Farm Bill Discussed at Farmers Convention

Farm Bill Discussed at Farmers Convention http://www.nytimes.com/aponline/business/AP-Farm-Scene.html By THE ASSOCIATED PRESS

ST. LOUIS (AP) -- Some Illinois farmers are concerned that Congress could shave federal price supports and other money from the next farm bill because of costs associated with the Iraq war and Hurricanes Rita and Katrina.

At the annual Illinois Farm Bureau meeting, which runs through Tuesday, farmers such as corn-and-soybean grower Henry Kallal said they hope federal lawmakers keep much of the U.S. farm bill intact when it comes up for renewal in 2007.

Federal lawmakers expect to begin hearings on the bill next year.

''Most everyone likes the 2002 farm bill. But that was made when there was a lot of money in the budget for agriculture,'' said Kallal, who along with his brother and 29-year-old son farm about 2,000 acres near Jerseyville, 35 miles northeast of St. Louis.

The 350-plus voting delegates at the farm bureau meeting will debate a task force's recommendations on the farm bill and other measures, and the Illinois group's strategy will be shared at the American Farm Bureau convention next month in Nashville.

U.S. Secretary of Agriculture Mike Johanns has said recently the amount of federal subsidies in the next farm bill will depend on the country's success in breaking down global trade barriers. Past success in equalizing markets and a better overall farm economy in recent years make it likely the next farm bill will be smaller than its 2002 predecessor, he has said.

''What they're looking at is maybe there's not as much money in the budget for farm programs,'' said the Illinois Farm Bureau's John Hawkins.

At the meeting, farm bureau delegates will consider 137 resolutions that cover everything from agricultural education and biofuels to landfill alternatives, farming methods and endangered species.

Debate can be contentious. During last year's convention in Chicago, delegates haggled for two hours about a topic expected to resurface this year: so-called 1031 tax exchanges, which are named after the section of the federal tax code that allows them.

Under these exchanges, property sellers can avoid paying capital gains taxes if they buy ''like kind'' property within a certain time of the transaction, generally 60 days.

The exchanges have been blamed for driving up farmland prices. For example, farmers around Chicago and St. Louis are fetching top dollar from developers for their land, then snatching up land in other parts of the state to work themselves or lease, farm bureau officials said. Farmers who get a windfall by cashing out their suburban land often are able to easily outbid young farmers or would-be newcomers.

Farm bureau spokesman Dennis Vercler said the debate over these tax exchanges is a ''generational issue.'' Older farmers embrace them as a welcome boost to retirement savings, while younger farmers feel it's ''driving up prices and hurting them,'' Vercler said.