The federal government is edging closer to approving an emergency aid package for farmers.

The aid plan, which the House of Representatives endorsed Friday on a 240-to-175 vote, would give an additional $8.7 billion in fiscal year 2000 to U.S. farmers, who have been plagued by low commodity prices and reduced demand overseas. The Senate is expected to vote on an identical bill this week, possibly as early as today.

John M. Blanchfield, an agriculture specialist at the American Bankers Association, said the aid would benefit agricultural lenders as well.

"The theory is, the farmers will take this cash, plus the payments they would normally receive, plus the sale of their commodities, to retire debt, fund their operations, and continue their business into 2000," he said. "Without this increase, some farmers probably would have had problems retiring their 1999 farm operating loans."

Of the $8.7 billion, about $5.5 billion would be used to nearly double the annual payments made under the government's Agricultural Market Transition Act program. About $650 million would increase subsidies to farmers who want to buy crop insurance, and $1.2 billion would help farmers struck by natural disasters.

The emergency aid package is part of a broader spending bill for agriculture. That bill is not perfect, Mr. Blanchfield said. For example, he said, the money the legislation would set aside to fund Farm Service Agency loan guarantees would "nowhere near meet demand" from farmers. In fiscal 1999, funds guaranteeing such loans nearly ran out after six months.

It is unclear whether President Clinton will sign the bill.

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