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Will terrorism war kill farm subsidies?

Farmers fear they could lose federal funds

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LAFAYETTE, Ind. — Chad Healey has no quarrel with the tens of billion of dollars that Congress has appropriated in the past two weeks to rebuild New York, plan for a war on terrorism and bail out the nation's airlines. All those things are necessary, he said.

But he hopes the spending doesn't cause Congress to scale back the 10-year, $167 billion farm bill that would continue price and income subsidies to farmers like him who grow bulk commodities such as cotton, corn and wheat.

"I'm concerned that it's gotten put on the back burner," said Healey, 25, who along with his father raises hogs and farms 800 acres of corn and soybeans in Indiana's Jasper County. "Right now farmers are living on that government check."

Healey was among some 250,000 farmers, vendors and students who trekked to the cornfields of Alan Kemper and Jerry Smit over the past three days for the "Farm Progress Show 2001," where people come to kick the tires on new equipment that costs hundreds of thousands of dollars, learn about new pesticides, be entertained and chat with old friends.

While much of the information is available on the Internet, they like to spend time and talk shop with other people who understand the rigors of their work. And this year, farming's future in the face of the terrorist attacks was a hot topic.

Here as just about everywhere else, the attacks have touched off a wave of patriotism, and American flags were attached to just about everything. In this blue-jeans-and-boots crowd, many people said they could not fathom living in the "rat race" of New York or Washington. But that didn't stop their hearts from breaking for the families of those killed in both cities.

There was also a lot of worried discussion, as the country prepares for military conflict, about whether lawmakers will remember that farmers are crucial to the nation's future. At the heart of their concern is the farm bill, which pays some farmers not to plant crops on some land and artificially props up the prices of other crops. Many farmers have come to depend on these supports and view them as sacrosanct.

Congress last approved a farm bill in 1996, and it expires at the end of 2002. Under consideration now is a bill that would regulate farm and nutrition programs for the next decade. The House had set floor debate on its version for the week of the Pentagon and World Trade Center attacks. That debate has now been pushed way down the priority list, and the Senate is not even as far along as the House.

"I hope Congress realizes they can't lose focus on the heartland," said Kemper, who farms 2,000 acres just outside Lafayette. A staffer for Dan Quayle when Quayle was a senator, Kemper still keeps a hand in national politics. "My concern is that they might have to scale back the farm bill because they don't have enough money. I think that would be harmful because the farmer is the pass-through for rural economic development."

Also worrying some farmers is the impact any future military attacks will have on commodity markets overseas, said Wally Tyner, who heads Purdue University's department of agricultural economics. The international market is crucial to American agriculture; U.S. farmers send corn, barley, oats, rye and sorghum around the world. While the volume is large — the United States exported nearly 30 million metric tons of wheat in 1999, about 2 million tons of it to the Middle East — individual farmers say their earnings are small.

"The U.S. economy was already moving into recession," Tyner said. "Now, it's plunging into one. The rest of the world economy was petering also. That means that all kinds of goods will be traded less."

One threat to the price supports that farmers have come to expect is a set of policy priorities released last week by the U.S. Department of Agriculture that seeks to move away from direct payments to farmers. That would be a drastic change from the bill drawn up by the House Agriculture Committee and supported by major farm groups.

The debate is not new. In 1996, the last time the farm bill was considered, Congress passed the Freedom to Farm Act, which was supposed to phase out many farm subsidies by 2002. Since then, however, subsidies have increased to record levels — $20 billion last year — as Congress has doled out "emergency" payments to help farmers through a series of rough patches.

Even talking about an end to those payments is upsetting to people like Smit, who co-hosted the show here and farms 1,000 acres near Lafayette. At a time when the government is talking about going to war, he said, it ought to be doing everything possible to shore up the nation's food supply. In addition to price supports, Smit would like to see less dependence on foreign oil and more on ethanol — a by-product of corn — as a fuel source.

"This war is going to have a huge impact," said Smit, 48. "Our markets are already depressed."

But Randy Allen, 42, who farms 2,500 acres in Danville, Ind., said after the initial scare of the attacks, he feels better about the future. Planes are flying again, and the sperm to artificially inseminate his sows arrives on time. Gas prices remain stable.

"For now, I think things are going to be all right," he said.