Congress likely will provide farmers up to $5 billion this year for supplemental payments to offset low commodity prices.
“That should be in the budget as a supplemental AMTA payment,” says Rep. Charlie Stenholm, a Texas Demo-crat and ranking member of the House Agriculture Committee.
Stenholm was in his district during the two-week Easter recess, taking care of his own cotton farm and speaking to constituents. He took time following an engagement at the Mineral Wells, Texas, Chamber of Commerce to discuss agricultural issues with Southwest Farm Press.
Stenholm says he'll have no role in a budget conference committee to reconcile differences between the House and Senate. But he's hopeful that negotiations will result in moving the Senate agricultural appropriations up closer to the House version.
“The House has provided virtually a blank check for agriculture, up to $500 billion for the next 10 years,” Stenholm says.
He says agriculture needs at least $100 billion over the next 10 years to take care of, among other things, conservation, environmental and commodity program issues. “We hope Congress comes close to that figure.”
He says a Blue Dog Democrat (a moniker for a strong coalition of moderate Democrats) budget proposal reflected what agriculture needed and “what farm groups wanted. But Congress adopted a different plan.”
He says a budget recently passed by the Senate provided only $9 billion per year for agriculture. The Blue Dogs and most farm organizations think $12 billion is a more realistic target. “We put out what we thought the industry needed but we lost, at least temporarily,” Stenholm says. “We hope in conference to get close to that $12 billion figure.”
He also expressed disappointment in President Bush's proposal to cut the agricultural budget by 5 percent. “I want to see the figures and examine proposals, but I'm concerned about cuts in agriculture and health,” he says.
The 22-year veteran congressman says he sees a lot of pessimism in the agricultural sector. Unfortunately, that sense of crisis does not extend throughout Congress. “The feeling of potential crisis exists only in about 20 districts across the country where agriculture is a key,” Stenholm says. “Even in my district, some constituents don't understand the plight of the rural economy.”
Stenholm says most farmers have not reached a crisis stage yet because government payments have kept them solvent. “If Congress takes those payments away, we will see a crisis,” he says. “That's why we must continue to explain to our (non-farm) constituents how important these payments are.”
Stenholm says a counter cyclical supplemental farm income proposal he has supported for more than a year still makes sense for agriculture. Under that proposal, government funds will kick in to offset low commodity prices. As prices decline, payments increase.
“We will see some kind of counter cyclical program in the next farm bill,” he says.
He adds that the system will mesh with international trade regulations.
Stenholm says most farmers prefer to earn their income from the marketplace rather than from government checks. “But, if they want to depend on trade, they have to change the way they market commodities,” he says. “We can't continue to sell the way we have for 50 years when trade has changed. Cooperative marketing will be crucial and farmers must find a general partner in corporate America to help with marketing and to keep more money in their own pockets.”
He said deteriorating relations with China, will affect trade. “China is playing with fire,” he says. “If the Chinese do not behave, trade will suffer.”
In remarks to the Chamber of Commerce, Stenholm said he favors tax cuts but “only as much as we can afford. I favor elimination of the marriage penalty and changes in the estate tax.”
Stenholm supports eliminating the death tax on estates up to $5 million. “It makes no sense to levy estate taxes that will put small businesses and farms out of business,” he said. “But if we repeal the estate tax, it will be perfectly OK for a corporation to build up a large estate and pass it along to heirs and never pay taxes. That system increases the chance of conglomerates, and continued concentration of industry will not serve the country well.”
He says four major companies currently run the meat packing industry. “I don't understand the logic behind that.”
Stenholm said the $1.6 trillion tax cut the Bush administration recommends is excessive in light of the proposed surplus and programs that cannot be cut.
“Social Security will take $2.5 trillion,” he says. “We're obligated for that. Another $400 billion goes to Medicare. That's already spent, so we have only $2.7 billion left.”
He says the Chinese problem underscores the necessity of building the military. “We currently enjoy a peaceful world, but to assure an adequate military to protect the United States we must spend $100 billion per year on top of what we had anticipated spending for equipment and technology.”
With those obligations, in addition to the potential of a lower than anticipated surplus resulting from a slowing economy, Stenholm says the tax cut is excessive.
“We also need increased spending for health care, prescription drugs, education, conservation, the environment and veterans programs,” he said. “We can lower taxes, but we have to do it in a manner that recognizes the needs of our communities.”
Stenholm also said the country needs a national energy policy. “We must conserve energy and support research to utilize energy more efficiently.”
He says nuclear power will be essential. “We have to develop safe ways to store nuclear waste.”
Any national energy policy, he says, “must be sensitive to the environment. We can drill in an environmentally safe manner. We also must explore renewable energy sources, such as ethanol.”