House, Senate Pass Drought Aid Bill

WASHINGTON--Both houses of Congress overwhelmingly approved some $6 billion in aid for drought-stricken farmers yesterday after scaling back provisions for special assistance to milk producers and ethanol fuel makers.

"Hold on--help is coming in a sensible, rational compassionate way," Agriculture Committee Chairman E. "Kika" de la Garza (D-Tex.) said as the House gave 368-29 approval to its version of the bill.

Within hours, the Senate approved 94-0 a similar bill, but only after peppering it with scores of complex changes that may not be untangled before a House-Senate conference committee next week, at which lawmakers plan to fashion the final version.

Congressional leaders aim to send the final product to President Reagan's desk by August 11.

The House had come under fire over a provision that would have increased on October 1 the price-support level for milk to $11.10 for each 100 pounds. It would raise consumer costs by a few cents a gallon at most and cost the government $145 million by congressional estimate. The Agriculture Department put the price tag at $300 million.

Both the House and Senate versions would cancel a 50-cent price-support cut set for January 1 and the plan to actually increase the level was denounced by Agriculture Secretary Richard E. Lyng as well as an array of business and farm groups that often are allies of the dairy industry on such matters.

"This is a most dangerous and wrongheaded precedent," said Rep. Pat Roberts (R-Kan.). He scoffed at claims that dairy producers need the price increase to offset the increased cost of feed resulting from the drought, saying cattle and sheep ranchers and poultry producers are not getting anything similar in the way of a subsidy.

The House moved to deflect criticism, adopting a compromise version sponsored by Reps. Steve Gunderson (R-Wis.) and Tim Penny (D-Minn.). It would go ahead with the increase but only for April through June next year. Supporters said it would knock $30 million off the price tag.

In the Senate, Sen. Tom Daschle (D-S.D.) scaled back his plan to allow U.S. ethanol fuel makers to buy up to 2 million bushels each every month of government surplus corn. Ethanol is a fuel based partly on alcohol produced from corn and other commodities.

Under Daschle's plan, ethanol makers would be able to purchase the corn at 110 percent of the government's acquisition price. Much of the corn in Agriculture Department bins now was acquired long before the drought sent crop prices skyrocketing.

The South Dakotan said he designed the provision to help small ethanol makers, but it could represent a substantial benefit for the the Archer Daniels Midland Co., the large Decatur, Illinois corn processing company that makes the lion's share of U.S. ethanol.

In any case, Daschle won voice vote approval of an alteration that would terminate the program next September I and limit the total use of corn in the program to 16 million bushels a month.

Basic provisions of the bill would provide payments to drought-stricken farmers equal to 65 percent of their lost earnings above 35 percent of anticipated harvest. They also would expand and streamline government feed programs for dairy and livestock producers.