Conrad: Farm bill crosses big hurdle

GRAND FORKS — U.S. Senate and House negotiators reached a tentative agreement on funding sources for the 2008 farm bill late Friday, which could soon send the five-year bill to President Bush.

Sen. Kent Conrad, D-N.D., said the $280 billion bill enjoyed “enthusiastic bipartisan support” of negotiators, who are key members of the House Senate conference committee

The committee is working to reconcile differences between House and Senate versions that passed last year. Now, the negotiated compromise will go to the full conference commit-tee late Monday.

Conrad said he expects “ready acceptance” by the full conference committee.

A bill could be on the way to both houses to ratify by the end of the week. Hours before the deal, Bush signed a one-week extension that expires May 2.

“I don’t think there’s any question now that we can get this done by the eighth of May,” said Rep. Collin C. Peterson, the Minnesota Democrat who heads the Agriculture Committee.

A key breakthrough came when senior lawmakers, after an hours-long huddle in an ornate room in the Capitol, agreed on a $1.7 billion package of tax breaks to be included in the bill, and on how to finance the overall package.

With crop prices high and the federal budget squeezed, there’s less appetite in Washington for big farm programs, especially among congressional leaders who hail from urban areas. The sharp economic slump has many lawmakers focused more on job losses and home foreclosures than farm policy.

Conrad said it is important to note that the $10 billion in funding above the baseline spending will not require a tax increase. He said Rep. Earl Pomeroy, D-N.D., a member of the House Ways and Means Committee, and a member of the House Agriculture Committee, found the $10 billion from fees charged on goods coming into the country.

“The White House has told us informally that they would not veto an agreement on those funding sources,” Conrad said.

That doesn’t mean the administration won’t balk on other issues, but Conrad declined to name them. “Who knows? They change their position so many times it’s like watching a pretzel being bent,” he said.

The administration, too, has complained that senators like Conrad have changed their minds abruptly during the negotiations.

One of the lead negotiators, Conrad said he didn’t get everything he wanted, but that’s “living with reality.”

“This couldn’t have come out much better,” Conrad said. His farm disaster provision can remain in the bill, he said, but instead of the $5 billion he wanted, the bill is reduced to $3.8 billion but is in place for only four years.

“If we, God forbid, have another natural disaster, we don’t have to come asking for extra help in Washington,” he said. The provision was also a priority for Sen. Max Baucus, D-Mont.

“We’ll have a very robust, strong (disaster) program for both farmers and ranchers for four of the five years. The idea is that this program will prove itself and the fifth year of this pro-gram will be extended,” similar to a federal milk program. “We think it’s going to be considered taxpayer-friendly as well,” crediting North Dakota Agriculture Commissioner Roger Johnson for his advocacy of the program.

The bill also:

-Increases target prices for North Dakota’s major commodities, offering a more “fair distribution” between northern and southern growing areas.

-Adds $1.16 billion to energy production incentives. To close stubborn funding gaps, negotiators agreed to cut funding for a tax credit for blending corn-based ethanol with regular fuel by $1 billion, bringing the per-gallon credit from 51 cents to 45 cents. There will, how-ever, be $400 million for tax incentives for development of cellulosic ethanol.

-Funds Conrad’s own “Open Fields” program, which offers incentives for farmers who voluntarily open land for hunting and fishing.

-Increases funding for nutrition and feeding programs by $10.36 billion. A fresh fruit and vegetable snack program for schools is funded at over $1 billion, encouraging healthier eating among children.

-Makes conservation programs more farmer-friendly for the Upper Great Plains. The Conservation Security Program — a special emphasis for Senate Agriculture Committee Chairman Tom Harkin, D-Iowa — will be funded at $1.1 billion.

Conrad touted the “reform” in the farm bill, which includes a 2 percent cut in direct payments to farmers, and “tough” new payment limits.

It limits the net operating losses people can claim on their tax returns.

Negotiators were still working to finalize provisions limiting farm subsidies for the wealthy. Under the tentative deal, the government would eventually limit payments to high-earning “nonfarmers,” people who make only a small portion of their income from farming. But it wouldn’t impose any income limits on wealthy farmers, Peterson said.

The final version of the bill also cuts “administrative and operating” reimbursement to crop insurance companies by 2.3 percent.

The Grand Forks Herald and The Dickinson Press are both owned by Forum Communications Co.

AP wire reports contributed to this story.

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