For a better perspective on current Farm Bill negotiations regarding funding issues, a brief and very general snapshot overview of how lawmakers have moved over the past two months into the current circumstances is provided below.

At the conclusion of the funding background is a summary of more recent developments.

Farm Bill Funding Background

* February 12- David Rogers reported at Politico.com that, “Trying to salvage stalled farm bill negotiations, House Agriculture Committee Chairman Collin Peterson outlined a 10-year-plan that would impose tighter payment limits on crop subsidies and pare back demands for added revenues to meet the cost of the legislation.

“Peterson, who caucused with Republicans and Democrats on his panel Tuesday night, said later he would set a revenue target of about $6 billion or roughly half the $11 billion to $12 billion level still being sought by senators.”

* February 13- Congressional Quarterly reported that, “In an effort to win White House support for a new version of the farm bill, House lawmakers are proposing to reduce the measure’s agriculture subsidies as well as the tax revenue designed to pay for them.

“The changes are outlined in a new plan drafted by Collin C. Peterson, D-Minn., the Agriculture Committee chairman, and Robert W. Goodlatte of Virginia, the panel’s ranking Republican.”

The CQ article noted that, “Most of the money saved under the bill — about $6.5 billion — would come from changes to commodity-crop programs.

“Specifically, farmers would not get direct payments, which are paid annually based on what they grow and their total acreage, during the ninth year of the bill’s 10-year projections. The move would result in about $5.2 billion less in spending, according to the draft bill.”

* February 14- The Peterson-Goodlatte framework proposal was made available; and, Reuters writer Charles Abbott reported that, “The Bush administration says it can accept a spending increase of $6 billion over 10 years. Leaders of the House Agriculture Committee assembled a farm bill ‘framework’ to show that good policy can be written at that level, which is sharply less of an increase than Congress has proposed.”

DTN writer Chris Clayton reported (2.14) that, “Major commodity and agriculture groups banded together Thursday to argue that a spending plan for the farm bill takes too much money away from farmers and shifts those dollars to other parts of the farm bill.

“A letter to the chairmen and ranking members of the House and Senate Agriculture Committees said a new plan offered Wednesday by the House Agriculture Committee was ‘seriously under-funded’ and proposed cuts to the commodity programs were ‘excessive.’”

* February 15- DTN Political Correspondent Jerry Hagstrom reported that, “Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, and ranking member Saxby Chambliss, R-Ga., today sent the House Agriculture Committee a farm bill conference proposal for a five-year bill that would spend $12.3 billion over the current baseline over a 10-year period.”

(Note: related press release available here; letter from Senators Harkin and Chambliss to Ag Committee Chairman Collin Peterson (D-Minn.) and Ranking Member Robert Goodlatte (R-Virginia) is available here.)

“On Tuesday the House Agriculture Committee, after consultation with the Bush administration, proposed a 10-year farm bill with $6 billion in spending over the baseline. Farm groups had said the farm bill needs to spend $12.5 billion over the baseline over 10 years to avoid cutting farm subsidiesto pay for other parts of the bill.”

* February 18- Peter Shinn of Brownfield reported that, “The Senate Agriculture Committee on Friday issued a counter-offer on the farm bill. The Senate version spends about $12.3 billion dollars more than allowed by last year’s Congressional Budget Office baseline for ag programs. The House Ag Committee’s farm bill offer last week was a comparatively modest $6 billion dollars over budget baseline. The White House has called the Senate’s offer a non-starter, largely because it still requires raising revenue to fund the legislation.”

* February 21- DTN Political Correspondent Jerry Hagstrom reported that, “Key House and Senate agriculture leaders are putting the final touches on an agreement for a new farm bill that would cost $9 billion over the current baseline over a 10-year period, with a separate deal for a permanent farm disaster aid program, DTN has learned.”

Mr. Hagstrom added that, “The Capitol Hill source said that [House Agriculture Committee Chairman Collin] Peterson [D-Minn.], House Agriculture Committee ranking member Bob Goodlatte, R-Va.; Senate Agriculture Committee Chairman Tom Harkin, D-Iowa; Senate Agriculture Committee ranking member Saxby Chambliss, R-Ga.; Senate Budget Committee Chairman KentConrad, D-N.D.; and Senate Finance Committee Chairman Max Baucus, D-Mont., have all been involved in a ‘group’ effort to write the document and that a deal could be announced as early as Friday; however, because other members are difficult to reach during the congressional break, it might not be finalized until next week. The source said the exact amount of the increase for food stamps and other nutrition programs is still under discussion and will be somewhere between the House- and Senate-passed bills.”

* February 25- Philip Brasher noted at The Des Moines Register’s Cash Crops blog that, “Lawmakers are working toward reaching a deal this week on a spending limit for the farm bill, likely about $9 billion over the cost of existing programs…. Kate Cyrul, a spokeswoman for the Senate Agriculture Committee, said ‘we’re hoping that there will be some movement this week.’”

* February 26- DTN writer Chris Clayton reported that, “Congressional tax-writing committees will work to come to terms by the end of the week on provisions to add about $10 billion in spending to the farm bill, House Agriculture Committee Chairman Collin Peterson, D-Minn., said Tuesday evening.

“An agreement to bring this farm bill to conclusion was one of the main goals of a meeting between agriculture and tax-writing committee leaders and top Democratic Congressional leaders Tuesday night. Besides finding a cost figure that members of Congress could agree upon, lawmakers have to find a way to pay for added expense which appeals to the House and Senate, and then can be sold to the White House.”

* March 3- Peter Shinn reported at Brownfield that, “And according to [House Ag Committee Chairman Collin Peterson], another piece of the farm bill puzzle has fallen into place. On Saturday, Peterson said USDA sent him a detailed, written farm bill counter-offer that agrees to spend $10 billion over the Congressional Budget Office baseline for farm programs and also included a list of acceptable budget offsets.

“But Peterson also said some of those proposed budget offsets from the Bush administration include items like lowering Medicare reimbursements for those on oxygen. And, Peterson added, the Bush administration’s farm bill counter-offer also contains a long list of so-called reforms that it says are non-negotiable. Peterson said that list of non-negotiable reforms includes, among many other things, inclusion of a revenue based counter-cyclical program with recourse loans, elimination of the sugar-to-ethanol program, ending the prohibition of planting fruits and vegetables on program crop acres and setting aside 25% of emergency international food aid funds under PL-480 for cash purchases of local commodities in the countries receiving U.S. food aid.”

* March 5- DTN Political Correspondent Jerry Hagstrom reported that, “Democratic and Republican members of the Senate Finance Committee who are also farm bill conferees have agreed on a $12 billion package of farm bill offsets to offer the House and the Bush administration, a key Senate source said Wednesday.

“The package would involve $8 billion in spending cuts and $4 billion in provisions that would increase revenue. House and Senate farm leaders and the Bush administration have agreed to a $10 billion increase over the farm bill baseline over 10 years and it is unclear how a $12 billion finance package would fit with that $10 billion plan.

“The Bush administration has reacted positively to the spending cuts, but negatively to the revenue raisers, the source said.”

* March 10- DTN Political Correspondent Jerry Hagstrom reported that, “The chairman of the House Agriculture Committee said Monday that progress on the farm bill is being complicated by senators’ attempts to turn it into a tax bill and by the difficulties in writing a permanent disaster program.”

* March 12- Congressional Quarterly reported that, “The Senate on Wednesday passed a 30-day extension of the nation’s farm law to give bicameral negotiators more time to hammer out a deal on a long-term agriculture policy overhaul.”

* March 13- “If a final agreement is not reached by April 18, I call on Congress to extend current law for at least one year,” President Bush said in a statement.

* March 17- Jerry Hagstrom writing at AgWeek.com, reported that, “Congress left town March 14 for a two-week spring recess, but congressional leaders agreed to continue work on a bill that would add $10 billion over 10 years to a bill that already costs $597 billion.”

* March 18- DTN writer Chris Clayton reported that, “A framework agreement on how to divvy up $10 billion in extra funding for the farm bill may be ‘dead on arrival’ because itwould drastically cut proposed funds to create a permanent disaster plan for farmers.

“Demonstrating the inner-fighting going on with these talks, Senate Finance Committee Chairman Max Baucus, D-Mont., issued an angry statement Tuesday afternoon after learning the House and Senate Agriculture Committees would attempt to cut proposed funding for a permanent disaster program from $5.1 billion to $2.2 billion over a five-year span. Baucus said he opposes ‘slashing’ the disaster package.”

* March 27- DTN writers Jerry Hagstrom and Chris Clayton reported that, “Senate Budget Committee Chairman Kent Conrad, D-N.D., told DTN on Thursday he would be satisfied with a $4.05 billion farm disaster program that farm bill negotiators appear likely to add to the new farm bill.

“Last week Conrad was among those who said a plan to provide only $2.24 billion for disaster aid was ‘unacceptable.’

“The new allocation for disaster aid was revealed in a new farm-bill framework agreement that DTN obtained on Thursday. According to the document, the chairmen and ranking members of the House and Senate agriculture committees are considering a new framework agreement under which the money for the new weather-related disaster aid program would rise to $4.05 billion, while the increases for conservation, specialtycrops and energy programs would be lower than in the proposal crafted last week.”

* March 28- Congressional Quarterly writer Catharine Richert that, “For many on Capitol Hill, this week is looking a lot like do-or-die for the farm bill.

“Lawmakers and staff from the House and Senate Agriculture committees spent the two-week spring recess deciding how they’d spend an extra $10 billion above the bill’s budget baseline they’ve been promised by the Senate Finance and House Ways and Means panels.

“But there’s a problem: The Agriculture Committee members say they haven’t seen plans from the tax-writing panels on how they’ll come up with the cash.”

* April 1- Reuters writer Charles Abbott reported that, “Lawmakers need to put more reforms into the new U.S. farm law, the chairman of the House tax committee said on Tuesday, suggesting more money for federal anti-hunger programs.

“‘Our farm bill is not the most popular legislation,’ chairman Charles Rangel of the House Ways and Means Committee said after meeting his Senate counterpart to discuss ways to pay for a $10 billion spending increase for the new law.”

* April 3- Philip Brasher, writing at The Des Moines Register’s Cash Crops Blog, explained that, “The biggest sticking points on the farm bill have come to down to how much money to put into farm disaster assistance and to food stamps and other nutrition programs.

“That’s the word today from Senate agriculture chairman Tom Harkin.

“The disaster program is a must for two powerful Democrats: Kent Conrad of North Dakota and the chairman of the Senate Finance Committee, Max Baucus of Montana. Conrad is chairman of the Senate Budget Committee and is a member of both the finance and agriculture committees.”

Mr. Brasher noted that, “At the same time, Senate Republicans are resisting any cuts to the annual fixed payments that go to grain and cotton farmers.”

* April 8- Philip Brasher, writing at The Des Moines Register’s Cash Crops Blog, pointed out that, “The chairmen of the House and Senate agriculture committees say the biggest hangup on the farm bill continues to be the dispute over how to fund it and comply with pay-as-you-go budget rules.

“‘The biggest problem we’re facing is the issue of offsets,’ said Rep. Collin Peterson, the House agriculture chairman.

“Peterson and his Senate counterpart, Tom Harkin of Iowa, said the funding issue is the problem of the House and Senate tax-writing committees.”

* April 9- Bill Tomson reported that, “The U.S. House of Representatives Wednesday appointed conferees to work with senators to create a unified farm bill, laying down a blueprint for agricultural and nutrition policy for five years.” (For a list of the House conferees, see this House Ag Committee press release).

Mr. Tomson added that, “The House, in a 400-to-11 vote Wednesday evening, approved a non-binding ‘motion to instruct’ farm bill conferees not to use tax measures to fund the 2008 farm bill,” the article said.

“For more on this “motion to instruct,” see this press release issued on Wednesday by Agriculture Ranking Member Bob Goodlatte (R-Virginia).”

* April 10- Chris Clayton, writing at the DTN Ag Policy Blog, indicated that, “The long-awaited first public conference meeting on the farm bill will happen Thursday morning at the Capitol.

“It comes as the House came together on a bi-partisan agreement to spend $6 billion above the baseline on the farm bill and do it without any tax increases. House Democratic and Republican leadership apparently have agreed to the approach.

“What’s effectively left out? The $4 billion permanent disaster program, along with a bevy of tax cuts in the Senate farm bill that range from tax cuts for the Conservation Reserve Program to accelerated depreciation for race horses and a capital-gains deduction for the timber industry. There were more than 60 such measures in the Senate farm bill.

“The lack of negotiating progress between Senate Finance Committee Chairman Max Baucus, D-Mont., and House Ways and Means Committee Chairman Charles Rangel, D-N.Y., led to the decision to move ahead with the House proposal.”

Recent Developments

DTN Political Correspondent Jerry Hagstrom reported yesterday that, “Senate farm bill conferees Friday afternoon finalized an offer to the House of Representatives of a $12.5 billion package that would increase spending in the farm bill by $10 billion over 10 years. The legislation includes a new disaster aid program and provides $2.5 billion in agricultural tax breaks. [Note: Related press release available here, funding details available here].

“Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, also scheduled a conference between the House and the Senate at 3:30 p.m on Monday in Washington.”

Mr. Hagstrom explained that, “Senate conferees want to use different offsets than the credit-card reporting requirement the House offered. Under pay-as-you-go rules in the House, spending cannot be increased unless it is cut somewhere else or government revenue is raised.

“House Agriculture Committee Chairman Collin Peterson, D-Minn., made a $5.5 billion offer without the disaster aid and tax package, but Senate Finance Committee Chairman Max Baucus, D-Mont., and Senate Finance Committee ranking member Charles Grassley, R-Iowa, said the House offer was unacceptable. ‘Chairman Baucus wants the agreement that Chairman Peterson sat in a room and made with him,’ a Baucus aide said, referring to a February meeting at which Senate Majority Leader Harry Reid, D-Nev., House Speaker Nancy Pelosi, D-Calif., Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, House Ways and Means Chairman Charles Rangel, D-N.Y., Peterson and Baucus had agreed to a $10 billion farm bill package and offsets.”

Yesterday’s DTN article also noted that, “Agriculture Deputy Secretary Chuck Conner told reporters Thursday that the White House would not support the House’s plan to use of increased government revenue from improved reporting of credit card sales. Baucus said he believes his offsets ‘will be more popular with the White House and the country.’”

Peter Shinn & Bob Meyer reported yesterday at Brownfield that, “The Senate counter-offer is for $10 dollars over budget baseline with a $4 billion permanent ag disaster aid fund and includes the controversial $2.5 billion in Senate tax breaks. That means it takes $12.5 billion in offsets to pay for it.

“A joint press release from Senate Ag Committee Chairman Tom Harkin of Iowa and Senate Finance Committee Chairman Max Baucus of Montana reminded House conferees that all had agreed to a $10 billion-over-budget-baseline approach to the new farm bill back in February. And Baucus addedthat ‘in farm country, a handshake is your word.’

“In a statement issued Friday evening, House Ag Committee Chairman Collin Peterson said, ‘The Senate’s Farm Bill counter-offer today affirms the House position on the core Farm Bill policies and shows how close we are to an agreement on those issues but also demonstrates that there is still work to do on financing the bill and other extraneous issues.’ Peterson specifically takes issue with, ‘$2.5 billion in tax giveaways that don’t even belong in the Farm Bill.’”

Keith Good