Landmark farm bill curtailing subsidies is signed by Clinton President is concerned bill neglects 'safety net' for family farmers

April 05, 1996|By KNIGHT-RIDDER NEWS SERVICE

WASHINGTON -- With little fanfare, President Clinton signed sweeping new farm legislation yesterday that supporters say will free farmers to produce for the market and that critics charge will leave producers without protection if prices drop sharply.

Mr. Clinton said he was concerned that the bill does not provide an adequate safety net for family farmers. But the legislation is long overdue, and many of its proposals will enhance environmental and economic development, he said.

"I am firmly committed to submitting legislation and working with the Congress next year to strengthen the farm safety net," Mr. Clinton said.

However, both supporters and critics view the bill as a landmark change in U.S. farm policy.

While cotton and grain farmers will continue to receive government subsidies under the new law, the structure of those payments has been changed significantly.

Previous farm policy largely required farmers to plant the same crop year after year to receive subsidies. But the new law "decouples" payments from production -- thereby freeing farmers to plant almost any crop, with the exception of fruits and vegetables, on their land without loss of subsidy payments.

Subsidies would also be capped for the first time. Previously, farm subsidy payments have risen and fallen each year in response to market prices. But under the seven-year "market transition contracts" contained in the act, crop subsidies to farmers would decline to about $4 billion by fiscal 2002, from $5.6 billion this year.

Critics, such as Senate Minority Leader Tom Daschle of South Dakota, complained that the switch from fluctuating payments to fixed ones will remove the "safety net" feature of farm programs.

Supporters argue that the fixed payments will allow farmers to plan their financial futures and prepare for an era of less help from the federal government.

Under another important change in the new law, the U.S. Department of Agriculture will no longer use annual acreage set-aside programs to help manage supplies. Set-asides have been criticized in recent years for failing to accomplish their objective of boosting prices for farmers. Instead, critics said, the set-asides encouraged foreign competitors to expand production.

Loan programs will continue for cotton, oilseeds and grains under the new law, but other traditional features of farm programs, such as target prices and the Farmer-Owned Reserve for wheat and feed grains, are eliminated.

Pub Date: 4/05/96

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