Senate panel OKs farm disaster aid; ag committee may nix House meat idea

In beginning work on the Farm Bill, the Senate Finance Committee yesterday approved the creation of a $5.1-billion fund that would help farmers who are hit hard by weather-related problems. Under the plan, farmers would have to purchase crop insurance to qualify for the relief. The source of funding for the disaster relief program would come from new restrictions on corporate tax shelters, reports The Des Moines Register from its Washington, D.C., bureau. The changes would bring in about $10 billion over 10 years.

These tighter tax rules, however, could mean a fight with the White House and in the Senate, as some Republicans said the new restrictions amounted to a tax increase, Philip Brasher writes. Sen. Charles Grassley, R-Iowa, remained a strong supporter of the disaster relief, he disagreed with othe characterization, and he emphasized the importance of having a permanent fund to help farmers, reports the Omaha World-Herald from its D.C. bureau.

"We won't have to go through the trouble of setting up a new way to administer it every time we do (a) disaster package," Grassley told Jake Thompson. "Also, what's most important to me is that this is tied directly to crop insurance. Tying the two together was the only way it will work. "

Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, prefers the creation of a broad safety net instead of one focused on disaster relief, reports The Washington Post. Harkin told Dan Morgan that the disaster program is "a priority for three or four states, but not for the country."

In addition to the proposed disaster fund, the committee also agreed to expand subsidies for cellulosic ethanol to $1.28 in tax credits per gallon by reducing the 51-cent per gallon tax credit for corn ethanol to 46 cents. The Agriculture Committee plans to wait to begin work on the rest of the Farm Bill until the week of Oct. 22, right after Congress' week-long holiday for Columbus Day.

Harkin said that when the Senate does begin marking up the House bill, one provision might not make the cut — a change that would allow some state-inspected meat to be sold in other states, reports Meatingplace.com. Currently, smaller meat processing operations must pass federal inspection before being allowed to ship across state lines. This provision "would allow some state-inspected meat to cross state lines if the state's inspection procedures were identical to those performed by federal inspectors," Janie Gabbett writes. She reports that the provision has drawn the attention of consumer groups and opposition from Sen. Barbara Boxer, D-Calif. (Read more)