Payment limitations on agenda?

Congressman Charlie Stenholm, D-Texas, says he's “a little worried” about what could happen to the Farm Security and Rural Investment Act of 2002 when legislators mark up an agricultural appropriations bill.

“They will bring up payment limitations again,” Stenholm told a group of Texas cotton ginners recently in Lubbock, Texas.

Stenholm said he wished he had better news.

“Things could get interesting,” he said, “as we begin work on an appropriations bill. Payment limitations will be an issue and we know what that will do to the cotton industry.”

Stenholm said his “good friend Senator Grassley” doesn't understand what payment limitations would do to Southern agriculture. “We will continue to agree to disagree,” he said.

A key factor will be the state of the economy when Congress takes up the appropriations debate. “I wish we had already passed ag appropriation legislation,” Stenholm said.

He said the prolonged drought that has scorched much of the Midwest this summer and severely reduced grain and soybean yield potential makes the situation even more precarious. Agriculture needs disaster assistance, he said, for both 2001 and 2002 crops.

“We will make an effort to provide drought assistance,” he said, “but that will be difficult without re-opening the farm bill,” which could expose payment limitations again. Also, the Bush administration has insisted that any disaster funding come from money earmarked for the Farm Security and Rural Investment Act of 2002, not from new funds.

“We have to proceed with caution.”

Stenholm said Grassley's approach to improving farm efficiency flies in the face of reality for Southern farmers, as well as for many Corn Belt producers.

“Farms have gotten more efficient by adopting technology and getting bigger,” he said. “Now, Senator Grassley and others say big is bad. They contend that getting smaller will improve efficiency.”

That mindset ignores the basic economic principal of economy of scale. It's a short-term approach to an industry that must look years into the future, the congressman said.

“Corporate America could learn a few things from agriculture,” he said. “Corporate decisions in the past few years have been based on the next quarterly report. They have no long-term outlook.”

Stenholm said Congress also needs to revisit crop insurance legislation.

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