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Wall St. licking its chops over farm bill

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KAI RYSSDAL: Congress gave itself some Farm Bill breathing room today. They’ll have another week to agree to disagree over food stamps, nutrition programs and subsidies for farmers. The bill already runs $280 billion for five years. Which means a little something for everyone. Including some you might not have thought of.

From Washington, Jeremy Hobson reports.

JEREMY HOBSON: You can’t get much farther away from farms than Wall Street. But Sallie James at the CATO Institute says it shouldn’t be surprising that Wall Street investors are licking their chops over the Farm Bill.

Sallie James: Farming is not what it used to be. It is no longer just a family farm environment. It’s big companies. It’s much larger farms, run on a much more commercial cut-throat basis.

For one thing, she says, commodities have become a much more attractive investment as demand has soared. And the subsidies Congress is handing out are making those commodities even more lucrative. Plus, they’re making farmers richer. And analysts say that means they’ll buy more equipment, fertilizer, and seeds. So Wall Street is eyeing investments in agribusiness, machinery, and biofuels.

And Sallie James says there’s more to the farm bill than subsidies.

JAMES: The provisions they’re putting in the farm bill this time in order to get support for it from the Senate are tax provisions that might be of interest to investors.

One proposal would create a new tax deduction for timber companies. The Wall Street Journal reports that could save paper maker Weyerhauser $100 million a year. And the bottom line is, whatever gets in the bill is likely to pass because of the Christmas tree of goodies for members right and left.

JAMES: There’s a fairly strong bipartisan support behind this bill which makes it a little bit different from some others.

President Bush says he’s ready to veto the bill, without some significant spending cuts. But some here are already starting to doubt that pledge.

In Washington, I’m Jeremy Hobson for Marketplace.

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