HOUSE committee approves $5.5 billion for farm aid

WASHINGTON (AP) _ In a victory for the White House, a House committee agreed to limit a package of supplemental farm assistance to $5.5 billion, $1 billion less than the panel's Republican chairman

Wednesday, June 20th 2001, 12:00 am

By: News On 6

WASHINGTON (AP) _ In a victory for the White House, a House committee agreed to limit a package of supplemental farm assistance to $5.5 billion, $1 billion less than the panel's Republican chairman wanted.

Under an amendment that the House Agriculture Committee approved 24-23, grain and cotton farmers would receive $4.6 billion in direct payments this year. Another $900 million would be divided among growers of other crops, such as soybeans, peanuts and fruits and vegetables.

The committee approved the bill 31-14.

It was a defeat for the committee's chairman, Rep. Larry Combest, R-Texas, who argued that $5.5 billion was not enough to meet the needs of financially strapped farmers.

In a letter to the committee last week, White House budget director Mitch Daniels said he would recommend President Bush ``not sign a bill providing more than $5.5 billion in additional assistance'' for this year's crops.

Combest says the White House budget office is ``out of touch with the financial crisis farmers around the country are facing. Their recommendation is based on incomplete and unrealistic economic data.''

Mary Kay Thatcher, a lobbyist for the American Farm Bureau Federation, had expressed confidence before the vote that the amendment would fail.

``Things are worse in the country this year than last,'' she said.

Congress has provided $25 billion in special payments to farmers over the past three years to supplement federal subsidy programs, and farm groups have asked for as much as $10 billion more this year.

The first $5.5 billion in this year's bill would supplement the annual ``market transition'' payments that grain and cotton farmers receive under an existing program.

Growers of soybeans, sunflowers and other oilseeds would receive an additional $423 million.

Under the amendment approved Wednesday:

_$169 million for the government to promote sales of fruits and vegetables.

_$129 million for tobacco growers.

_$54 million for peanut producers.

Congress started passing the annual bailouts in 1998 after sluggish exports and bumper crops led to a collapse in prices for a wide array of commodities.

The Agriculture Department last month revised its estimate of net farm income for 2001 to $42.4 billion, up $1.1 billion from its January forecast, because of higher livestock prices. But farm groups say many producers can't survive financially without additional aid this year to supplement existing subsidy programs. Production expenses, which include the cost of fuel and fertilizer, are expected to rise $3.6 billion this year, or 1.8 percent.