Panels Work on Aid for Farmers Hit by Drought

House and Senate committees continued to work Tuesday on $5-billion legislation to bail out farmers who have suffered major crop losses in the drought. Both houses are expected to act on the bill by the end of this week.

Both Democrats and Republicans expressed strong support for the legislation, which will provide compensation to farmers who suffer devastating losses, in some cases amounting to about 50% of their usual income.

There were indications, however, that opposition might develop to a proposal that would raise price supports for milk to help farmers compensate for increased feed prices. The controversial proposal, which could cost the government an estimated $300 million, appeared in the final version of the bill approved by the House Agriculture Committee.

‘Insurance Policy’

Sponsors said it was needed to provide a “minimum-cost insurance policy” to assure that there will be an ample supply of milk for consumers. But opponents, such as Rep. Dan Glickman (D-Kan.), said the price support constituted special treatment for dairy farmers and could destroy congressional support for the overall bill.

Glickman’s comments echoed those of President Reagan, who warned both houses Monday against passing a drought bill laden with “special-interest” provisions that would essentially rewrite the 1985 farm bill and turn the current legislation into a “budget buster.”

The key plank adopted Tuesday in the House bill, authored by Rep. Jim Jontz (D-Ind.), would pay most farmers 65% of their usual income for losses greater than 35% of a crop. In addition, the bill would pay an added 30% for losses over 75% of a crop.

Higher Cost Seen

Jontz said during the committee debate that his proposal would add about $275 million to the other payments that total about $5 billion. But Department of Agriculture officials disagreed with Jontz’s estimate, saying it could cost taxpayers more because the proposal did not count the aid that could be provided to fruit and vegetable farmers.

Criticism also came from Assistant Agriculture Secretary Ewen Wilson, who questioned the need for the dairy subsidy. He and others noted that the drought bill already called for the repeal of a 50-cent cut in the federal milk price support slated to take effect on Jan. 1.

Meanwhile, the Senate Agriculture Committee continued to work on its version of the drought bill. Members clashed over a proposal to increase compensation for farmers beyond the guidelines in the House bill, but they expressed optimism they would have a package ready for approval by the end of the week.

The cost of both bills would be paid for with an estimated $6 billion to $8 billion in federal savings next year that have been realized through reduced price support payments to farmers.