WASHINGTON (DTN) -- Key leaders on the Senate and House Agriculture Committees are questioning the logic of allowing USDA to create a new program to provide trade-offsetting payments to farmers at the same time Congress is working to approve a new farm bill.
President Donald Trump on Monday said his administration would take care of farmers. Last week, Trump ordered Agriculture Secretary Sonny Perdue to look at all options as the trade dispute with China continues. Congress boosted Perdue's ability last month by getting rid of restrictions on the agriculture secretary's emergency authorities.
Congress started restricting the agriculture secretary's emergency program powers in 2011 but removed the restriction in the omnibus spending bill passed into law last month. Removing the restriction opens up as much as $15 billion in emergency spending authority to Agriculture Secretary Perdue.
Key lawmakers on the House and Senate Agriculture Committees spoke to members of the North American Agricultural Journalists association on Tuesday, and a key topic was whether the Trump administration would use new authorities to pay farmers for income losses from trade disputes.
Talk about possible trade payments to farmers comes as the House Agriculture Committee is planning to mark up a farm bill as early as next week. Senate Agriculture Committee leaders are still negotiating what to include in their version of the farm bill.
Senate Agriculture Committee Chairman Pat Roberts, R-Kan., said farmers already have commodity programs and crop insurance. A new payment program created by USDA isn't the answer, he said.
Roberts said his staff has been talking to USDA about what he called "Trump trade payments" in a Senate hearing last month. "We've been talking to USDA's staff ... asking what kind of payment would this look like? And it's a very amorphous kind of effort," Roberts said.
Roberts said he also spoke to U.S. Trade Ambassador Robert Lighthizer about it, and understands President Trump is open to the idea of sending payments to farmers to protect them.
"We don't need another subsidy program," Roberts said. "We need to sell our product. We need a major sale, and it would be wonderful if we got good news on NAFTA with Mexico. There is wheat sitting on the ground in Kansas that should basically be going to Mexico. Mexico is buying from Argentina ... So we need a market. We need to sell our product. If we do that, we don't see some kind of 'crazy' subsidy program that would set a precedent, and sure enough it would be asked for every year. We just don't need that."
Roberts said he's not against assistance to "our hard-pressed" farmers, but he said it would be better to start selling product instead.
Roberts also implied emergency payment programs from USDA can become partisan. He pointed to a situation in 2000 when then-President Bill Clinton's agriculture secretary created a specific payment for Iowa grain farmers.
"It was remarkable," Roberts said. "It just happened to be a presidential (election) year."
Congress also restricted the Commodity Credit Corporation funds in 2011 after then-Agriculture Secretary Tom Vilsack announced payments that went largely to Arkansas soybean farmers who had failed to buy adequate crop insurance. At the time, then-Sen. Blanche Lincoln, a Democrat, was trying to hold her seat in Arkansas, which she eventually lost.
Sen. Debbie Stabenow, D-Mich., ranking member of the Senate Agriculture Committee, said the committee's work has been successful because it has been bipartisan. She said it would be unfortunate if a USDA fund became used by the Trump administration to pay farmers in a hotly contested mid-term election year.
"The way we get farm bills done with over 70 votes in the Senate is that we work together," Stabenow said. "It would be very unfortunate if partisan instincts took over and divided Congress along partisan lines when folks in agriculture just want us to get the job done."
Rep. Collin Peterson, D-Minn., ranking member of the House Agriculture Committee, told reporters a one-time payment paid to farmers who are angry about trade disputes is a mistake. Peterson called a one-time payment to farmers a "gimmick" that won't necessarily placate those farmers who spent years working to increase trade. "Giving them some money isn't necessarily going to buy them off," he said.
Peterson added, "I'm against a one-time bailout in a situation created by the administration. I would say if we're going to spend money, we should do it to improve the safety net on a long-term basis. That would be good."
The House Agriculture Committee is tentatively set to debate a draft farm bill next week in committee. The bill, however, is hung up over fights over mandatory job-training requirements for food-aid recipients.
Peterson said the House GOP proposal doesn't improve the farmer safety net.
"This bill is not adequate to deal with the problems we have in agriculture," Peterson said.
If he had his druthers, Peterson said, he would increase the Price Loss Coverage reference prices 10% in the farm bill. He said he's checking with the Congressional Budget Office to see what that could cost. A 10% increase in the reference price would bump up PLC coverage for corn from $3.70 a bushel to $4.07 a bushel. Soybeans would move from $8.40 to $9.24 a bushel, and wheat would increase from $5.50 to $6.05 a bushel.
"That's what's needed," Peterson said. "I'm not sure that's going to save people either."
House Agriculture Committee Chairman Mike Conaway, R-Texas, was not available to meet with reporters on Tuesday.
Chris Clayton can be reached at Chris.Clayton@dtn.com
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