Senate ag panel approves farm bill
By Larry Dreiling
The Senate Agriculture Committee has approved its version of a five-year farm bill that would cut spending while also creating new subsidies for farmers.
The legislation approved 15 to 5 by the panel May 14 includes concessions to Southern rice and peanut farmers, thanks to the new top Republican on the committee, Sen. Thad Cochran of Mississippi.
The bill eliminates $5 billion in direct payments important to Southern farmers but makes it easier for them to receive alternate subsidies if prices dip.
The Senate bill calls for a total of roughly $2.4 billion a year in cuts. Those cuts include more than $600 million in yearly savings from across-the-board cuts that took effect this year.
Much of the savings in the bill comes from eliminating the direct payments, which aren’t tied to production or crop prices. Part of that savings would go toward deficit reduction, but the rest of the money would create new programs and raise subsidies for some crops while business is booming in the agricultural sector.
Sen. Pat Roberts, R-KS, the top Republican on the committee in the last session of Congress, criticized the higher subsidies for Southern farmers, which are essentially a lower threshold for rice and peanut subsidies to kick in. Roberts voted against the legislation along with fellow Republicans Mitch McConnell of Kentucky, Mike Johanns of Nebraska and John Thune of South Dakota.
“This is on a Southern railroad track,” Roberts said.
Sen. Kirsten Gillibrand, D-NY, also voted against the bill, citing cuts to food assistance programs.
Citing the change in ranking members, Roberts said the Southern rice and peanut producing orientation of the bill caused 20 years of market-oriented farm legislation back to a scheme in which farmers are now guaranteed their profits that are average or above average.
“I simply don’t know how to justify a program that pays producers more than the cost of production and essentially becomes nothing more than another income transfer program, not a risk management tool,” Roberts said.
The new Adverse Market Payment program under the new Senate farm bill, Roberts said, not only will add target prices to Southern crops, but to corn, soybean, wheat and sorghum crops as well.
“We’ll go back to farming for the program instead of for the market,” Roberts said. “That’s 4.4 million acres or more than have gone to other crops instead of being in wheat. If that target price goes to $5.50 or $6 in the third year of a drought into the AMP, you’ll have farmers farming for the program instead of going their own way.”
Roberts estimated this would increase the cost of the bill by $1.5 billion. Under the House bill, authored by Chairman Frank Lucas, R-OK, target prices for rice and peanut farmers could kick in even sooner.
“Who else gets payments above the cost of production? Surely not the wheat guys, or the corn guys, or the soybean guys,” Roberts said. “You can hear the cattlemen saying, ‘Where’s our target price?’
“There’s a real danger here the WTO will put this new program in the amber box and it will go red pretty quick (indicating the negative trade status the program would be considered) once the House sets an even higher target price. We simply don’t have the votes to change it.
“At least in my proposal, we cut $31 billion and don’t hurt anyone’s food stamps.”
Roberts also blasted the 5 percent yield threshold and actual production total cuts for crop insurance from 70 percent to 65 percent, amounting to $1.2 billion in reductions, as well as a further link to conservation compliance for eligibility to payments.
“That’s just more paperwork,” Roberts said.
Sen. Mike Johanns, R-NE, who served as Secretary of Agriculture in the George W. Bush administration, was critical of the entire bill, arguing that the bill was more generous than Nebraska farmers had asked for and that the added help for the Southern farmers could endanger the bill on the Senate floor. The Senate easily passed a farm bill last year that did not include those higher subsidies.
Johanns also said the bill has fewer cuts than advertised because the across-the-board cuts have already taken effect. He called many of the cuts an “illusion.”
“It’s no way to deal with budget problems,” he said.
Sen. Debbie Stabenow, D-MI, chairwoman of the Senate Agriculture Committee, said all of the changes are meant to make farm programs more efficient.
“Instead of subsidies that pay out every year even in good times, the bill creates risk management tools that support farmers when they are negatively impacted by weather disaster or market events beyond their control,” she said.
“Reforming agriculture programs will save taxpayers billions of dollars while helping farmers, ranchers and small businesses create American jobs,” Stabenow added. “Because the Agriculture Committee worked across party lines to streamline programs, we were able to save tax dollars while investing in initiatives that help boost exports, help family farmers sell locally and spur innovations in new bio-manufacturing and bio-energy industries.”
Stabenow continued, “We look forward to continuing to work with our colleagues in a bipartisan way to enact a farm bill this year before the current extension expires. Agriculture supports 16 million jobs in this country, and it’s absolutely critical to provide farmers the certainty they need to plan and grow by passing a farm bill this year.”
In order to create savings, the Senate bill would cut $400 million out of almost $80 billion spent annually on food stamps, now known as the Supplemental Nutrition Assistance Program, or SNAP. The committee rejected amendments by Johanns and Thune to expand the cut.
The House bill would cut five times as much domestic food aid as the Senate bill in an effort to appease conservatives in that chamber. That bill would cut $2 billion annually from the program and rewrite policy that allows some people who already receive benefits to automatically receive food stamps.
Balancing the cutbacks important to conservatives with maintaining the generous safety net that farmers have relied on for decades will be key to getting the bill passed before current farm programs expire Sept. 30.
This is the third year in a row that farm-state lawmakers have tried to push the bill through. Though it passed the Senate, the House declined to take up the bill last year after conservatives in that chamber objected to the bill’s cost and insisted on higher cuts to food stamps.
In 2011, Stabenow and Lucas attempted to include the bill as part of the congressional super committee’s effort to come up with a long-term deficit reduction plan. When that effort failed, farm bill action stalled until the next year.
House leaders have given supporters more optimism this year, as they have said they plan to put the measure on the floor this summer.
Longtime critics of farm policy say that even with the belt-tightening, the legislation is still a giveaway to the largest farms that tend to receive the largest shares of the subsidies.
Farm groups defend the policy by using last year’s drought as an example. Despite widespread losses, federally subsidized crop insurance helped farmers recover.
Mary Claire Jalonick of The Associated Press contributed to this report.
Larry Dreiling can be reached by phone at 785-628-1117, or by email at email@example.com.