Senate wrangles over farm bill funding

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The Senate has yet to gain any progress on its farm bill version since returning to Washington earlier this month. The latest roadblock is an attempt by Senate Finance Committee Chairman Max Baucus, Montana, to stamp his imprint on the Agriculture's Committee's bill by requiring extra funding provided by his committee to pay for a permanent disaster aid package.

The current farm bill expires Sept. 30 and Senate Agriculture Committee Chairman Tom Harkin said this week Congress will seek at least a one-month extension of the bill, likely with additional short-term extensions into December.

Harkin originally planned to "mark-up" a farm bill the week of Sept. 24. That date is now moved back to the week of Oct. 8 with hopes of wrapping up debate before the Senate leaves for its Columbus Day recess. The Senate could simply introduce the House bill and offer amendments to it during floor debate.

Because of the delays, Harkin hasn't ruled out the possibility of an extension of the 2002 farm bill. However, the likelihood of a bill being passed in an election year is next to impossible. And passing a new bill when a new administration comes on board could be just as difficult.

In response to ongoing discussions, the National Association of Wheat Growers led a group of agriculture organizations in sending a letter to Senate leaders urging quick action on a long-term reauthorization of the farm bill.

The letter, addressed to Majority Leader Harry Reid, (D-Nev.), Minority Leader Mitch McConnell, (R-Ky.), Harkin and Senate Agriculture Ranking Member Saxby Chambliss (R-Ga.), also encouraged the Senate to use the House-passed bill as a starting point.

Baucus proposal

Baucus announced last week that he is seeking from his Committee a number of agriculture-related tax measures, including the establishment of a permanent disaster relief trust fund, the conversion of some conservation payments into tax credits and additional rural development and energy-related tax incentives for producers. The total dollar value of these incentives would likely be between $8 and $10 billion and, according to press reports, would likely come from tariff income that the Department of Agriculture receives.

Baucus' proposal would allow producers in the Wetlands Reserve Program, the Grassland Reserve Program and the Farm and Ranchlands Protection Program to choose tax credits over cash payments, freeing up money from the farm bill baseline. Baucus' proposal would also clarify that Conservation Reserve Program payments are rental income and not subject to self-employment taxes. Tax incentives could also be enacted that encourage growers to produce alternative crops for cellulosic ethanol and other forms of renewable fuels.

It is unclear how many of these details could change due to interests of others on the Finance Committee, including those who might seek more funds for farm bill priorities like specialty crops. There are a handful of members who are from specialty crop areas who sit on the Finance Committee but not the Agriculture Committee who may use this as a tool to get their regional desires into the final farm bill.

Harkin has indicated he would prefer to have new funds available to his committee for the Conservation Security Program, a program that received no extra funding in the House's version but has been championed by Harkin. Harkin has also indicated he opposes a permanent disaster program and would rather implement a revenue-based countercyclical program.

The agriculture chairman has yet to issue an official mark although several discussion drafts have been circulated.

Chambliss released a statement Tuesday urging Senate Finance Committee members to avoid using "tax hikes" to pay for the farm bill. Chambliss and five other members wrote Baucus and ranking member Sen. Chuck Grassley, (R-Iowa), to avoid a partisan divide that plagued House consideration of the farm bill approved in July.

"Since the Senate Finance Committee is the likely source of additional revenue, we wish to express our concern that any provisions to offset spending be carefully vetted and discussed with all members of the Agriculture Committee prior to markup," the Senators wrote in the letter. "We wish to avoid a situation such as that occurred in the House which brought forth an unfortunate series of events, straining the farm bill's long tradition of bipartisan and multi-regional support."

During the farm bill debate in the House of Representatives, controversial tax increases were added to the legislation after the measure had been discharged from the House Agriculture Committee. The divisive move shattered broad bipartisan support of the measure and consequently brought the bill under scrutiny from the U.S. Department of Agriculture and Secretary of Agriculture Mike Johanns threatened a veto of the bill.  

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