LAWMAKERS start work on farm aid

WASHINGTON (AP) _ With prospects dimming for a rebound in crop prices, lawmakers will start work next week on a package of farm income assistance that's expected to top $5.5 billion. <br><br>It would

Friday, June 8th 2001, 12:00 am

By: News On 6

WASHINGTON (AP) _ With prospects dimming for a rebound in crop prices, lawmakers will start work next week on a package of farm income assistance that's expected to top $5.5 billion.

It would be the fourth straight multibillion-dollar bailout of the farm economy in as many years to supplement programs enacted by Congress in 1996. The House Agriculture Committee is scheduled to draft its version of this year's aid package next Thursday.

``After you've had three years of assistance it's gotten to the point that farmers expect that unless things get better that it's going to be there,'' said Mary Kay Thatcher, a lobbyist for the American Farm Bureau Federation, which is seeking $7 billion in aid.

This spring's congressional budget agreement set aside $5.5 billion for farm assistance that must be spent by Sept. 30, the end of the 2001 budget year. But there is another $7.4 billion earmarked in the budget plan for 2002 farm programs that lawmakers are likely to dip into, aides say.

The bulk of the $5.5 billion is expected to go to grain and cotton farmers to supplement the annual ``market transition'' payments they receive under the 1996 farm law, but committee aides also are working on proposals to help growers of soybeans, sugar, apples and other commodities.

Dairy producers also could benefit, with the possible extension of federal price supports that are scheduled to end this year.

Sugar growers would not have to pay a one-cent-per-pound penalty on sugar that they forfeit to the government under their price-support program. Opponents of the sugar program say the plan would stimulate sugar production and encourage farmers to dump the excess on the government.

The House committee wants Congress to complete work on the aid package by the August recess to guarantee that the Agriculture Department has time to distribute the $5.5 billion before Sept. 30, said Keith Williams, the panel's spokesman.

However, that depends on how quickly the Senate acts on its version, and the Senate Agriculture Committee doesn't have any plans yet. Sen. Tom Harkin, D-Iowa, became chairman of the panel only this week when Democrats took control of the Senate.

Harkin ``is committed to getting the bill out of committee, so it can be in the hands of farmers by Sept. 30,'' said spokesman Seth Boffeli.

Farm production expenses, which include the cost of fuel and fertilizer, are expected to rise $3.6 billion this year, or 1.8 percent, according to USDA. Fertilizer costs are up 17 percent because of higher prices for natural gas, a key component of fertilizer. Fuel expenses are up 7 percent.

At the same time, income from wheat, rice, soybeans, cotton, fruits and vegetables are likely to be flat or down.