DEMOCRATS OFFER FARM BILL PLAN

DEMOCRATS OFFER FARM BILL PLAN

Senate Agriculture Committee Democrats presented Republicans with a ''consensus plan" that represents the views of the committee's 10 Democrats and is intended as a "starting point" for talks with Republicans, committee sources said Wednesday.

The Democrats have proposed a 1990 farm bill that would raise commodity target prices by 1 percent in fiscal 1991 and allow for additional increases in 1992-95 if inflation exceeds 4 percent a year.The plan would create a marketing loan for wheat, feedgrains and soybeans. It also would eliminate spending caps on the export bonus program. But it departs from the "normal crop acreage" approach to planting flexibility, and instead limits annual shifts in program crop production to 25 percent of a farm base.

Sen. Kent Conrad, D-N.D., said the Democratic proposal meets proposed budget guidelines for fiscal 1991 farm spending, and committee sources said it would remain within guidelines for the course of the five-year farm bill.

The main intent of the legislation is to protect farmers against future inflation, the sources said.

Republicans were caught off-guard by the proposal Wednesday morning, when details of the Democrat's plan appeared in the Washington Post.

Ranking committee Republican Richard Lugar at a Senate hearing was critical of the Democrat's plan, and said he would oppose any increase in target prices.

But Democratic sources said the plan was never intended as a the Senate committee's final document, and remains open to negotiation.

The plan starts by immediately raising target prices by 1 percent in 1991 crop year. In later years, the target prices would rise with the inflation rate, minus 4 percentage points. If inflation rises by less than 4 percent, there would be no increase in the target price, committee sources said.

The plan also would repeal the so-called Findley amendment, which allows the Agriculture Department secretary to reduce commodity formula loan rates by up to 20 percent to maintain U.S. export market competitiveness.

Loan rates would continue to be set by current formulas, which for wheat and feedgrains is 75-85 of the five-year average market price, but the USDA secretary would not have additional authority to lower them.

In place of the Findley amendment, the Democrats' plan would establish a marketing loan for wheat and feedgrains to maintain export market competitiveness. The proposal - which sources said would allow producers to repay their loans at the lower of the original loan rate or the posted county price - is the first to extend a marketing loan to wheat and feedgrains.

The plan also creates a marketing loan for soybeans with an initial loan rate of $5.60 per bushel in 1991. Actually, the "statutory" loan rate would be set at $6.25, but the USDA secretary would have authority to reduce that rate by some percentage each year.