The Senate Agriculture Committee today is scheduled to debate and approve a proposal for the 2007 Farm Bill that can be considered by the full Senate. The past two editions of the farm gate have summarized many of the elements on the table, and today you’ll get a look at Committee Chairman Tom Harkin’s proposals for Rural Development, Research, and Credit.

A summary of the Harkin proposal is found on the website for the Senate Agriculture Committee.

In the Rural Development portion of the proposal, Senator Harkin endorses mandatory funding for day care, hospital equipment in small towns, broadband grants to libraries, and low interest programs for rural electric cooperatives. On the issue of broadband Internet access, Harkin focuses aid where at least 25% of households do not have such service and restricts aid to areas where there are three or more providers already.

The proposal would continue grants to promote locally grown value added foods, but reduce funding from $500,000 to $300,000. A new element in the Value Added program would bolster rural collaboratives to boost rural economies, quality of life, and job creation. Other programs would support micro-enterprises with assistance and loans for beginning entrepreneurs.

Senator Harkin’s Rural Development programs would exclude cities of more than 50,000 population and areas contiguous to those cities.

The Harkin Research proposal is similar to that proposed initially by the USDA and already adopted by the House of Representatives. It creates a federal agricultural research administrator, similar to the National Institutes of Health, who would coordinate national research priorities and ensure that universities would share in research funding as well as allocate money to competitive grants. The new National Institute of Food and Agriculture would supervise research that would have a high degree of visibility. The proposal also puts funding priority on specialty crops, invasive species, food safety, and organic production.

In the Credit portion of the Harkin proposal, he begins with a pre-amble that indicates the challenges are immense for beginning and socially disadvantaged farmers and ranchers, particularly for obtaining land and equipment, credit, and building equity. Among his proposals are:
1) A subsidized interest rate so beginning farmers can borrow down payment money which would be 4% below standard rates, but no less than 2%. It also reduces the borrowers minimum down payment to 5% of the purchase price, and increases the maximum amount of money that can be borrowed.
2) Establishment of a pilot program to match the savings account of a beginning farmer or rancher designed for capital expenditures, including land, buildings, equipment and livestock.
3) Encourages private land sales that transfer farms from retiring farmers to new farmers, however details are not provided in the summary.
4) Increase direct farm ownership and operating loan limits up to $300,000.
5) Prioritizes funding for farmers wanting to convert from conventional production to either organic or sustainable farming practices.
6) Provides incentives for retiring farmers to aid beginning farmers if the land involved is in the Conservation Reserve Program.
7) Eliminates term limits on guaranteed loans and allows all farming experience to be considered when applying for a loan, and allows guaranteed farm ownership debt to be eligible for direct loans.

Summary:
With the Senate Committee on Agriculture beginning its debate of the Farm Bill, quick movement should be expected toward full Senate action. The Harkin proposal puts major rural development focus on improvement of Internet services to rural areas and other grant programs that will build quality of life and job creation in more rural areas. He also joins the House in creating a National Institute of Food and Agriculture for the purpose of research oversight, and eases credit issues for beginning and disadvantaged farmers.