Banking and agricultural groups Thursday hailed a $6 billion emergency aid package for farmers that White House and congressional negotiators hammered out amid last-minute budget negotiations.
The deal reached late Wednesday is nearly $2 billion more than Republicans included in legislation the President vetoed last week. But it falls short of the $7.3 billion originally sought by Democrats. Congress is expected to approve by today the combination of disaster payments, higher subsidies, and tax breaks for farmers as part of a catchall spending measure.
"Bankers are pleased that there is an increase in the package," said Mark K. Scanlan, director of agricultural finance at the Independent Bankers Association of America. "It won't solve all the problems, but it will give farmers and their lenders a very important income boost at a very critical time."
The agreement includes $3.1 billion in subsidy payments for crops, an increase of more than 50% from 1998 levels; $875 million for multiyear crop losses caused by natural disaster or disease; and $36 million in anticipated savings from tax-deferred accounts and other tax breaks.
The deal also would extend until April Chapter 12 bankruptcy protection for farmers, which expired Sept. 30. However, farmers and bankers failed to remove limits on borrowings against anticipated crop sales.