Senior Senate and House of Representatives negotiators agreed on the outline of a six-year farm bill Thursday to increase crop subsidy spending by $4.8 billion a year and create $2 billion in "green" payments for land and water stewardship.

The election-year agreement, reached one day after President Bush called on Congress to send him the often-delayed bill, would limit farmers to no more than $360,000 a year in subsidies, $100,000 less than the current limit.

It also would set the stage, in two years, for mandatory country-of-origin labels on meats, fish and produce. A Senate proposal to ban meatpackers from raising hogs and cattle apparently was dropped.

Leaders of the Senate and House Agriculture committees refused to discuss details of the bill, pending a meeting on Friday to see if their package fit within spending limits. Nonetheless, they said they expected their framework to stand.

Congress agreed a year ago to a 78 percent increase in agricultural spending, or $73.5 billion over 10 years. Informal calculations put a six-year bill at $44.5 billion or so. Early in their work, negotiators allotted an average of $4.8 billion a year for increased crop supports and $1.7 billion a year for conservation, an 80 percent increase.

Congressional leaders say the farm bill would remedy the widely agreed failing of "Freedom to Farm" – scanty shelter from persistently low grain prices that abruptly ended a mid-1990s boom. It would revive the target-price system, last used in 1995, to release additional payments to grain, cotton and soybean growers during hard times.

The bill also calls for the first increase in support prices for major crops in several years. Lawmakers agreed to a step-down mechanism for support prices. They would be fixed at comparatively high rates for the first two years of the bill and then reduced to a lower level. That approach would assure farmers got some of the increased spending soon, while making room in the budget for the target price payments, which would begin to flow six months after harvest.

Price supports can be tapped at harvest time. For corn, the support, now $1.89 a bushel, reportedly would rise to be $1.98 and then drop to $1.95. Growers also would be allowed to update their planting and yield data, which have been frozen for as long as two decades. Up-to-date data would mean larger payments to farmers. Besides crop support rates, the major disagreement between House and Senate negotiators was on conservation. The House wanted a five-fold increase, to about $1 billion a year, for the Environmental Quality Incentives Program, which shares the cost of controlling manure and farmland run-off.

Senate Agricultural Committee Chairman Tom Harkin (D-Iowa) achieved one of his top priorities with agreement to establish the Conservation Security Program, which would reward land, water and wildlife stewardship on the more than 900 million acres of working farm and ranchland. Until now, the focus has been paying farmers to idle fragile land. Negotiators capped CSP spending at $2 billion, far below the $3.9 billion the Senate proposed.

In addition, Harkin says negotiators decided on a ceiling of $360,000 – a figure proposed by the House – for farm support payments. Growers still would be able to use so-called generic certificates to circumvent the limit. The Senate wanted a rigid $275,000 limit.

On other salient points, negotiators:

  • Disagreed on how much a producer could get in cost-share aid in the EQIP program. Midwestern senators wanted to keep corporate farms out of the program.
  • Headed toward bonus payments to dairy farmers of $1.3 billion over three and a half years. Aid would be paid on output up to the equivalent of 138 cows if prices fell below the equivalent of $16.95 per 100 pounds of milk in Boston.
  • Appeared at odds over the size of supports to peanut growers, whose quota program would be converted to price supports like corn and wheat.

Reuters