FARM SUBSIDY OVERHAUL: HARVEST TIME NEAR

WASHINGTON (FNS) -- Conference negotiations on a massive overhaul of the nation's farm subsidy program are expected to be completed by the end of this month, following the passage of the House version Feb. 29, congressional leaders said.The Senate passed its plan Feb. 7. Both versions would rewrite the rules for farm subsidies, essentially ending a system that dates back to the New Deal. Instead of

WASHINGTON (FNS) -- Conference negotiations on a massive overhaul of the nation's farm subsidy program are expected to be completed by the end of this month, following the passage of the House version Feb. 29, congressional leaders said.

The Senate passed its plan Feb. 7. Both versions would rewrite the rules for farm subsidies, essentially ending a system that dates back to the New Deal. Instead of giving subsidies or price supports to farmers, the government would for seven years give farmers fixed and declining payments regardless of market conditions.

Dropped from the House bill was a controversial provision that would have raised the consumer cost of milk by requiring that powdered or condensed milk be added to thicken the product.

Chief executive officers and other officials representing America's major dairy food companies objected strongly to the provision, charging it would raise consumer prices by 20%, or at least by 40 cents per gallon.

Companies raising concerns about the scrapped dairy provision include Dean Foods, Safeway, Kroger, Dreyer's Grand Ice Cream, Fleming Cos., Kraft, Hershey, Supervalu, Eskimo Pie, Good Humor-Breyers Ice Cream and Wawa. A similar plan was eliminated from the Senate bill.

The Food Marketing Institute here had also opposed the scrapped dairy provisions.

The Food Marketing Institute, in an "Issuegram" to its members, said that the defeated dairy title "would have been a major step backward, increasing government regulation and increasing prices of milk and other dairy products." The victory for consumers was the result of a wide coalition of milk processors and retailers, some producer groups, and taxpayer and consumer groups, FMI said.

The United Fresh Fruit and Vegetable Association, Alexandria, Va., said in a release that it was successful in adding legislation to the bill that would prevent farmers from planting fruits and vegetables in acres usually set aside. The Senate bill includes provisions not in the House plan pertaining to nutrition, credit, rural development, research and promotion. The Senate plan also would reauthorize food stamp and nutrition programs, as well as a rural development program. The Senate also provides $300 million more than the House plan for rice subsidies and for higher loan rates for oilseeds.

Agriculture Department Secretary Dan Glickman has said he opposes the fixed payment system and wants the final bill to include provisions on nutrition, research and rural development similar to those in the Senate plan.