A dispute between farm-state lawmakers and President Bush appears to be brewing. The basis of the argument stems from the size of a bailout package for financially stressed farmers.

The White House wants Congress to adhere to the $5.5 billion limit set for fiscal 2001 in a congressional budget agreement. However, the House Agriculture Committee is debating a $6.5 billion farm bailout bill that dips into money earmarked for fiscal 2002. The bulk of this year’s assistance, $5.46 billion would go to grain and cotton farmers to supplement the annual market transition payments received under an already existing program. The remainder is tentatively earmarked for commodities, like soybeans and fruit.

In a letter to the committee, White House Budget Director Mitch Daniels said he would recommend that President Bush “not sign a bill providing more than $5.5 billion in additional assistance for this year’s crops.” Daniels believes rising prices for some commodities have improved prospects for many in agriculture, and that spending more money now will reduce the funds available which lawmakers will need to revise permanent farm programs.

Many farm groups reacted by saying that due to the increase in production expenses such as fuel and fertilizer that producers can not survive this year without another large bailout. Fuel and fertilizer costs have increased production expenses by about 1.8 percent — an increase of $3.6 billion.

Since 1998, Congress has enacted nearly $25 billion in farm aid payments mainly due to the collapse of grain markets. The $6.5 billion currently proposed is substantially less than the $9.7 billion in fiscal 2000 or the $8.7 billion in fiscal 1999.

Alternate plans will be considered as the committee continues its debate this week.

Reuters, www.meatingplace.com