Senate bill gives quicker income boost than House's

WASHINGTON -- Economists who analyze agricultural policy for Congress said Monday that a Senate-passed farm bill will provide a quicker boost to growers' income than the House version.

But the House legislation will provide slightly higher income after 2003 as its higher price supports begin to kick in, the economists said. An analysis of the impact of the bills on typical farms scattered around the country also favored the House bill.

The Senate bill would boost national farm income by $7.1 billion this year, or 19 percent more than it would be under existing government programs and $6.3 billion more than it would be under the House-passed legislation, the economists said. By 2004, however, farm income would be $2 billion higher under the House bill.

Senate Agriculture Committee Chairman Tom Harkin said the analysis showed that the Senate legislation would "provide stronger and more stable farm income."

But Keith Williams, a spokesman for the House Agriculture Committee, said the longer-term analysis favors the "House's broad-based approach."

Economists from the University of Missouri and Iowa State University analyzed the bills for their overall impact on farm income, while economists from Texas A&M University looked at the effect of the legislation on representative farms around the country. Their reports were funded by Congress.

Different mix of formulas

A House-Senate conference committee is currently negotiating differences between the two bills. Both measures would increase farm subsidies sharply, but with a different mix of formulas and payment triggers.

In 2003, 27 of 59 sample grain and cotton farms around the country would do better under the House bill than the Senate version, the economists found. The Senate bill is better for 22 farms and the remaining 10 would fare the same under either measure.

By 2006, 39 of the farms would fare better under the House bill, while just 11 would be better off under the Senate legislation. Some examples:

A 1,760-acre wheat farm in North Dakota would have $74,690 in net cash income under the House bill in 2006, compared with $71,430 under the Senate version.

A 950-acre corn farm in Iowa would make $112,760 under the House bill, compared with $100,310 under the Senate version.

In Arkansas, a 5,000-acre cotton farm would have $752,280 in net income under the House bill, versus $558,000 under the Senate bill.

The Senate legislation provides less money to southern cotton and rice farmers because of a $275,000 cap on the amount of subsidies that an individual farm can receive.

Chance of exceeding limit

In another finding, the economists said there is a one-in-three chance under either bill that the United States would exceed the $19.1 billion annual limit that the government is allowed to spend on farm subsidies under the World Trade Organization, the economists said. Both bills would require the Agriculture Department to cut subsidies to keep within the limit.

The House bill increases annual farm income by an average of $4.4 billion a year -- or slightly more than 10 percent -- over the next 10 years. The Senate bill increases farm income by $4.1 billion annually.