DATE=5-7-02

TYPE=CORRESPONDENT REPORT

TITLE=CONGRESS FARM BILL (L ONLY)

NUMBER=2-289596

BYLINE=DEBORAH TATE

DATELINE=CAPITOL HILL

CONTENT=

VOICED AT:

INTRO: The U-S Senate following the lead of the House has given final approval (by a 64 to 35 vote) to a farm bill and sent it to President Bush for his expected signature. The measure includes large subsidies to American farmers a provision criticized by U-S trading partners as running counter to the U-S commitment to free trade. Correspondent Deborah Tate reports from Capitol Hill.

TEXT: The legislation replaces a 1996 law that was intended to make farmers less dependent on government aid.

Support for that law declined after commodity prices fell in 1998 and Congress responded with a series of annual bailouts of the farm economy.

The legislation passed Wednesday offers increased subsidies to grain and cotton farmers, revives subsidies for wool and honey, and provides new payments for milk, peanuts, lentils and dry peas.

It is expected to cost more than 170 billion dollars over the next decade.

The bill's increased subsidies anger foreign competitors. The European Union says it may challenge the subsidies before the World Trade Organization.

Senate opponents, including Republican Senator Fred Thompson of Tennessee, are worried about the legislation's impact on trade.

/// THOMPSON ACTUALITY ///

This farm bill will likely cause us to violate our W-T-O commitments at precisely the time when we are trying to convince other countries to open their markets to our agricultural products.

/// END ACT ///

But supporters, including Democrat Kent Conrad of North Dakota, dismiss such concerns.

/// CONRAD ACTUALITY ///

The Europeans are our chief competitors, provide much higher levels of support for their producers than we do to ours. This begins to level the playing field.

/// END ACT ///

Passage of the measure comes just months before crucial mid-term congressional elections when Republican and Democrats will battle for control of the House and Senate. The bill would pump billions of dollars in subsidies into many midwestern and southern states that are likely to have close races this November.

Although President Bush has voiced concerns about the bill, he has said he would sign it.

Mr. Bush will need to retain the solid support he received in 2000 in the midwest and south if he seeks re-election in 2004. (signed)

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