Woeful Farm Bill and Record Year Highlight Remarks by Secretary Conner

When Congress returns to session later this month, one of the pieces of business
to finish is the reconciling of the House and Senate versions of the 2007 Farm
Bill. Unfortunately, with the two versions suffering from some very fundamental
differences, the outlook for a successful conference seems farfetched.

"With all that has gone into this process, it would be great to stand up here
and be able to tell you that we were just a few short steps away from wrapping
up a final package that we can deliver to the President for his signature,"
Acting Secretary of Agriculture Chuck Conner told the South Dakota Corn Growers
Association. "Unfortunately, ladies and gentlemen, that is not where we are
right now."

Both House and Senate versions of the bill propose tax increases to fund
programs, something that doesn’t sit well with the Department of Agriculture and
hasn’t been done since 1933. Conner called the Senate version of the bill "full
of gimmicks" and "illusionary savings," saying that he did not believe other
sectors of the economy should be asked to pay additional taxes to support farm
programs. He also stated he was concerned about the "trade-distorting effects of
increasing target prices and loan rates" that the two versions contain and that
there is no inclusion of a meaningful income cap on farm program participation
or reform of the way that beneficial interest is applied in marketing loan
transactions. To make his point clear, he showed the audience a map of New York
City where a lot of farm program payments are handed out, saying "this has to

Conner and other senior agriculture officials will recommend that President
Bush veto any Farm Bill that does not rectify any of the mentioned points of

"Every farm bill is tough; every farm bill looks bleak until the last
minute," said Conner. "This one looks bleak from my vantage point; I will tell
you that. But I know that on the other side of that is an opportunity for us to
sit down and work together as we have done so many times in the past, come up
with the right plan, a reform-minded plan, one that’s fair to the taxpayers, one
that talks about the true costs of the bill."

Though the Farm Bill is a flop, there was good news.

For U.S. farmers, 2007 was an outstanding year, economically speaking. Corn
prices hit an 11-year high. Soybeans hit a 34-year high while wheat prices have
been at all-time records. U.S. agricultural exports topped $82 billion with
expectations that trade in 2008 will reach $91 billion, and the Department of
Agriculture is estimating that net cash farm income will be at $85.7 billion, up
$18 billion, by next July. It is also no secret that the 2007 Energy Bill signed
by President Bush on December 19 will be a boon for farmers as it is asks for
extraordinary increases in the Renewable Fuels Standard (RFS) over the next
several years.

"I remember the days not too long ago when we gauged our year in agriculture
by whether or not we broke $50 billion of net cash farm income," said Conner.
"We have not only broken that, we are way beyond anything historically ever used
as a benchmark of measurement."

Matthew Carr, NACM staff writer

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