Joint committee agrees on low support farm bill

Press, 11 December 1981, Page 21

Joint committee agrees on low support farm bill

NZPA staff correspondent

Washington

A joint United States Senate and House of Representatives committee has reached eleventh-hour agreement on a stern budget-cutting farm bill to govern support prices and associated schemes for the next four years. The bill still has to go back to both the Senate and the House for ratification, however, and its passage through the House promises to be stormy. Support prices are a long way below those the farming lobby wanted, and both dairy and wool support levels are lower than earlier envisaged. The bill is good news for the New Zealand dairy industry. facing an ever-growing lake of dairy surpluses here, but it may well drive the American farming lobby to even more vigorous opposition, if that is possible, to many imports from New Zealand. (The United States .International Trade Commission, for example, is studying now. after pressure from American dairy farmers, whether imports of New Zealand casein injure their interests, and the commerce department, after an interim ruling that New Zealand subsidises its lamb exports, has imposed a temporary countervailing duty on f.o.b. lamb prices of 6.19 per cent.) The new bill will maintain the present support level for milk of SUSI3.IO per hundred pounds weight for the 1982 fiscal year.

Levels after that will depend on a formula designed to lower production. If the Government spends more, than $1 billion buying up surplus dairy products in any one year, the support levels will be $13.25 per hundred pounds weight in fiscal 1983, $14.00 in fiscal ■1984, and $14.60 in fiscal 1985.

If Government purchases are below $1 billion in any

one year, the level will be set at 70 per cent of parity (a cost-price formula), a dollar figure which would work out higher than the previous figures but still a lower level than the current 80 per cent of parity. If Government purchases drop to less than four billion pounds weight in 1983. 3.5 billion pounds weight in 1984, or 2.69 billion pounds weight in 1985. the support price will go up to 75 per cent of parity.

For sheepfarmers, the present, wool support level of 85 per cent of the statutory formula drops to 77.5 per cent, though this may not necessarily mean a lower dollar figure, as the statutory formula (another complicated pricing mechanism) is itself subject to fluctuations. The agreement came when House negotiators on the joint committee reversed their refusal to accept a compromise bill agreed between the Senate side and the Administration. The rejection was narrow, an 8-7 vote, and so was the acceptance, again an 8-7 vote, which came when one congressman abstained and another who was absent earlier voted in favour.

The total package will cost American taxpayers SUSII billion over the four years — SUS 4 million more than the origianl Senate version which President Reagan said was the highest he would accept, but a staggering $5.6 billion below the original House of Representatives' $16.6 billion bill.

The Secretary of Agriculture. Mr John Block, told the joint committee before the vote by the House members that it was the “last chance" to pass any kind of commodity support programme.

Some of the other measures included in it are the Government’s food stamps programme for the

needy, agricultural research, grain support levels (another last-minute cliff-hanger), and a “food for peace" programme. Also in the farm bill is the measure to force all imported meat to comply with American standards, and be checked for "species origins" (to make sure it is not kangaroo meat or horse meat). This was a compromise proposal put forward by the Senators on the committee, and accepted only after great difficulty, after a House move to ban all imported meat produced with the aid of chemicals or drugs prohibited in the United States.

The House proposal would have put New Zealand's $4OO million a year meat trade with the United States in jeopardy, but. with the bill finished by the committee, the compromise must now go before the House rules committee because it was weaker than either the original House or Senate proposals. and therefore technically outside the committee's scope.

Mr Block told reporters that he would recommend that the President sign the farm bill in its present form, and that the Administration would be “actively working" on its passage through both the House and the Senate. The House Democratic Whip, the Washington state Democrat. Mr Thomas Foley, who is a former House agriculture committee chairman, said it would be the filth major farm bill in which he had taken part “and the only one I cannot support."

Mr Foley said he would not support the compromise.

“Nor do I believe I can urge anyone on the floor of the House who will listen to my advice to support it." he said.