Auburn, July 19---As debate ensues over the 2001 Farm Bill, at least one expert predicts the new farm legislation will be a kinder, gentler version of the current Farm Bill.

"We’ll probably end up with some version of the current Farm Bill, but one that also includes programs from previous Farm Bills – sort of a kinder, gentler version of what we have now," says Dr. James Novak, an Alabama Cooperative Extension System agricultural economist.

Prior to 1996, farm legislation allowed farmers to set aside some of their acreage for conservation use in order to receive payments.

All of that changed with the passage of the 1996 Farm Bill, also known as the Freedom-to-Farm Act.

Born in an era of severe budgetary restraints, Freedom-to-Farm set out with the ambitious goal of eliminating all farm programs completely with the exception of crop insurance by 2002. To allow farmers more flexibility, it also eliminated set-aside requirements while still allowing them to receive payments.

However, sharp declines in farm prices forced Congress to undertake several changes midcourse, Novak says.

"In order to keep Freedom-to-Farm from turning out to be Freedom-to-Fail, Congress ended up providing billions of dollars more in farm assistance," Novak says.

Despite these setbacks, supporters of Freedom-to-Farm still hope to incorporate the 1996 principles into the 2001 Farm Bill.

However, while farmers are likely to end up with some version of the 1996 Farm Bill, they’re also likely to see a smattering of programs included in previous farm bills.

The most visible sign of change, Novak says, is the presence of Iowa Senator Tom Harkin as chairman of the Senate Agricultural Committee – a result of the recent change from a Republican- to a Democratic-controlled Senate.

"Harkin has been a fierce critic of Freedom-to-Farm, and the mere fact he’s serving as chairman of the committee is a sign that there will be changes," Novak says. "He enjoys the support of the Corn and Soybean Growers associations, two groups that have been pushing for a return of the parity-based price system."

One proposal under this parity system calls for a doubling of the corn loan rate, while the cotton loan rate would be raised to about 81 cents.

While such steep hikes aren’t likely, Novak believes the change of Senate leadership nevertheless increases the likelihood loan rates will be raised.

He also believes the new farm bill also could include some form of the Flexible Fallow Program, which would allow farmers a sliding loan rate based on a voluntary acreage set aside.

If such a program ends up in the new farm bill, it could bare a close resemblance to the one proposed by South Dakota Senator Tim Johnson, Novak says.

"Under Johnson’s plan, the more acreage farmers decided to set aside, the higher the loan rate they would receive," he says. "Up to 30 percent of acreage could be set aside in exchange for the highest loan rate."

More surprises also may be in store, Novak says.

For example, an unlikely coalition comprised of several hunting and environmental groups, including the National Rifle Association and the Sierra Club, wants to transform the new farm bill into a landmark conservation act.

Members of these organizations are lobbying Congress to earmark money to protect another million acres of wetlands and to return an additional 10 million acres of cropland into trees and grass.

As Novak sees it, there is a strong incentive among many members of Congress to support this plan.

"As one might imagine, the proposal has the strong support of senators and representatives in New England and the Middle-Atlantic states who don’t get very much of the $20 billion in subsidies paid annually to producers of corn, cotton and soybeans," Novak says.

No one can know for sure which, if any, of these proposals actually will end up in the 2001 Farm Bill. Even so, Novak says, several things have changed since the last bill was enacted in 1996 – factors that undoubtedly will shape debate.

"For starters, farmers face an economic climate vastly different from that of 1996, when the last bill was passed," Novak says. "Budgetary constraints, which drove debate over the last farm bill, aren’t a major concern in 2001."

As Novak sees it, the factors most likely to drive current debate are sagging demand for U.S. farm products and crop surpluses.

Novak believes the new bill likely will incorporate some version of a supplemental income payment (SIPP) to allow farmers some relief from periodic shortfalls in farm income.

These payments, however, will have to be weighed against the cost of other proposals, he says. They also will be limited by trade treaty provisions and the recent $1.3 trillion tax cut. In addition, any conservation, rural development and other spending authorized by the new bill also will have to be balanced against the cost of commodity programs.

"Yes, we’ll end up with a kinder, gentler Freedom-to-Farm bill, but also one that is fiscally constrained as well, " Novak says.

(Source: Dr. James Novak, Alabama Cooperative Extension System agricultural economist.)