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Farm Bill Receives Two-Week Extension as Conferees Debate Final Details

May 05, 2008

Farm Bill Receives Two-Week Extension as Conferees Debate Final Details

Senator Tom Harkin (D-IA), chairman of the U.S. House and Senate conference committee on the new Farm Bill, announced last Friday that the committee had agreed upon most of the major elements of the bill. Also on Friday, President George Bush agreed to extend existing agriculture policies until May 16 to allow conferees time to finalize remaining issues and send the completed legislation to Congress for approval.

"The Senate-House conference committee on the Farm Bill is now in the final stages of a strong, bipartisan bill that that will bring new funding and better policy in core Farm Bill initiatives - conservation, energy, nutrition and rural development - while continuing and strengthening farm income protection," Harkin said. "Congressional negotiators have come a long way and are preparing to send the President a Farm Bill he can sign."

Some published reports, however, have said the White House still objects to some of the provisions in the proposed bill, and the outstanding veto threat remains.

Regarding dairy, the conferees remain divided on a key issue: the dairy import assessment. Harkin and Senate Finance Committee Chairman Max Baucus (D-MT) have proposed excluding the assessment, which would impose a new tax on imported dairy products. House Agriculture Committee Chairman Colin Peterson (D-MN), however, is pushing to include the controversial provision. IDFA supports the senators' position opposing the new assessment, because it is not consistent with U.S. trade obligations and would invite the imposition of retaliatory measures - such as taxes - on growing U.S. dairy exports.

Other dairy elements in the bill appear more certain, including extensions of the dairy price support and Milk Income Loss Contract payments with undisclosed changes proposed by producer groups. The bill also currently contains provisions for dairy forward contracting and a commission to improve federal milk pricing policies. These two provisions were priorities for IDFA.

Peterson also has proposed provisions that would increase U.S. sugar loans, and guarantee allotments for domestic producers at nearly 85% of the market. In addition, Peterson is pushing a plan to use excess sugar for ethanol production instead of allowing it to be sold to consumers. The White House has said it will not sign a Farm Bill that includes this measure. IDFA backs the administration's opposition to this proposal, which would not permit the U.S. Department of Agriculture to dispose of excess sugar for any use other than making ethanol, even though other uses could reduce taxpayer costs.

The conferees plan to send the final version of the bill to the floors of the House and Senate this week, and then forward it to the White House before May 16.

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Posted May 5, 2008

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