Major differences in opinion are emerging in Congress over the future of the 2001 Farm Bill. How these differences ultimately are resolved is anyone's guess.

"It's going to be a really interesting and, I'll bet, lively discussion," says Dr. Jim Novak, an Alabama Cooperative Extension System agricultural economist. "I'd like to be a fly in the room when Conference Committee members try to reconcile the House and Senate versions of the farm bill."

The House Agriculture Committee version of the farm bill emerged as a return to older approaches to farm policy, incorporating many of the farm subsidies that were supposed to be phased out in the 1996 Farm Bill.

Sponsored by House Agriculture Committee members Larry Combest (R-Texas) and Charles Stenholm (D-Texas), the bill would include subsidies for the usual farm commodities, corn, cotton, peanuts and tobacco, and would even add new ones for other commodities that are currently not supported.

The House Agriculture Committee version is touted as a consensus farm bill. By including subsidies in the new bill, sponsors hope to win bipartisan support among large facets of the farming community.

Even so, the House bill has its share of critics, both in the House and the Senate. One of the most vocal critics is Senate Agriculture Committee Chairman Tom Harkin (D-Iowa), who believes the bill places too much emphasis on subsidies and not enough on conservation practices.

Harkin believes the House bill focuses too much on supporting large-scale farmers who grow basic crops, such as cotton, corn and wheat, at the expense of small-scale farmers. He also contends subsidies often do more harm than good by encouraging overproduction, distorting trade and depressing prices.

It is believed that the Senate bill will focus on enhancing conservation practices, expanding international trade and encouraging more economic development in rural areas. Part of this bill may involve set-asides or fallow programs in which producers would receive financial incentives to take cropland out of production, planting it in trees or grasses instead.

While conceding that subsidies without set-asides often contribute to overproduction and depressed prices, Novak says phasing out these subsidies and replacing them with conservation incentives would not solve all of the problems.

"From a conservation and agronomic standpoint, this is sound policy," Novak says. "Providing farmers with incentives to set aside and fallow acreage would lead to healthier land, less crop disease and increased farm productivity over the long term. On the other hand, it could be perceived by foreign competitors as a green light to increase production," he says.

"In the past, foreign competitors in the Southern Hemisphere, such as Brazil and Argentina, have viewed our set-aside programs as a chance to increase production to fill the gap," Novak says. "Rather than raising farm prices by limiting production, we're encouraging our competitors to expand production, which brings us back to square one."

Supporters of the Senate version also believe phasing out subsidies to large farmers will ensure small-scale farmers have a better chance of staying in farming. But in Novak’s opinion, this goes against longtime experience.

"The long-term trend has been for commercial family farms to get bigger in response to changing economic conditions and to the expanding efficiency of farm technology," he says. "Whether subsidies are in place or not, family and commercial farms must do what it takes to stay profitable, and this may involve becoming larger and more diversified."

As it turns out, Harkin and Luger could have the last laugh. A projected budget crunch will likely result in a scaled-down version farm bill, perhaps more along the lines of the Senate version.

Also, while the House version has the support of major farm lobbies, the Senate ultimately may gain the unlikely support of the U.S. Department of Agriculture.

While the Agriculture Department is expected to unveil its own version of the farm bill in September, Agriculture Secretary Ann M. Veneman has supported efforts toward expanding overseas markets -- a major focus of the Senate bill.

She's also been a vocal critic of subsidies, which she says are "trade distorting."

(Source: Dr. Jim Novak, Extension agricultural economist, 334-844-5686.)