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Published February 23, 2010, 08:40 AM

Preparing for farm program rewrites

SAN DIEGO — House Agriculture Committee Chairman Collin Peterson, D-Minn., said Feb. 13 he thinks the next Congress may have to take up a reconciliation bill that could include a rewrite of the farm program. Congress passes reconciliation bills when it decides to try to balance the federal budget or at least reduce the deficit.

By: Jerry Hagstrom, Special to Agweek

SAN DIEGO — House Agriculture Committee Chairman Collin Peterson, D-Minn., said Feb. 13 he thinks the next Congress may have to take up a reconciliation bill that could include a rewrite of the farm program.

Congress passes reconciliation bills when it decides to try to balance the federal budget or at least reduce the deficit.

Speaking by telephone to the American Association of Crop Insurers convention in San Diego, Peterson said he is not an advocate of a reconciliation bill, but thinks international concerns about U.S. finances and difficulties in selling U.S. bonds overseas may force the next Congress to consider a reconciliation bill.

“This budget is completely out of control,” Peterson said. “I’m not advocating reconciliation. We have a very good possibility after this election, no matter who wins, to force the mother of all reconciliation.”

Noting that the 1995 to ’96 reconciliation bill included the farm bill, Peterson said a 2011 reconciliation bill might include it even though the 2008 farm bill runs until Sept. 30, 2012.

“If that happens, I want to be ready,” Peterson said.

Getting prepared

Peterson said that if Congress takes up reconciliation “everything would be on the table in that kind of environment,” including Social Security, Medicare, Medicaid, defense spending, homeland security, farm programs and nutrition programs.

Peterson said one reason he wants to hold farm bill hearings this year is to be ready if he needs to put a farm bill in a reconciliation bill Peterson said heplans to hold three hearings in Washington in late March and early April and field hearings in July. He said he wants to avoid holding hearings between August and the November elections because he wants the hearings to be bipartisan.

“Being bipartisan takes a lot of time. Bipartisanship is hard to come by,” Peterson said.

If a reconciliation bill does not affect the process, Peterson said he plans to proceed with writing the bill early in 2011, mark it up in the fall of 2011 and finish it before the current bill expires.

Opposition to cuts

Peterson said he is opposed to the Obama administration’s plans to cut $8 billion from crop insurance expenditures in the next 10 years, in part because he wants to preserve as high a baseline for agriculture as possible for the next farm bill or reconciliation negotiations.

“I will fight tooth and nail against them taking any money out of the baseline,” Peterson says.

He and threatened to take up the matter in Congress if administration officials do not “back off,” but he added, “It’s hard to get any damn thing done around Congress any more.”

Although the 2008 farm bill authorized the Agriculture Department’s Risk Management Agency to renegotiate the standard reinsurance agreement that sets the rules for crop insurance company delivery of policies, Peterson said he intended to give the administration authority to make changes so that crop insurance would be improved in parts of the country where there is dissatisfaction with policies, not to make the large-scale cuts that the administration has proposed.

“Crop insurance may be the only farm safety net in five or ten years and we’ve got to make sure it works,” Peterson said.

The Obama administration has said the proposed cuts are justified because crop insurance underwriting gains or profits and payments for administrative and operating expenses are too high.

Peterson said he is starting early on the next farm bill in part to motivate farm groups to decide what they want in the bill and to get control of the agenda, which in the last farm bill was dominated by reformers who wanted to cut programs.

“We fought on their ground,” Peterson said. “Their idea of formulas has nothing to do with reality.”

Peterson said he thinks that a program different from the direct payments that farmers get whether prices are high or low may provide a better safety net. He also criticized the ad hoc disaster bill proposed by Senate Agriculture Committee Chairman Blanche Lincoln, D-Ark., and Sen. Thad Cochran, R-Miss., as part of the jobs bill, saying their plan to provide additional direct payments to farmers who had experienced only a five percent loss would garner criticism.

“This kind of stuff is not going to be helpful in defending this going forward,” he said.

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