By Charles Abbott
ORLANDO, Fla. (Reuters) - Congress should plan on spending $18 billion a year on farm supports -- double the amount now allotted -- to shore up a sector sapped by brutally low grain prices, the head of the largest U.S. farm group said on Sunday.
The price slump, the result of a global grain glut, is in its fourth year with no sign of recovering soon. Corn, wheat and soybean prices are at levels last seen during the agricultural recession of the mid-1980s.
Congress has enacted more than $24 billion in farm bailouts and disaster relief since late 1998, when prices collapsed. The law, however, expects farm subsidies to cost only several billion dollars annually, this year and into the future.
"I think you'll have to double that," Bob Stallman, president of the American Farm Bureau Federation, told reporters at the start of the AFBF annual convention. The amount allotted by law "is woefully inadequate."
"The farm economy would be devastated if we don't get that changed."
AFBF delegates will vote later this week, during policy discussions, on language calling for larger funding for nearly every aspect of farm policy -- crop supports, conservation, export promotion, research and risk management, such as crop insurance. The language has been approved by the resolutions committee, usually a sign it will be adopted.
Stallman mentioned $18 billion a year as an indication of what would be needed, based on outlays during the past three years. There is wide interest in farm country for Congress to alter farm law so more money would automatically flow to growers when prices slump but there is no agreement how to set up a "counter-cyclical" payment plan.
President-elect (George W.) Bush was more likely to ask for modifications in the 1996 "Freedom to Farm" law than to try to rewrite it this year, Stallman said. The law expires with 2002 crops.
"At this point, I don't see any indication he's going to rewrite farm policy," Stallman said. "I think he'll have a short-term agenda and a long-term agenda."
Farmers received a record $28 billion in direct federal payments in the fiscal year ending last September 30. House Agriculture Committee chairman Larry Combest, a Texas Republican, said on Friday that another multibillion-dollar farm aid package was likely this year, a view held by other lawmakers.
Last year's $28 billion included $7.14 billion in a congressionally approved rescue package, more than $5 billion in supports guaranteed by the 1996 law, several billion dollars in so-called loan deficiency payments available when market prices are below federal minimums, about $2 billion in conservation payments and a couple of billion dollars in insurance indemnities.:
