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Thursday, October 14, 1999

Senate OKs $8.7 billion for farmers
Clinton expected to sign record funding package
By Philip Brasher
Associated Press

WASHINGTON - The Senate gave final approval Wednesday to a record $8.7 billion package of emergency farm assistance, the second big bailout in as many years for producers clobbered by low commodity prices, drought and flooding.
   "Prices have collapsed, farmers are in desperate trouble and there must be a government response," said Sen. Kent Conrad, D-N.D. Sen. Thad Cochran, R-Miss., said it was "a generous response to the needs in agriculture."
   The Senate's 74-26 vote sends the package to President Clinton for his expected signature.
   The size of this year's bailout, nearly $3 billion more than what Congress approved a year ago, is raising questions about the future of the government's market-oriented farm policy. And lawmakers may not be through doling out money to farmers this year.
   Congressional leaders are considering additional assistance for producers whose farms were washed out last month by Hurricane Floyd. Senate Minority Leader Tom Daschle, D-S.D., estimated $1 billion would be needed.
   What opposition there was to the package Wednesday came primarily from Eastern senators who said it didn't provide enough disaster assistance.
   Most of the money in the package, about $6 billion, is intended to help farmers cope with a second year of depressed commodity prices, with the bulk of the aid going to the Midwestern Corn Belt. Farmers in Iowa would share $610 million, the most of any state, followed by Illinois with $535 million, according to the Agriculture Department.
   The measure also provides $1.4 billion for weather-related crop and livestock losses, including $200 million earmarked for Eastern livestock producers who were hurt by this summer's drought; $328 million to compensate tobacco producers for falling cigarette sales; and $125 million in subsidies for dairy producers.
   Additionally, the legislation extends the government's price-support program for dairy products through next year and requires meatpackers to start reporting the prices they pay for cattle and hogs. Livestock producers say that will make it easier for them to bargain with meat processors.
   With this package, direct government payments to farmers are expected to reach $21 billion this year, eclipsing the old record of $17 billion in 1987.
   History of dependence
   Democrats seized on the size of the bailout to argue that that the 1996 Freedom to Farm law isn't working, and even Republicans are saying it's time to consider ways to guarantee more help to producers when commodity prices fall. Unless the law is changed, "we will see year after expensive year in emergency payments," said Sen. Richard Durbin, D-Ill.
   The law ended a Depression-era system of production controls and price supports in attempt to get growers to wean farmers from their dependence on government programs.
   The stockpiles of grain that have kept commodity prices low for two years continue to grow and are expected to persist well into next year. With USDA predicting only a modest increase in farm exports next year, farm groups are likely to be pushing for another multibillion-dollar aid package in 2000.
   "Sooner or later we're going to have to ask the fundamental question, 'Is this going to be the only sector of our economy not governed by the free market?' " said Pete Sepp, a spokesman for the National Taxpayers Union.
   "As long as Congress regards low prices in agriculture as a crisis, taxpayers will be footing the bill forever."
   Boosting farm trade
   Republicans said the Clinton administration hasn't done enough to boost farm trade.
   "The long-term solution (is) opening up more opportunities for our producers to sell their products," said Sen. Chuck Hagel, R-Neb. "The basic underlying principle of Freedom to Farm should be preserved."
   The first checks to farmers would go out within two weeks or so of when the president signs the legislation, according to USDA officials. Claims for disaster assistance would take much longer to process and may be paid in two installments.
   The money is included in a $69 billion appropriations bill that will fund operations of USDA, with its myriad farm and nutrition programs, and the Food and Drug Administration for the 2000 budget year.

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