Senate Passes Its Version of 2007 Farm Bill

What many farm policy observers initially expected to be dueling House and Senate versions of the 2007 Farm Bill actually turned out to look a lot alike.

The biggest difference essentially involves that perennial topic of debate associated with farm legislation --- how much should be spent on farm payments.

“House and Senate versions of the bill represent some differences in payment levels,” says Dr. Jim Novak, an Alabama Cooperative Extension System economist and Auburn University professor of agricultural economics, adding that differences reflect more of the philosophical differences of the chambers than dollar differences.

The Senate version of the farm bill, passed Oct. 23, doesn’t reflect any major departures from previous legislation, though Novak says senators are in a self-congratulatory mood over at least one new provision.

Under the Senate version, farmers, in lieu of traditional farm payments, could participate in a new program that would be known as the Average Crop Revenue Program.

“Basically, farmers would receive payments based on the average state target revenue if actual revenues fall below the target revenue,” Novak says.

“They would have an option of taking these program payments in lieu of the existing program. But they could not receive benefits under the old program if they elect to take the ACR.”

A program proposed in the House version earlier this year, known as the Revenue Countercyclical Payment, would base payments on the average farm revenue of the state.

“If average revenue for the state falls below the base period revenue, a payment would be triggered,” Novak says.

The House provision is based on an early proposal by the National Corn Growers Association.

What shape the final farm bill actually will take is anyone’s guess, Novak says.

“They’ve got those differences to iron out, and we don’t know where it’s going to fall,” Novak says, adding that the final version is likely to be a bill that resembles the 2002 Farm Bill.

“Farmers liked what they saw with the 2002 Farm Bill, and while there are changes outlined in both bills, the basic outline doesn't change a great deal in terms of commodity programs.”

Still, Novak says there is still the possibility for a couple of wild cards being played.

One involves the current World Trade Organization case against U.S. farm subsidies raised by Brazil and five cotton-producing West African nations.

Brazil has threatened to retaliate against U.S. intellectual property rights within its borders unless the federal government reduces payments on behalf of cotton farmers.

“You open up that intellectual property genie and you’re talking about a very serious threat, and I’m sure there will be some pressure from nonfarming interests to address the farm payments issue,” Novak says.

Another major factor in final deliberations on the farm bill is Indiana Republican Senator Richard Lugar, the major proponent of Freedom to Farm.

Lugar has vowed to bypass the Senate Agriculture Committee, taking his own alternative farm bill legislation directly to the Senate floor. Another major proposal also has emerged in the Senate Finance Committee, Novak says.

“And with floor amendments, threat of a veto, and joint conference committee we're still likely to see some changes,” he says.

Posted by Jim Langcuster at October 30, 2007 04:42 PM