2nd Update on Farm Bill

White House threatens veto for US farm bill
Reuters Thursday, 26 July 2007
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The White House has threatened to veto a broad agriculture law being drafted in the United States Congress, which the administration said misses a major chance to overhaul US farm policy in dire need of reform.
The Bush administration has argued that the House Agriculture Committee's plan for the 2007 farm bill – which will set subsidy, biofuels, rural development, conservation and nutrition spending for five years – increases taxes unnecessarily and uses accounting tricks to pay for programmes.
"Myself, and the president's entire team of senior advisors, will recommend that he veto the bill if it is adopted in its current form," Agriculture Secretary Mike Johanns told reporters. "There are serious problems with the way this (House) bill was put together."
The farm bill package, passed last week under the leadership of committee chairman representative Collin Peterson, would deny subsidies to people with an adjusted gross income above $1 million, which Johanns said would only be about 3,000 people. It also would require payments to be tracked to an individual.
The Bush administration has expressed concern that the bill falls short on priorities such as renewable energy and rural development. It also said the bill does not sufficiently limit eligibility for government farm supports.
For its part, USDA has proposed denying commodity subsidies to people with adjusted gross income of $US200,000 ($NZ252,238) a year, affecting an estimated 38,000 of the wealthiest US farmers.
The House was scheduled to begin debating the bill - which replaces 2002 legislation expiring in September - on Friday. The Senate has not yet begun work on its version.
But Peterson, a Minnesota Democrat, said the veto threat was "not the first time that the Bush Administration has turned its back on American agriculture."
He said the bill "represents a carefully crafted compromise that includes substantial reforms and new investments in programmes that matter, including fruit and vegetable production, nutrition programmes, conservation and renewable energy."
A proposal from Democratic representative Lloyd Doggett would help pay for nutrition and food stamps by taxing US plants of companies owned by firms located overseas. Republicans charge the increase would endanger tax treaties and raise the cost of doing business in the United States.
Critics also believe that, without deep reform, the United States may see more challenges at the World Trade Organisation court. US farm subsidies already face two broad challenges from trading partners who believe they violate trade rules.
Representative Ron Kind, a Wisconsin Democrat, and other lawmakers have proposed an alternate plan that would trim grain, cotton and soybean outlays by $US12 billion through 2012. The savings would be shifted to other programmes such as food stamps, land stewardship and aid to fruit and vegetable farmers. It also would use a cap for adjusted gross income of $US250,000.
Johanns said Kind's amendment marked a real go at reform. "I believe that because of that they are going to pick up some support on the House floor," Johanns said.