Milling & Baking News - May 20, 2008 - 38

Ingredient Market Trends
Weekly Spotlight

Congress passes farm bill
by veto-proof majorities

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39 /bakingbusiness.com
July 3, 2007
Milling
& Baking News
/ world-grain.com

he U.S. House of Representatives
and the Senate last week approved
by wide, veto-proof majorities the
Food, Conservation and Energy Act of
2008, the farm bill that will set the nation's course in food and agriculture
policy for the next five years. President
George W. Bush was abroad at the time
of the votes but warned before his departure for the Middle East he would veto
the legislation if it reached his desk. But
with 81 senators voting in favor of the
act (67 would be required to overturn a
veto) and 318 members of the House
approving the conference report with
only 106 opposed, it
appeared certain the
bill will become law.
Its implementation
would seem to put
off for at least another
five years any chance
of significant farm
program reform.
The basic structures
of existing farm programs were retained.
Producers will continue to receive direct
payments originally authorized under
the 1996 farm bill. The original intent of
these "agricultural market transition"
payments was to wean producers from
government subsidies, but they were
continued under the 2002 farm act and
now under the 2008 act. It should be noted the Bush administration also favored
retention of direct payments as a way to
provide income support to farmers without running afoul of prospective new
restrictions on domestic farm supports
under the World Trade Organization.
Commodity price support programs
based on marketing loans, loan deficiency payments, target prices and countercyclical payments were continued, with
loan rates raised for wheat, barley, oats
and "other oilseeds," and target prices
raised for wheat, sorghum, barley, oats,
soybeans and "other oilseeds." Additionally, marketing loan rates and target prices were set for dry peas, lentils,
small chickpeas and large chickpeas,

crops that heretofore received no such
support. Congress did provide a new
option to the traditional commodity
price support program in the form of a
crop revenue protection system.
Congress tightened the adjusted
gross income test determining producer
eligibility to receive farm program benefits. To receive government payments,
an individual's non-farm income may
not exceed $500,000 a year. Additionally, if farm income exceeds $750,000 a
year, an individual will be ineligible to

receive government payments. The administration initially sought a hard cap
of $200,000 a year, with individuals receiving more than that amount from
any source rendered ineligible to receive
payments in that year.
Secretary of Agriculture Ed Schafer
lambasted Congress, stating, "Eight
months behind schedule, Congress will
send a bill to the president that is trade
distorting and fails to provide meaningful reform to the adjusted gross income
limit, beneficial interest or international
food aid program ... Reckless spending
like this is not what farm bills should
be about. Congress had a real chance to
implement reform and strengthen farm
programs for the next decade. This reform could have allowed for savings
to be reinvested in future agriculture
needs, such as energy and research. Instead, they decided to spend billions
upon billions of taxpayer dollars to
grow government and invest in the tired
status quo." MBN
/ world-grain.com
Milling & bakingbusiness.com
Baking News
May
20, 2008 / 39

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Milling & Baking News - May 20, 2008

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