Farm-state senators have written Senate Budget Committee Chairman Pete Domenici requesting that he include a provision for emergency economic loss assistance for farmers in the FY 2002 budget resolution.
The letter, which was drafted by Mississippi Sen. Thad Cochran and signed by 20 other senators, asked that the assistance be provided through 2002 or until a replacement for the 1996 farm bill can be enacted.
“Since conditions are not appreciably improved for 2001, we support making market loss assistance available so that the total amount of assistance available through the 2001 AMTA payment and Market Loss Assistance payments will be the same as was available for the 2000 crop,” it said.
“We understand it is unusual to ask that funds to be made available in the current fiscal year be provided in a budget resolution covering the next fiscal year, but the financial stress in U.S. agriculture is extraordinary.”
The senators noted that USDA projects 2001 cash farm income to be the lowest since 1994. Farmers also face rapidly increasing fuel and fertilizer costs while prices are expected to show only modest improvement from last year's 15 to 25-year lows.
In the last three years, the Commodity Credit Corp. has provided $72 billion in economic and weather-related loss assistance and conservation payments. Expenditures for 2001 are projected to total $14 billion to $17 billion without additional market or weather loss assistance.
“With these projections, we believe it is vitally important to provide at least as much total economic assistance for 2001 and 2002 as was provided for the 2000 crop,” the letter said.
The House Budget Committee approved a resolution that says farmers can share in a $500 billion strategic reserve. The resolution puts farmers on a level with national defense for access to the reserve, part of the Budget Committee's spending blueprint for the 2002 Fiscal Year.
“Farmers are officially recognized in this budget committee with a place at the head of the table in policy and budget decisions, and funding reserved on a par with our national defense,” House Agriculture Committee Chairman Larry Combest, who lobbied the Budget Committee hard for increased spending authority for agriculture.
Democrats on the House Ag Committee criticized the proposal, however, arguing that it shortchanges agriculture by failing to earmark funds for specific needs such as increased Agricultural Market Transition Act payments or marketing loan gains.
Some said agriculture could be left holding an empty bag if the strategic reserve is wiped out by a downturn in the economy or the President's proposed tax cut reduces the amount of money available for the reserve.
“Look at the risk that is going to be involved for agriculture,” said Rep. Charles Stenholm, D-Texas, the ranking minority member on the House Agriculture Committee. “This is a disaster for farmers.”
Although Combest tried to put a good face on the House Budget Committee resolution, he earlier sent the committee a letter, saying that “Rather than yearly assistance packages that might or might not come in the fall, farmers need a program they can bank on at this time of year. That money needs to be added to the agricultural baseline.”