Clinton’s farm bailout favors Corn Belt

WASHINGTON (AP) — The Clinton administration’s proposed farm bailout favors Minnesota and three other Corn Belt states, which stand to get more than $2 billion of the $7.5 billion in aid, according to congressional analysts.
By contrast, Minnesota, Iowa, Illinois and Nebraska would get $835 million, or about 20 percent, of a rival $4 billion package that Republicans are pushing through Congress.
Iowa producers stand to get $600 million under the administration’s plan, $365 million more than Republicans would provide, the Congressional Budget Office estimates.
North Dakota, the state that economists agree was hardest hit by the downturn in the agricultural economy, would gain $115 million under the administration’s plan. South Dakota would get $149 million more.
The disparity has to do with the way the plans are put together. Both plans include more than $2 billion in disaster relief for farmers who lost crops to drought and disease.
To compensate for low commodity prices, Republicans would provide an additional $1.7 billion in direct payments to all growers.
Democrats would instead give farmers $5 billion through a program that subsidizes growers when prices for certain commodities fall below set levels. Since farmers raise far more corn than wheat, corn-producing states would benefit the most, said John A. Schnittker, a former Agriculture Department economist. Farmers whose crops failed would not get the subsidies.
Schnittker, a private consultant to food and agribusiness companies, said that much of the money in both bills will go to “big and well-financed farmers” who are coming off several good year.
The National Association of State Departments of Agriculture says neither plan is big enough and has asked Congress for $9 billion.
The administration has threatened a veto of the Republican plan, which is expected to reach the Senate and House for votes in the next few days.
Senate Democrats are hoping that Midwest governors will pressure Republican lawmakers to lobby the GOP leadership for more money. “A difference of a quarter billion dollars for rural Minnesota should be worth a phone call or two to get us some votes,” said Sen. Paul Wellstone, D-Minn.
A letter pointing out how much the Corn Belt states would benefit was sent to 11 Midwest governors on Wednesday.
Democrats say they will move to send the GOP proposal back to a House-Senate conference committee until Republicans add more money. “We will stay here as long as it takes,” said Senate Minority Leader Tom Daschle, D-S.D.,
Texas, which was hit hard by drought and heat this summer, is likely to be the biggest single beneficiary regardless of what happens. Texas would get $813 million under the GOP package or $896 million through the administration package.