non-farmers with adjusted gross incomes of more than $500,000 and to farmers who make more than $750,000. New is a cap on conservation payments to non-farmers making more than $1 million.

The figures go more than halfway to what Bush wanted, Harkin said, with current caps at $2.5 million income for non-farmers to receive direct farm subsidies and no caps for farmers or for non-farmers receiving conservation payments.

The bill also does away with the three-entity rule, where farm program payments can go to corporations and partnerships and allowing a farmer to collect twice the enacted payment limit. Instead, payments will be directed to individuals.

U.S. Sen. Amy Klobuchar, DFL-Minn., also a member of the Senate Agriculture Committee, called the compromise a "landmark reform of federal farm payments," noting that the $750,000 cap was similar to an amendment she offered last year.

"This has been an uphill struggle,'' Klobuchar said in a statement. "But it was worth the effort to make sure that we are spending the public's money wisely and that federal support is going to the nation's hardworking farmers and not to urban millionaires.''

Upon learning Bush intends to veto the bill, Harkin said in a statement that the "White House seems intent on destroying the harvest just as the seeds are being planted." The compromise is far from perfect but balances regional and other interests.

"Farmers in Iowa and around the country are beginning to plant for the season," Harkin said. "Here in Washington, Congress is fulfilling its promise to enact a farm bill that's good for all America - farming families and rural communities, nutrition assistance for low-income Americans, fresh fruits and vegetables for school children, more sources of renewable energy and conservation of our natural resources and a disaster program."

The White House balked at a provision for permanent disaster funding, set at $4 billion in the bill, but is something fellow Republican Coleman strongly supports.

"I pushed for a ag disaster assistance program up in Kittson County a couple of years ago and heard from farmers tell me about the need to have disaster assistance," Coleman said.

Peterson, at the Capitol news conference, chastised reporters and editorialists for dwelling on the payments to farmers, that the farm bill is much more than that.

"This farm bill only gives $36 billion to $40 billion to farmers," he said, adding that "73.5 percent of the farm bill goes to nutrition programs and only 16.1 percent to commodity/crop insurance/disaster programs. That compares to the 2002 Farm Bill with 28.5 percent to commodity programs and 66 percent to nutrition."

Also, funding for conservation programs is 7 percent of the new farm bill and was only 1.2 percent of the last five-year farm bill.

And through better market prices for farm products, the farm bill baseline includes $20 billion in reductions through commodity program savings.

Both Coleman and Klobuchar pointed out parts of the bill they helped author.

The final farm bill language includes Klobuchar's provisions offering farmers incentives to produce dedicated energy crops, in addition to programs creating grants and loan guarantees for cellulosic biorefineries and expanding an on-farm renewable energy program that helps farmers establish wind projects and biomass digesters.

"This is a strong, bipartisan bill,'' Klobuchar said. "I am particularly pleased that the incentives for cellulosic biofuels - the next generation of renewable, homegrown energy - remain in the bill."

Coleman praised provisions to increase the sugar loan rate by three-fourths cent per pound, the first increase in 20 years. It also includes his provision for a sugar ethanol program that will help mitigate excessive imports under the North American Free Trade Agreement and present new opportunities for sugar producers.

The Red River Valley sugar beet industry provides more than $2 billion a year to Minnesota's economy and sustains nearly 40,000 jobs, he said.

"America must diversify the feedstocks used to produce ethanol in order to build a sustainable and secure renewable fuels industry that can reduce our dependence on foreign oil -- and sugar ethanol has the potential to play an important role in that effort," Coleman said. "Meanwhile, this sugar ethanol program will address the significant challenges presented by the excess sugar coming in from NAFTA, and it does so in a way that saves millions of dollars."

He cited Brazil, where much of that country's ethanol fuel comes from sugar cane ethanol.

The bill also helps Minnesota's dairy industry by continuing the Milk Income Loss Contract Program, Coleman said, successfully having his provision included to increase the payment rate back to 45 percent from the current 34 percent level. It will also adjust the price trigger up when feed prices increase.

On the nutrition side, a Coleman provision increases by $10 million a year funding for the Emergency Food Assistance Program, which totals a $500 million increase over five years for food banks and homeless shelters.

Both Coleman and Klobuchar hailed new energy provisions in the farm bill, with Coleman citing a new $1 per gallon credit for ethanol fuel to be developed from cellulostic sources, such as wood waste or switch grass.

"We've got to get to cellulostic -- that is our future," Coleman said. "The is the key to lessening any conflict between food, feed and fuel in terms of grains."

The bill will be scored over the weekend for program funding totals, Peterson said, with debate on the House floor starting Wednesday. A similar schedule is assumed in the Senate, Harkin said.

Congress is working under an extension of the 2002 Farm Bill, which expired in September.