The 2002 farm bill is set to expire in September 2007, and Centre County -- with its 1,215 farms -- has the chance of being greatly affected.

Farms in this area sold agricultural products, such as dairy and produce, valued at more than $61.3 million in 2004, according to Pennsylvania Agriculture statistics.

Norman Lathbury, staff member of the Centre County Agricultural Land Preservation Board, said he wants to see the government "help make payments to farmers more equitable" and to close loopholes in the payment system.

"We are concerned about the impact on small farmers, because a majority of Centre County farms are smaller," he said. "We want [farmers] to benefit and to help new farmers with things like low interest loans."

David Blandford, professor of agricultural economics at Penn State, said that crop prices have recently been high and this might affect the 2007 farm bill.

"There is anticipation that Congress will be spending a lot less money on the bill," he said.

In April, the Congressional Budget Office projected that the baseline funding available for agriculture spending for the 2007 farm bill will be about $57 billion less than the amount allocated for the 2002 farm bill, according to the American Farm Bureau. This is because of high crop prices.

However, Blandford said that high crop prices do not always mean farms are doing well.

"If [crop] prices fall, farmers can get assistance from the government," he said. He added that more emphasis should be put on revenues -- the amount of money farmers make -- instead of the price of crops because revenues are more telling of how much farms are actually producing and selling.

"I think farmers may want the government to adopt a system based on revenues and not prices," he said. "Lower production leads to lower revenues.

The government may want to look at a revenue stabilization system rather than supporting crop prices."

Lathbury said that this type of counter-cyclical program is funded based on the actual market conditions. Dairy farmers in Centre County are trying to adopt this type of program.

Dairy farms are very prevalent in Pennsylvania, especially Centre County, he said. Fifty-six percent of Centre County's agricultural products came from the sale of dairy products, according to Pennsylvania Agriculture statistics.

Kenneth Bailey, professor of agriculture economics at Penn State, said counter-cyclical payments and having a safety net are important to Centre County dairy farmers.

"The government's current formulas that set the prices of milk aren't really working," he said. "There are dis-incentives in the programs they have set up."

The United States Department of Agriculture is not currently doing a good job at considering what products are worth, Bailey said.

"I think farmers want the system to be more market-oriented and more logical," he said.

Taxes on certain products are counter-productive and manufactures are being told to sell milk for the lowest prices, Bailey said.

"Farmers are worried about the bottom line and determining what products are worth affects what they are paid," he said.

Lathbury said other important aspects of the bill could involve "the milk marketing board implementing better planning for dairy products to get more equitable prices."

Blandford said the Pennsylvania governor and the secretary of agriculture have made proposals about changing the dairy program because the current structure is "not efficient."

He added that dairy farming, a huge industry in Pennsylvania, will be impacted by increased ethanol demand.

"Pennsylvania is not a huge corn producer, but corn is used at cow farms," he said. He added that this means farmers will be spending more for animal feed.

Bailey noted that corn is used for feed at dairy farms and that the focus on ethanol will have an impact on the industry.

"Feed is half the cost of production," he said. "If the price of corn is high, it affects the dairy farms. It means consumers may pay more for milk."

Lathbury said if farmers are able to diversify their crops, they will have something to fall back on if one crop doesn't do well in a season.

"Some soils and regions are better for certain types of farming and that is also important to take into consideration," he said.

Lathbury also added that crop prices rely on the commodity.

"This year corn and soybeans have been doing well because they are being used for alternate energies," Lathbury said. "Hay has also done well, but it's very hard to predict what crops are going to do well each year."

Lathbury said energy from ethanol or corn oil is a new concern and could provide areas for growth in the state.

"There is over $500 million dollars being put toward research for bio energy and renewable energy," he said.

Lathbury said Pennsylvania has already started producing bio energy.

"Pennsylvania already has a few ethanol plants," he said. "These plants provide farmers opportunities to grow cellulosing products that can be used to help create energy."

Even though the next farm bill may not include as much money, in April, the Senate passed a fiscal year 2008 Budget Resolution that creates a $15-billion reserve fund to provide more spending on farm programs.

"The base-line for expenditures will come down and the government does not spend as much money for crop prices. This money can be set aside for conservation and research development," Blandford said.

He added that there is no money set aside yet and that Congress would need to find money from another source in order to support agriculture.

Blandford said the price of dairy products could go up and down dramatically. "With a price support program, when milk prices go low, the government buys products," he said. "There is more pressure when feed prices are high. It is a hard situation to fix."