Peterson favors payment limits

WASHINGTON--House Agriculture Committee Chairman Collin Peterson, D-Minn., said June 8 that he plans to impose stricter payment limitations on farm program conservation payments as well as crop subsidies in the 2007 farm bill.

In his weekly telephone news conference with reporters, Peterson noted that he is not a fan of payment limitations in general, but said that the House Agriculture Committee must include a payment limit plan in the bill it will mark up the last week of June or face noncommittee members offering an even stricter plan on the House floor. Peterson also announced that the full committee markup will be June 26 to 28 and that the House leadership has agreed to bring up the bill the week of July 16.

Peterson said he had not decided whether to maintain the current system of different payment limits for the commodity subsidies and the conservation programs or to combine them into one total for each farm operation and impose an overall limit. He did not say what level of payment limits he would propose. Senate Agriculture Chairman Tom Harkin has said he thinks the Senate will favor a cap of $275,000 on crop subsidies per farm operation.

Peterson said he had not decided whether to maintain the current system of different payment limits for the commodity subsidies and the conservation programs or to combine them into one total for each farm operation and impose an overall limit. He did not say what level of payment limits he would propose. Senate Agriculture Chairman Tom Harkin has said he thinks the Senate will favor a cap of $275,000 on crop subsidies per farm operation.

Stricter limits

Peterson also said at a House Agriculture Horticulture and Organic Agriculture Subcommittee markup session June 7, “Some who want payment limits don't want any on conservation. I think that's hypocritical.”

Peterson made that statement after Rep. Randy Kuhl, R-N.Y., introduced an amendment to increase the payment limit for the Tree Assistance Program from $75,000 per year to $150,000 per year. The program pays farmers for part of the cost of replacing fruit trees after storms. The subcommittee adopted the amendment even though Peterson warned the subcommittee that stricter payment limits are likely to be included at the full committee bill.

Peterson told Kuhl he might help him keep the higher payment limit in the bill “if you can convince some of your colleagues in the Northeast to get off their ideological high horse on this.”

Controversial subject

The issue of payment limits on conservation programs is controversial among environmental groups. Some environmental groups have argued that there should be no limits on conservation programs such as the Environmental Quality Incentives Program, which is used to clean up livestock operations, because the point of the program is to deal with the environmental problem no matter how small or large the operation. But advocates for smaller farmers maintain that big conservation payments to big farmers amount to payments for environmental cleanup that the big operations should afford on their own. They also argue that the big conservation payments encourage concentration in agriculture and, for example, the growth of smelly hog farms with thousands of animals.

Ferd Hoefner of the Sustainable Agriculture Coalition, who has vigorously advocated limits on commodity payments, said that he would support limits on conservation payments.

But Dennis Cardoza, D-Calif., chairman of the Horticulture and Organic Agriculture Subcommittee, told reporters that he would not favor a cap on conservation programs and has not made up his mind about a payment limit on crop subsidies. Cardoza said he does not think caps on conservation programs work in states such as California and New York where the cost of production is high.

At his news conference, Peterson also said he intends to cut the direct payment program for farmers to pay for a permanent weather-related disaster program. He added that CBO is having difficulty scoring the “revolutionary” and “innovative” ideas in his proposal.

Subsidy cuts

Peterson also said he is considering proposing cutting all farm subsidies for farms of 10 acres or loss. Most of those farmers, he said, are either hobby farmers or builders of large houses who don't need the money. Cutting them off would save $240 million over 10 years, he said. He said he also hopes to save some money from the crop insurance program as part of adding the disaster program.

Peterson said commodity groups are putting pressure on him to use part of the $20 billion reserve fund for farm bill spending above the baseline that is included in the fiscal year 2008 congressional budget resolution for commodity programs, but that “I am withstanding it so far.” He added, “The goal is to make everybody equally unhappy. Nobody is going to get exactly what they want.” But he said he is much closer to his goal of following the pay-go rules and yet getting money for conservation, the fruit and vegetable industry and food stamps than he expected.

Officials of both the farm credit system and the banks are so “angered” by the bill's provisions to expand the type of lending the farm credit system can undertake that the proposal is “some place close to where we need to be.” But he noted that House Financial Services Chairman Barney Frank had asked the parliamentarian to move farm credit to his committee. Peterson said the parliamentarian refused, but that he has warned farm credit lobbyists that they should be careful about their demands or face reassignment of their jurisdiction.

Peterson also acknowledged that he is under pressure to expand benefits under the Milk Income Loss Contract program, but said milk producers are lucky the program got extended under the Iraq war supplemental appropriations bill. The price of milk soon may be so high, he said, that dairy producers will have to work hard to defend themselves.