Negotiators Agree on Farm Aid Package

Congressional negotiators agreed Wednesday on a massive $15-billion package of farm assistance that would compensate growers for a third straight year of low commodity prices and would cut sharply the cost of buying crop insurance.

The election-year aid includes $5.5 billion in direct payments that would reach farmers by Sept. 30, in the midst of this fall’s congressional campaigns.

About $8.2 billion would go toward reducing premiums on federally subsidized crop insurance over the next five years, and the legislation makes a series of changes in the insurance program designed to get more farmers to buy the coverage.

The legislation still needs final approval in the House and Senate, which could come as soon as Thursday.

“This economic package is a testament that a strong farm economy is important for all Americans,” said Sen. Richard G. Lugar, an Indiana Republican who is chairman of the Senate Agriculture Committee. Sen. Kent Conrad (D-N.D.) said the aid “is hugely important” to farmers.

It is the third year in a row that Congress has provided a multibillion-dollar bailout of the farm economy. But this time, with both congressional and presidential elections looming, lawmakers didn’t wait until the fall to do it.

The Agriculture Department has estimated that net farm income this year would drop $7.6 billion, or 16%, without another aid package.

The Clinton administration has objected to the way that the direct farm payments would be distributed, contending the money is not targeted to producers who need it the most. But the administration has stopped short of threatening a veto.

The aid package will meet “a significant need out in farm country,” but “it hasn’t addressed the long-term difficulties facing [the] American farmer and the long-term problems in the 1996 farm bill,” said Andy Solomon, a spokesman for Agriculture Secretary Dan Glickman.