Negotiators reach tentative farm bill deal

[April 26, 2008]    WASHINGTON (AP) -- Congressional negotiators reached a tentative agreement Friday on a multibillion-dollar farm bill that includes a hefty increase for nutrition programs at a time of rising food prices.

An intense series of closed-door bargaining sessions over how to pay for the five-year, roughly $280 billion bill ended Friday afternoon with senior Democrats expressing optimism that they would soon be sending the measure to President Bush.

"I don't think there's any question now that we can get this done by the eighth of May," said Rep. Collin C. Peterson, the Minnesota Democrat who heads the Agriculture Committee.

A key breakthrough came when senior lawmakers, after an hours-long huddle in an ornate room in the Capitol, agreed on a $1.7 billion package of tax breaks to be included in the bill, and on how to finance the overall package.

The outline includes an $861 million increase for nutrition programs over 10 years, partially paid for by slashing crop subsidies by $400 million and cutting a program to pay farmers for ruined crops by $250 million. Even though the legislation covers five years, congressional budget analysts estimate programs over a decade.

Sen. Kent Conrad, D-N.D., said the shift was "urgently needed because of the run-up in food costs and food prices."

It also reflected the political and economic realities surrounding this year's tough farm bill talks. With crop prices high and the federal budget squeezed, there's less appetite in Washington for big farm programs, especially among congressional leaders who hail from urban areas. The sharp economic slump has many lawmakers focused more on job losses and home foreclosures than farm policy.

House Speaker Nancy Pelosi, D-Calif., and Rep. Charles B. Rangel, D-N.Y., the Ways and Means Committee chairman, pushed hard for the nutrition boosts.

"A lot of painful reductions (had) to be made in order to shift resources to places that are being hard hit by this weakening economy," Conrad said.

With the increases, Sen. Tom Harkin, D-Iowa, the Agriculture Committee chairman, said two-thirds of farm bill resources would go to nutrition.

"We carried a heavy load for nutrition," Harkin said. "It's not just a farm bill. This is a farm and a food and an energy bill."

To close stubborn funding gaps, negotiators agreed to cut an ethanol tax credit that has previously been seen as untouchable because of its popularity in politically potent Iowa. They sliced $1 billion in support for blending fuel with the corn-based additive, bringing the per-gallon credit from 51 cents to 45 cents.

They boosted support for another form of the clean-burning fuel additive - cellulosic ethanol, which is made from plant matter - by $400 million.

The measure increases funding for conservation programs, including a first-ever infusion of federal farm dollars - $372 million - to clean up the Chesapeake Bay.

"This is a very good day for Chesapeake Bay cleanup efforts," Rep. Chris Van Hollen, D-Md., said.

The marathon round of negotiations was punctuated by several near-collapses and flare-ups between senior Democrats and Republicans struggling to reach a deal amid intense pressure from farm groups jealously guarding their subsidies.

"We took a little bit out of here and there and made it work but it's tough - nobody wants to give anything up," Peterson said.

The tentative deal includes a $3.8 billion disaster package, trimmed from the $4 billion farm-state lawmakers had initially sought.

"It's just a trim ... just a nick, we feel," said Sen. Max Baucus, D-Mont., "The program is there, and that's the important thing."

The tax package includes several elements sought by powerful lawmakers, including a tax break for race horse owners important to Sen. Mitch McConnell, R-Ky., the minority leader, and one that benefits timber companies championed by Baucus. Also included were trade preferences for Caribbean countries, a priority for Rangel, whose district has a high concentration of people of Caribbean descent.

Negotiators were still working to finalize provisions limiting farm subsidies for the wealthy. Under the tentative deal, the government would eventually limit payments to high-earning "nonfarmers," people who make only a small portion of their income from farming. But it wouldn't impose any income limits on wealthy farmers, Peterson said.

The Bush administration has called for much tougher limits that would apply to anyone who earned more than an average of $200,000 annually.

Advocates of more sweeping farm policy changes said the measure still wouldn't go far enough to scale back subsidies. Rev. David Beckmann of the nutrition group Bread for the World characterized the deal as a "half victory ... more help for hungry people, but no significant reform yet in the subsidy programs."

A final agreement on the massive measure will likely come next week, after staff aides spend the weekend hashing out key details. Senior Republicans and Democrats still must vet the deal with rank-and-file lawmakers.

They are racing to complete the measure before the current farm law runs out. Hours before the deal, Bush signed a one-week extension that expires May 2.

[Associated Press; By JULIE HIRSCHFELD DAVIS]

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