Among challenges facing Congress, says Rep. Cal Dooley, is weaving farm legislation into a financial safety net for American farmers while avoiding distorted market signals that can contribute to imbalances in supply and demand.

In Fresno recently for a hearing on the new farm bill, the Hanford, Calif., Democrat told the Rotary Club of Fresno, “Agriculture, without question, is in the toughest economy we have seen in a generation.” Meanwhile, the House Agriculture Committee, has been at work on a relief package.

Dooley, ranking minority member on the House Agriculture Subcommittee on Farm Commodities and Risk Management and himself a fourth generation cotton and dairy farmer, said he expected Congress to allocate some $5.5 billion in an emergency funding bill for direct payments to farmers across the U.S.

Recipients will include, he said, many California farmers who'd rather not accept the payments, but without them, widespread bankruptcies would occur across the nation.

With the increasing the amount of trade, both imports and exports, he said, “We need to beef up some of the functions of USDA that deal with animal and plant health and inspection services so we can preclude importation of diseases which can have serious financial impact to our industries.”

The current strength of the U.S. dollar is an impediment to trade. Dooley said the strong U.S. dollar enables Australia, for example, with its dollar at one-half the U.S. rate, to capture Asian markets from American farmers.

He said a key question for the new farm bill is whether some level of support should be predicated on the value of the U.S. dollar. Another question is whether currency valuations could be part of mitigation when sustained disparity levels in currencies occur and exports suffer accordingly.

As a farmer, he said he believes federal investment in research and development is one of the most important things the government can do. He said he has introduced a proposal to double such investment. “This is where farmers see some of the greatest long-term return on that investment of taxpayer dollars.”

Turning to water issues, the CalFed Bay-Delta Program in particular, Dooley said bipartisan legislation supported by the members of the California delegation could provide for increased water deliveries on both sides of the San Joaquin Valley.

“We need to do more to make sure we are partnering with the state of California to provide above-ground storage, as well as below-ground storage to deal with water quality and water yield issues.”

Less confident about the energy plight of California, Dooley said he is distressed at how politicized it has become. While others in Congress have called for energy price caps, he said he remains “reluctant to embrace that policy.”

“I don't know how you could practically implement such a policy without actually impeding the investment in new generating capacity and creating disorders in the marketplace.”

The federal government has control of only 47 percent of the power sold in the western region, he said, adding, “And it would be difficult to put a cost-plus on every generating facility in the region, you would have each generating facility under a different cost structure.”

Consequently, one source with multi-facilities might generate power at $100 per kilowatt at one of its plants and $200 per kilowatt at another. The tendency, he predicted, would be for the source to sell the most expensive power.

Dooley said steps by the Bush administration and the Federal Energy Regulatory Commission for oversight of peak-use pricing were appropriate and should have some benefit, but “should have happened six months ago.”

“The bottom line,” he concluded, “is there is no easy, simple solution to this, and it's time for us to set aside some of the partisan politics and really try to commit ourselves to moving forward in a fashion that can provide long-term and responsible relief to the energy problem facing California.”

e-mail: dan_bryant@intertec.com