Agribusiness: Congress considers key issues for farmers

Current agricultural issues are much the same as they were a year ago.

Probably the most publicized topic this year has been the drought in many parts of the country that is destroying crops and killing cattle. Conversely, other parts of the country are being troubled by too much moisture. Obviously, neither of these weather problems is beneficial to farmers and ranchers.

Commodity prices, however, are the No. 1 issue facing agricultural producers today. Poor prices are being experienced on a relatively broad front, but of particular interest locally are prices for cattle and small grains.

At this writing, for example, September corn and wheat on the Chicago Board of Trade were trading at $2.02 and $2.63 per bushel respectively. Corn has not traded at that level since 1987. Wheat was trading in that range back in 1989. The primary problem here, of course, is that the cost of production has continually escalated.

Fundamentally, prices have dropped due to an over-abundance of those products. August stock projections, considering the already depressed prices for wheat and corn, were not very good news. Reports indicate that ending corn stocks will grow 250 million bushel to 1,756 million bushel. Wheat was somewhat better, forecasting production down by 306 million bushel compared to 1998 with ending stocks down 36 million bushel.

Congress is currently considering legislative proposals to help U.S. producers through these tough times. Issues ranging from the aforementioned commodity prices to the environment could directly or indirectly affect the current agricultural economy.

The following excerpts from a report issued by Farmland Industries’ Government Relations office point out some of the current issues and activities occurring on the legislative front.

International trade

The future economic well-being of American agriculture is closely tied to its ability to be competitive in an expanding global marketplace. The importance of this replaced domestic subsidy programs with a focus on expanding international markets for agricultural products. By the year 2003, U.S. agricultural producers will depend on exports for an estimated 25 percent of their gross receipts.

For agriculture’s successful future, Congress needs to support policies that reflect a strong commitment to expanding international trade opportunities for U.S. agricultural producers. Such policies include:

” China NTR – The House of Representatives voted to continue normal trade relations (NTR) with China on July 27 with a vote of 260-170. Agriculture was a key issue for such strong support of China NTR. China is considered the most important growth market for U.S. agricultural exports in the 21st century. It is currently the United States’ sixth-largest trading partner, with industry projections indicating that the country will account for 37 percent of U.S. agricultural exports’ future growth.

Congressional delegation members U.S. Rep. Diana DeGette (D-Colo.) and U.S. Rep. Scott McInnis (R-Colo.) voted in support of U.S. agriculture on this issue. If China and the United States are able to negotiate a trade agreement, the chances are likely that the Congress will vote on permanent trade relations with China before it adjourns.

” Sanctions reform – A sanctions reform provision was included in the U.S. Senate Appropriations package, exempting food and medicine from future unilateral economic sanctions. It will require the president to seek congressional approval on proposed unilateral economic sanctions that include agricultural products. Existing sanctions affecting agriculture will end unless the president seeks congressional approval to extend them.

Agricultural economy

In order to address their constituents’ concerns throughout the country, members of Congress from farm states are pursing resolutions to aid the failing farm economy brought on by low commodity prices, drought and flooding conditions. Some measures that are gaining considerable ground include farm assistance and mandatory price reporting.

The Senate passed a $75.4 billion agriculture appropriations package, which included $7.4 billion in farm assistance. This amount includes $5.5 billion in supplemental Agricultural Market Transition Act payments; a $500 million payment to oilseed producers; $325 million in livestock assistance; $200 million for cotton; $150 million for specialty crops; and $270 million for peanut and tobacco producers.

The payment limitation was increased to $150,000 for one year. This cash assistance package is one of the largest since the mid 1980s.

The House Agriculture Committee passed the Agricultural Risk management Act of 1999, which will provide $6 billion to increase insurance-premium subsidies, expand the list of eligible crops and provide incentives for developing new policies.

Other important legislative proposals under consideration by Congress include the review of crop-protection products’ usage, water quality, transportation, taxes, energy and food safety.

Bob Mekelburg is general manager and CEO of Agland Inc.

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