Washington (Platts)--29Apr2008

A US Senate and House of Representatives conference on the farm bill was
suspended again Tuesday after the US Department of Agriculture Secretary said
President Bush likely would veto the most conferee's recent agreement because
of controversial provisions that are not related to energy.

Agriculture Secretary Ed Schafer was quoted in news reports as saying
that Bush would veto the measure because it is too costly and he disagrees
with some of its provisions.

Congressional estimates say the measure would cost $10 billion more than
the $280 billion "baseline" agreed to last year.

At his press conference Tuesday morning, Bush called the most recent farm
bill agreement "massive" and "bloated" and asked House and Senate negotiators
to instead pass "a fiscally responsible bill that treats our farmers fairly,
and does not impose new burdens on American taxpayers."

Schafer spent an hour and a half behind closed doors with key farm bill
negotiators on Tuesday, discussing elements that the administration
would need to see in a final farm bill in order not to veto it.

Charles Grassley of Iowa, the top Republican on the Senate Agriculture
Committee, said in his weekly call with reporters that most of these elements
had not yet been finalized.

A House Agriculture aide said formal discussions likely would resume
after a new agreement was hatched that is "as close as possible to
acceptable to everyone," including the White House.

The most recent short-term extension of the 2002 farm law is set to
expire Friday and the White House last week called for Congress to abandon
efforts to enact a new law and just extend the old one for a year or longer.
The president, however, did not renew this call in Tuesday's remarks.

The Senate measure's tax package has been a major point of contention
throughout the negotiations, but the current controversy is centered on farm
subsidies. House and Senate negotiators agreed to cut the tax package down to
$1.5 billion last week, from $2.4 billion previously.

The House aide said that the bill's $1.2-billion energy title was not
particularly controversial and therefore unlikely to see many changes.

--Jean Chemnick, jean_chemnick@platts.com