020514 Farm Bill Final Passage Predicted

Washington - Democratic leaders predict an election-year farm bill that boosts agriculture spending by 70% will win final approval in the Senate next week.

The bill, which was approved 280-141 by the House, would pour billions of dollars in subsidies into Midwestern and Southern states that are political battlegrounds for lawmakers in both parties.

Senate Agriculture Committee Chairman Tom Harkin, an Iowa Democrat who is up for re-election this year, said the legislation was "the right approach for farm policy."

"I am confident that this farm bill will be completed early next week and signed into law shortly after."

Although his administration has criticized policies that the bill continues, President Bush said the legislation would "help ensure the immediate and long-term viability of our farm economy."

The bill marks a reversal of the 1996 Freedom to Farm law that was supposed to wean farmers from government subsidies.

The bill, which has broad support among major farm groups, would authorize $180 billion in spending over the next 10 years, a $73.5 billion increase over existing programs.

It fattens subsidies for grain and cotton farmers, who have traditionally dominated federal farm programs, and provides new payments for everything from milk and lentils to honey and wool.

An 80% increase in land-conservation programs would benefit livestock farms and fruit and vegetable growers who historically have received little federal cash.

"We're going back to a strong government presence in agriculture," said Luther Tweeten, an agricultural economist at Ohio State University. "It certainly gives some security to farmers. It comes at a very high cost to taxpayers and to the national economy, however."

The political implications were huge. Several major farm states probably will have close Senate races this fall, including Arkansas, Georgia, Iowa, Minnesota and South Dakota.

Bush will need to retain the solid support he received in 2000 across the Plains and South if he seeks re-election in 2004.

Another beneficiary: Sen. James Jeffords, I-Vt., who wanted the new dairy subsidies to replace a New England price-setting system that expired last year. Senate Democrats owe their majority status to Jeffords' switch from the GOP in 2001.

"Throw in an important election season and it makes it very difficult" to stop big subsidies, said Rep. Ron Kind, D-Wis. "It's been a bad process and it's resulted in bad policy."

Economists say the subsidies are likely to encourage overproduction of crops and inflate land rents, which raises costs for farmers who do not own their own land. Bush's support for the bill represented a switch from his administration's earlier criticism of farm subsidies that the legislation continues and expands.

The bill's increased subsidies have angered foreign competitors. The European Union said Thursday it was considering a challenge of the payments before the World Trade Organization. Under WTO limits, certain U.S. farm subsidies cannot exceed $19.1 billion annually. The bill authorizes the Agriculture Department to adjust subsidies to stay within the cap.

Among the countries that would be hardest hit if the U.S. subsidies restrain world commodity prices is Egypt, a major cotton producer, economists say.

But House Agriculture Committee Chairman Larry Combest, R-Texas, said the bill "is for rural America. It's not for rural Mexico, it's not for rural Canada, it's not for rural Europe."

The Freedom to Farm law, which ended a Depression-era system of production controls, was supposed to bring some control to farm spending and discourage overproduction of surplus crops. But when commodity prices plummeted in the late 1990s, Congress responded with a series of multibillion dollar bailouts.

The Senate will vote on the farm bill next Wednesday, said Majority Leader Tom Daschle, D-S.D. Attempts to get an earlier vote ran into objections from Republicans, he said.

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