Senate passes election-year increase in farm subsidies, sends bill to Bush

Wednesday, May 8th 2002, 12:00 am

By: News On 6

WASHINGTON (AP) _ The Senate gave final approval Wednesday to a farm bill that will shower billions of dollars in new subsidies on political battleground states and scrap the a 1996 law that was intended to make growers less dependent on the government.

President Bush has promised to sign the bill, which is expected to swell agriculture spending by nearly 80 percent over the cost of existing programs. The Democratic-controlled Senate approved the legislation, 64-35, over the objections of Republicans who said it was too expensive and a step backward in policy.

Bush complained that more subsidies would cause overproduction, worsening farmers' plight. But a veto would damage Republican efforts to unseat several Senate Democrats and protect GOP incumbents in several states that are key to which party will run Congress next year.

``About the time we think we're insignificant out here, something happens to make me think we're not,'' said Mike Alberts, a Marquette, Neb., farmer.

The bill guarantees more stable farm incomes by raising subsidies for grain and cotton growers, who have traditionally dominated federal farm programs, by reviving subsidies for wool and honey and by providing new payments for milk, peanuts, lentils and dry peas.

There is also an 80 percent increase in spending on land-conservation programs that will benefit livestock farms and fruit and vegetable growers who historically get little federal cash.

Support for the 1996 Freedom to Farm Act waned after commodity prices plummeted in 1998 and Congress responded with a series of annual bailouts of the farm economy.

The new bill, which essentially continues those bailouts, was originally expected to cost about $170 billion over the next 10 years, but weaker-than-expected commodity prices are now expected to cause crop subsidies to rise and push the bill's total price tag to $190 billion.

Senate Agriculture Committee Chairman Tom Harkin said the bill will give farmers ``stability and predictability.''

Senate Republicans derided the bill as a budget-busting return to Depression-era policies that were scrapped in the 1996 law.

``We're stepping backward for farmers in this country,'' said Sen. Sam Brownback, R-Kan., one of 28 Republicans who joined seven Democrats to vote against the bill.

Sen. Fred Thompson, R-Tenn., said the bill would ``make farmers increasingly dependent on government subsidies. These policies defy logic and they defy the most basic laws of economics.''

But farm-state senators who face tough re-election races this fall, including Arkansas Republican Tim Hutchison, embraced the legislation.

``You've got a lot of fairly close races in rural America where this farm bill is the most important thing that comes along every five, six, seven years,'' said Mary Kay Thatcher, a lobbyist for the American Farm Bureau Federation.

Sen. Tim Johnson, a South Dakota Democrat who is being challenged this fall by GOP Rep. John Thune, said the bill ``secures the income safety net for farmers'' and ``greatly increases our commitment to conservation.''

Economists say the bill is unlikely to cause commodity prices to rise because there are no controls on acreage, a feature of federal farm policy until 1996, and plenty of incentives to produce more. But defenders of the bill say they don't think it will encourage farmers to grow more crops than they already do.

``We're in all-out production out here right now. Where is this extra production going to come from,'' said Alberts, the Nebraska farmer. ``Are we going to start farming road ditches?''

The bill's increased subsidies have angered foreign competitors. The European Union said it may challenge the subsidies before the World Trade Organization.

Under WTO limits, certain U.S. farm subsidies cannot exceed $19.1 billion annually. However, the bill authorizes the Agriculture Department to adjust subsidies to stay within the cap.

The bill won't expire for six years, but there will be more battles over farm policy before then. Some senators have pledged to push new limits on the subsidies that individual farms can receive. The new milk subsidies only last three and a half years so there will be another debate then over assistance for dairy farmers.