Farm Bill Played Out in Crucial Midwestern State

WASHINGTON – South Dakota ranks No. 20 in farm production, but no state has more influence in the debate over how the government subsidizes and regulates agriculture.

A farm bill has been snagged for weeks over issues critical to South Dakota farm groups and the state's two senators, Majority Leader Tom Daschle and fellow Democrat Tim Johnson.

The stakes also are high for President Bush and Republicans, who have targeted Johnson for defeat next November in the GOP's effort to regain control of the Senate. Daschle holds the reins there because of a one-vote Democratic majority.

Bush is traveling to South Dakota on Wednesday to raise campaign money for Johnson's opponent, GOP Rep. John Thune. Bush and Agriculture Secretary Ann Veneman also plan to meet privately with South Dakota farmers and visit a plant that makes ethanol, a gasoline additive, from corn.

Daschle was key to engineering an agreement in an energy bill now before the Senate that will triple the use of ethanol over the next decade. Senators from California and New York have strongly objected to the ethanol mandate, arguing it could produce fuel shortages.

Like ethanol, the farm bill now being negotiated between key House and Senate lawmakers is "a personal priority," says the Senate majority leader.

Daschle "still looks at where he came from," said Wally Koester, a South Dakota corn grower. "For a state the size of South Dakota, that does an awful lot for us."

Koester is counting on Daschle to win a change in how some subsidies are calculated that could benefit South Dakota more than any other state. Daschle also is pressing for higher corn price guarantees and for two other measures sought by farmers and ranchers in South Dakota and neighboring states.

One would ban meatpackers from owning cattle and hogs in competition with independent producers. The other would require meat to be labeled with the country of origin.

A win on either of the livestock measures "would definitely be a major victory" for Daschle and Johnson, said Michael Held, an executive with the South Dakota Farm Bureau.

Republicans say its Daschle's fault that the House and Senate haven't agreed on a new farm bill. GOP lawmakers say House and Senate negotiators were near agreement on several key issues, including subsidy rates, during late-night talks April 15.

But Daschle wasn't there that night. After Daschle reviewed the numbers the next day, the lead Democratic negotiator, Senate Agriculture Committee Chairman Tom Harkin of Iowa, objected to the deal. That prompted Harkin's House counterpart, Rep. Larry Combest, R-Texas, to storm out of the talks, according to participants in the meeting.

Senate Democrats "appear to be more committed to creating a campaign issue than to solving our current agricultural crisis," said Republican Rep. Saxby Chambliss, who is a Senate candidate in Georgia. Sen. Charles Grassley, R-Iowa., said Daschle has "played a dominant role" in the talks.

"To a large extent in the Senate, Daschle has driven the farm bill, more so than Harkin," said Otto Doering, a farm policy analyst at Purdue University.

For his part, Daschle said it's House Republicans who have refused to compromise.

There's no question the farm bill will boost crop subsidies by about 70 percent, but the House and Senate are divided over the best way to divide the money. Senate Democrats favor a sharp boost in subsidies that are tied to a farmer's annual crop volume. The Bush administration and House Republicans say that would swell crop surpluses. They want more money put into subsidies that aren't linked to production.

Daschle also wants to alter formulas used in calculating some government payments so the subsidies are based on crop yields that farmers are getting now, not what they were receiving in the mid-1980s.

Thanks to advances in plant breeding, the average corn yield in South Dakota has jumped 75 percent since the mid-'80s, compared with increases of about 25 percent in Iowa, Illinois and Nebraska.

Nationally, cattle and hog producers are divided over the meat-labeling requirement as well as legislation that would force packers to sell their cattle and hogs. But there's no division in South Dakota. Farmers there see themselves as victims of foreign competition and the market power of giant beef and pork processors.

"I hope he (Daschle) stands strong. I don't care if there isn't a farm bill," said Joe Vetter, co-owner of a Herreid, S.D., cattle market.

The White House opposes the labeling rule but hasn't taken a position on prohibiting packinghouses from owning livestock herds.