At least 17 senators signed letters to Senate Agriculture Committee Chairman Tom Harkin and ranking member Richard Lugar urging them to support the payment limit language in the House version and ignore the Grassley-Dorgan amendment in the Senate farm bill.
The conference committee held its first official session March 13, but made little progress in resolving the 89 areas of significant disagreement in the commodity titles of the two bills.
“In an era when family farmers of all crops are finding it increasingly difficult to make a living, it is inconceivable to us that the new farm bill would include a provision that makes it more difficult for farmers to achieve the competitiveness they need to survive,” said Arkansas’ Blanche Lincoln in a letter signed by 15 senators.
“As you near conference negotiations on the new farm bill, we urge you to eliminate the Grassley-Dorgan payment limitations amendment.”
Lincoln, who led the opposition to Grassley-Dorgan on the Senate floor, said the amendment’s stricter payment limits would discriminate against producers of capital-intensive crops, such as rice, cotton and peanuts.
“Since the Grassley-Dorgan amendment would apply an arbitrary, uniform limit across all program crops, it would hit growers of these crops first and would hit them hardest,” the senator said. “Federal farm policy should seek to treat all regions fairly.”
Placing limits on marketing loan benefits, as the Senate farm bill does, amounts to “kicking farmers when they are down,” she said. “The lower the market price, the more costly the loan deficiency payment. Generic commodity certificates resolve this problem by extending loan support to a farmer’s entire crop.
“Yet, the Grassley-Dorgan amendment would cripple the marketing loan program that has been the cornerstone of farm policy for two decades by rendering generic commodity certificates useless and undermining the safety net for all crops.”
The Arkansas senator said lower payment limits would force many southern farmers to shift from intensive-input crops, such as rice, cotton or peanuts, to low-input crops, such as corn, wheat and soybeans, creating a surplus of the latter when prices for corn, at least, are beginning to look more promising.
“For the other program crops, this would mean their loan deficiency payments are that much more costly, so that corn and wheat farmers would hit their marketing loan limitations that much sooner,” she noted.
The two California senators, both of whom voted for the Grassley-Dorgan amendment when it was before the Senate, also sent letters to Harkin and Lugar asking them to put most of the Grassley-Dorgan amendment aside.
“During the Senate debate on the farm bill, we joined both of you in a bipartisan effort to limit the amount of payments farmers can receive from the federal government,” said Sens. Diane Feinstein and Barbara Boxer. “We voted to limit payments because we believe millionaires who do not live on a farm and do not work the land should not receive government assistance.
“We hope the Senate’s overwhelming support for payment limitations will prevent millionaires from receiving federal farm assistance, but we are concerned about the impact payment limitations will have on family farmers in California and respectfully request that you recede to the House provisions where the Senate language hurts California.”
The California senators said payment limits disproportionately affect family farmers of highly capital-intensive crops, particularly rice and cotton, which are the two most expensive program crops to grow.
“We are also concerned about the Senate language restricting the use of commodity certificates to provide a safety net for our farmers,” they said. “When California family farmers bump up against their limitations, the loan program turns into a recourse loan, eliminating a farmer’s safety net.
“We should not deny essential financial assistance to commercial-sized farming operations in California when prices are extraordinarily low, while farmers in other regions of the country receive assistance on every bushel.”
California’s farming operations are large, by some standards, because they must achieve economies of scale, they noted. “Our costs of production per acre are significantly higher than many parts of the country because of our high land values and input costs. It would be discriminatory for Congress to penalize some family farmers based on a one-size-fits-all limitation on eligibility for benefits based on an arbitrarily selected acreage or faulty perception of what constitutes a ‘family’ farm.”
The senators cited a cotton farmer from California’s Central Valley, who has a $10 million annual budget to farm 12,000 acres, yet only draws a salary of $50,000. His sons and son-in-law are partners and work on the farm, and his daughters run the office.
“He has farmed for over 50 years in California, but payment limitations in the Senate farm bill will force him to cut the amount of acres he grows of cotton by two-thirds and put his farm at risk,” they said. “The bottom line is that large cotton and rice farms in California are family farms which should continue to receive payments, and not be discriminated against because of their size. These are not millionaires, but hard working family farmers.”
In other developments, 22 members of California’s congressional delegation signed a letter spearheaded by Rep. Bill Thomas, chairman of the House Ways and Means Committee, urging conferees to reject payment limit provisions which would unfairly target commercial-size farming operations in California.
The letter said the Grassley-Dorgan amendment would deny critical assistance when prices are low, disrupt crop-marketing options, encourage over-production of specialty crops and disrupt longstanding tenant-landlord arrangements.
Five members of Arizona’s congressional delegation have signed a similar letter, and members of Louisiana and North Carolina delegations also were circulating letters expressing opposition to the Grassley-Dorgan amendment.
Despite the lack of progress at the first meeting, Rep. Larry Combest, the chairman of the conference committee, said he was still hopeful of being able to complete work on the farm bill prior to Congress’ Easter recess, which begins March 22.