Under the proposal which received unanimous approval from senators last night, farmers would have the option to receive 1999 market transition payments along with their 1998 payments this fall. Grassley successfully sought consideration of the bill before the August recess which begins today for the Senate. The U.S. House of Representatives is expected to consider the same measure on Monday.
"This bill is a way to respond immediately to the very serious concerns that farmers have with low commodity prices without sacrificing the benefits of the farm bill, including the flexibility they have to plant whatever they want and the certainty of the federal government's commitment through the transition payments," Grassley said.
Grassley said that if this bill is signed by the President, the total payment that would be received this year by Iowa corn farmers would be approximately $ .71 per bushel. Already since 1996, Iowa farmers have received $1.2 billion in farm payments from the federal government, the most in the nation. Grassley said the plan being advanced is "budget neutral" because Congress already has planned to provide the funds as part of the freedom to farm bill passed in 1996.
The bill ? the Emergency Farm Financial Relief Act ? was introduced last week to help ease the burden on farmers faced with low commodity and livestock prices.
In addition, farm state senators yesterday introduced the Family Investment and Rural Savings Tax Act of 1998 (FIRST). "This bill includes many of the key initiatives we promised farmers along with freedom to farm. They are important tools to help farmers make the best short and long-term decisions for their own operations," Grassley said.
The FIRST bill includes the bi-partisan Farm and Ranch Risk Management Act (FARRM)introduced by Grassley in May. The farmer savings accounts bill would let eligible farmers make contributions to tax-deferred savings accounts to help farmers prepare for fluctuations in the farm economy. The contributions would be limited to 20 percent of a farmer's taxable income for the year. Funds could stay in the accounts for up to five years. The FIRST bill also includes the Lott-Gingrich Economic Growth Act of 1998. This item would reduce the top individual capital gains tax rate from 20 percent to 15 percent, and it would reduce the capital gains tax rate for individuals with lower incomes from 10 percent to 7.5 percent.
Finally, FIRST would permanently restore income averaging for farmers. It would let farmers average their income over three years. Grassley said income averaging is especially important right now when farmers' income is down because it also reduces their tax burden.
Grassley is a member of the Senate Agriculture and Finance committees.