WASHINGTON — Farmers are in a line to get their third big bailout from Congress in as many years, with most of the money arriving in the thick of this fall's political campaigns, under a budget agreement between House and Senate negotiators.
The deal reached Wednesday provides $5.5 billion that would be paid to farmers by Oct. 1, with an additional $1.64 billion to go out later.
"It's important to understand that there's a crisis in rural America, even while the rest of the economy's been growing," said Sen. Charles Grassley, R-Iowa. "Depressed markets have left our farmers with the lowest prices in 25 years."
The money is included in a $1.8 trillion spending plan that will frame government spending for the 2001 budget year.
None of the farm payments can be made until Congress passes legislation necessary to release the money.
Lawmakers still must decide exactly how the aid is to be spent but $5.5 billion is likely to be used for direct payments to farmers who grow grain and cotton and have "market-transition" contracts with the government, with the remaining money going to producers of other commodities, congressional aides said.
Congress has provided $15 billion in special assistance to farmers over the past two years, including $8.7 billion in 1999, to compensate them for low commodity prices as well as weather-related crop failures.
Because of the continuing slump in commodity prices, the Agriculture Department predicts net farm income this year would drop $7.6 billion, or 16 percent, without another aid package from Congress.
The Clinton administration has proposed $4.2 billion in farm income assistance, with most of the money going to a new subsidy program that Agriculture Secretary Dan Glickman wants to create.
In addition to the bailout money, the congressional budget agreement authorizes an additional $8.2 billion in spending over five years to expand the federally subsidized crop insurance system and cut the premiums that farmers pay.
The House and Senate were expected to vote on the budget agreement as early as today.
Sen. Kent Conrad, D-N.D., said the $7.1 billion agreed to Wednesday isn't enough.
"It's very clear that we're going to have to get another disaster bill of the magnitude of what we had last year to avert some very, very serious farm losses," he said.
Congress is likely to provide additional assistance for farmers who lose crops to drought or flooding this year, but it is too soon to know how much will be needed, said Pat Wolff, a spokeswoman for the American Farm Bureau Federation.
A drought has been developing over a section of the Midwest stretching from Nebraska to Illinois.
The negotiators split the difference between what the Senate and House had put in their versions of the budget plan for farmers. The Senate had approved $8.5 billion, while the House wanted $6 billion.
"We're certainly pleased that Congress recognizes that there's a need to provide additional assistance to troubled farmers and ranchers," Wolff said.
It is virtually certain that Congress won't make any changes in the 1996 farm law, as Democrats have proposed.
The chairman of the House Agriculture Committee, Texas Republican Larry Combest, said there "was no consensus" among farmers to "scrap the current farm policy." His committee has been holding a series of hearings around the country.