Farm Bill: Senate Overview
Ron Nixon reported in today’s New York Times that, “The Senate approved a sweeping new farm bill on Thursday that would cost nearly $1 trillion over the next 10 years, financing dozens of price support and crop insurance programs for farmers and food assistance for low-income families.
“The bill passed with overwhelming bipartisan support, 64 to 35. It now goes to the House, where it faces a much tougher road because conservative lawmakers want to make deeper cuts in the food stamp program, which serves about 45 million Americans. ‘This bill represents significant reform,’ said Senator Debbie Stabenow, Democrat of Michigan and chairwoman of the Senate Agriculture Committee. ‘It cuts subsidies, it cuts the deficit and it creates jobs.’
“Senator Pat Roberts, Republican of Kansas and the ranking member on the committee, called the legislation the best bill possible. ‘It shows what can happen if we break the logjam of partisanship and work together to get something done,’ Mr. Roberts said.”
Mr. Nixon indicated that, “In the House, the chairman of the Agriculture Committee, Representative Frank D. Lucas, Republican of Oklahoma, said work on the bill would begin on July 11. He said committee members would work on a spending bill next week. Congress will recess for the July 4 holiday week.
“‘Although there will be differences between the Senate approach and our own, I hope my colleagues are encouraged by this success when we meet on the 11th to consider our own legislation,’ Mr. Lucas said.”
Today’s article added that, “But for the first time crop insurance would be subject to payment limits, and recipients of the subsidy would have to follow soil and water conservation requirements, as they do in other farm programs. The bill reduces the premium subsidy for farmers with adjusted gross incomes of more than $750,000. The measure would affect only 1,500 out of the 1.5 million farmers and save $1 billion over 10 years.”
James Politi reported yesterday at the Financial Times Online that, “In a rare burst of bipartisanship, the Senate approved its version of a five-year farm bill, a $1tn piece of legislation that defines the relationship between the US government and agriculture.
“In some ways, this year’s effort marks the end of an era. Amid mounting pressure to cut support for one sector of the economy that has been booming in recent years, lawmakers eliminated a controversial scheme worth $5bn in direct payments to farmers – regardless of whether they planted crop or not – that became a poster child for excessive spending.
“In addition, Republicans and Democrats endorsed further reductions to agricultural commodity subsidy, conservation and food stamp expenditures – including limits on help for wealthy farmers – for a total of $23bn in savings for the US government over the next decade.”
The FT article noted that, “And while direct payments are considered the most blatant form of subsidy, this also makes it the most transparent, placing it in the WTO’s ‘green box’ of permitted support plans. However, the new crop insurance scheme could be placed in the WTO’s ‘amber box’ of trade-distorting subsidies subject to certain limits, analysts say.”
“Brazil is among the countries that will be watching closely how the bill moves through the House, since it has been mired in a longstanding dispute with the US over America’s cotton subsidies.
“‘The hope is that there have been enough changes to the cotton programme that the Brazilians will be OK with it,’ says Mary Kay Thatcher, senior director of congressional relations at the American Farm Bureau.”
A related AFP article from yesterday reported that, “African countries that have protested US cotton subsidies for years criticized Wednesday the so-called ‘Farm Bill’ making its way through Congress, saying it would keep that support under a new guise.”
Mary Kay Thatcher was also a guest on yesterday’s AgriTalk radio program with Mike Adams; a portion of her remarks from yesterday regarding Farm Bill timing and House prospects can be heard here (MP3- 3:40).
Damian Paletta and Janet Hook reported in today’s Wall Street Journal that, “House Agriculture Committee Chairman Frank Lucas (R., Okla.) said the farm bill he plans to offer will have ‘differences’ from the Senate version but lauded lawmakers for striking a bipartisan deal. His panel plans to begin voting on its version July 11.”
“Without new legislation, farm policy would automatically revert to some laws passed in the 1930s and ’40s, potentially leading to a confusing system for compensating farmers for growing certain crops and upending some government-loan programs. Sen. Pat Roberts (R., Kan.), a chief architect of the bill, called the prospect of reverting to past policies ‘ridiculous.’”
The Journal writers added that, “‘If this bill were to become law without significant changes, producers in the Southeast would be left without an effective safety net,’ Sen. Saxby Chambliss (R., Ga.) said Thursday. Southern rice growers have said the crop-insurance program is ill-suited for them, in part because they irrigate and see relatively little fluctuation in yields each year.”
Arkansas Democrat Senator Mark Pryor indicated in an a radio interview yesterday morning on KASU that he would be voting against the Senate Farm Bill due to “the way rice is treated.” (Interview excerpt available here, (MP3- 5:00)).
Meredith Shiner reported yesterday at Roll Call Online that, “Despite the Senate’s bipartisan support, however, it is unclear whether the package will garner enough support in the House.”
“The underlying bill, a labor of love between Senate Agriculture Chairwoman Debbie Stabenow (D-Mich.) and ranking member Pat Roberts (R-Kan.), represents one of the most significant reforms of the farm subsidy system in decades,” the Roll Call article said.
David Rogers reported yesterday at Politico that, “Amid all the acrimony of this year, the bill is foremost a personal triumph for the partnership forged between Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) and the panel’s ranking Republican, Kansas Sen. Pat Roberts.
“On the surface they make an odd couple: she, the newcomer, always upbeat and confident, and he the more cantankerous veteran of decades of farm battles. But defying doubters, they forged an agreement this week allowing scores of amendments and brought the bill across the floor largely intact.”
Mr. Rogers pointed out that, “As if to underscore the stakes, senators used the bill to add new demands Thursday calling on President Barack Obama and the Pentagon to be more forthcoming about the impact of the nearly $100 billion in across-the-board appropriations cuts.
“Defense Secretary Leon Panetta would have to produce a report detailing Pentagon cuts by Aug. 15, and Obama would have to release his own report on planned sequestration cuts within 60 days of enactment of the bill or Oct. 30, whichever is earlier.”
The Politico article noted that, “A preview of the House debate could come as early as next week, when a $19.4 billion agriculture appropriations bill is slated to come to the floor. And House Agriculture Committee Chairman Frank Lucas (R-Okla.) has set July 11 to begin the markup of his own farm bill.
“Lucas must tack left and right to get where he wants. To protect Southern farmers, the Oklahoma Republican is open to keeping some target price supports, a heavier government hand than some tea party Republicans may want. At the same time, Lucas is shooting for greater savings than the Senate, meaning he will have to cut more from food stamps, straining his bipartisan coalition with farm state Democrats.
“Thus far, he appears to have solid backing from his panel’s ranking Democrat, Minnesota Rep. Collin Peterson, who managed the 2008 bill when he was chairman. The bigger challenge may be getting the cooperation of his own House Republican leadership to schedule floor time when the bill comes out of committee next month.”
On the House Appropriations measure, in a Statement of Administration Policy released yesterday, the executive branch indicated that, “The Administration strongly opposes House passage of H.R. 5973, making appropriations for Agriculture, Rural Development, Food and Drug Administration, and Related Agencies programs for the fiscal year ending September 30, 2013.”
Meanwhile, Chris Clayton reported yesterday at DTN that, “The bill makes dramatic changes to the farm-program safety net. The lion’s share of net savings, $19.8 billion, comes from an overhaul of commodity programs that end direct payments, the counter-cyclical program and Average Crop Revenue Election program, or ACRE.
“The bill creates a new commodity program, the Agriculture Risk Coverage, or ARC, that has a $50,000 payment cap for an individual or a $100,000 cap on a married couple.
“Income eligibility for commodity programs would be lowered to a $750,000 adjusted gross income, which translates into a $1.5 million AGI for a married couple. The legislation also tightens language for ‘actively engaged’ in farming that would exclude people from collecting commodity payments merely because they are involved in some business phone conversations about the farm.”
Mr. Clayton explained that, “Besides ARC, the bill also creates the Supplemental Coverage Option, or SCO, that works like some insurance policies that trigger payments based on countywide production. USDA would pay 70% of the premium for an SCO policy. The policy would have a 10% deductible of expected revenue for farmers who choose not to participate in the Agricultural Risk Coverage program. For farmers enrolled in ARC, the deductible for the SCO insurance would be 21% as well.
“The SCO policies add $1 billion in cost to the farm bill over five years, jumping to $3 billion in additional costs for the 10-year budget projections.
“Cotton producers get an entirely new insurance program, the Stacked Income Protection for Cotton, or STAX. Under STAX, USDA would pay 80% of the premiums. The Congressional Budget Office estimates the program would cost $912 million through 2017, and would jump to $3.2 billion over 10 years.”
Reuters writer Charles Abbott reported yesterday that, “The House Agriculture Committee will not begin work on its bill until mid-July, just before a five-week recess. Analysts say it will be difficult for the House to act or for Congress to enact a farm bill before the 2008 law expires on Sept 30.
“Agriculture Committee leaders in the House and Senate disagree on fundamental points for the new farm law, ranging from how much to cut spending to how extensive reforms should be. The House wants much deeper cuts in food stamps and $10 billion more in cuts overall than the Senate and would offer higher price supports to farmers when the Senate would end them.”
Mr. Abbott noted that, “The House was scheduled to consider an agricultural funding bill next week that would deny farm subsidies to anyone with adjusted gross income above $250,000 a year, or one-third of the Senate’s ceiling, and that would cut overseas food aid sharply.
“Agriculture Secretary Tom Vilsack urged Congress to keep the farm bill moving forward.”
And the AP reported yesterday on Senate passage of the Farm Bill, noting that, “Senate Republican leader Mitch McConnell called it ‘one of the finest moments in the Senate in recent times in terms of how you pass a bill.’
“The bipartisanship seen in the Senate may be less evident in the House, where conservatives are certain to resist the bill’s costs, particularly for food stamps. Food stamp spending has doubled in the past five years, and beneficiaries have grown from by about 20 million to 46 million. The program’s budget is now about $80 billion a year, comprising 80 percent of the spending in the farm bill.”
Farm Bill: Amendments From Thursday
A list of Farm Bill Amendments the Senate considered yesterday is available here; while, Daniel Strauss reported yesterday at The Hill’s Floor Action Blog that, “The Senate voted down two competing farm bill amendments on the Environmental Protection Agency’s ability to conduct aerial surveillance on agriculture operations.”
“First, the chamber voted against an amendment by Sen. Barbara Boxer (D-Calif.) which would have allowed the EPA to perform aerial overflight inspection if it was more cost-effective than inspections that are on-the-ground and in-person. That amendment failed 47 to 48. It had a 60-vote threshold.
“Then the chamber voted on an amendment by Sen. Mike Johanns (R-Neb.), which would have prohibited the EPA from using aerial flight for any kind of surveillance. That amendment was defeated in a vote of 56-43. It also required 60 votes for passage.”
In a separate update yesterday, Mr. Strauss reported that, “The Senate decisively approved a farm bill amendment prohibiting the use of federal funds for party conventions.”
Farm Bill: Lawmaker Reaction- Representatives, and Senators
House Ag Committee Ranking Member Collin Peterson (D., Minn.)- “It is crucial that we finish the farm bill before the current bill expires in September. Waiting until the mess that will occur during the lame duck session will not only make it more difficult, but could also result in several unintended consequences. If the House Ag Committee passes a bipartisan bill in early July, House leadership will then have little choice but to bring the farm bill to the floor before the August recess. I’m continuing to work with Chairman Lucas and members of the Committee to make this happen.”
House Ag Committee Member Randy Neugebauer (R., Tex.)- “I appreciate the leadership from Senator Stabenow and Senator Roberts to move this legislation forward, and I’m pleased that my Supplemental Coverage Option (SCO) on crop insurance was included in their bill. When the House Agriculture Committee takes up its own version of the legislation in July, I anticipate some changes to what the Senate passed.”
Rep. John Garamendi (D., Calif.)- “As the largest producer of agricultural products in the country, California’s economy is especially dependent on passage of a Farm Bill. The Senate Farm Bill strengthens California’s ability to grow and sell its many ‘specialty crops,’ such as walnuts, almonds, and grapes. Programs such as the Market Access Program and Specialty Crop Block Grants will allow California’s farmers to remain competitive in the global market.”
Senate Ag Committee Ranking Member Pat Roberts (R., Kan.)- “Our work is not done. We can find more savings in farm programs, especially in nutrition spending. The House must act, and we must have something in place before current programs expire September 30.”
Sen. Mike Johanns (R., Neb.)- “I will continue to be involved as the farm bill advances through Congress and hopefully to the President’s desk for his signature very soon.”
Sen. Kent Conrad (D., N.D.)- “The Senator noted that the focus now turns to the House which has yet to mark up a bill in committee. To conclude a farm bill before the current one expires, it is critical for the House of Representatives to approve a bill and get both measures to conference committee. Senator Conrad will continue to fight in conference committee negotiations with the House to improve certain elements of the farm safety net to ensure North Dakota producers – especially wheat and barley producers – are treated fairly.”
Sen. Charles Grassley (R., Iowa)- “The payment limits I sponsored and got included in the bill install a hard cap on commodity program payments of any kind and close loopholes in the farm program that have allowed non-farmers to qualify for federal payments.”
Sen. John Thune (R., S.D.)- “Current crop insurance policy encourages the conversion of native sod and grassland to commodity crop production. During the Senate Agriculture Committee’s markup of the bill, a Thune amendment was accepted which will reduce the amount of crop insurance premium assistance for four years on crops grown on native sod and longstanding grasslands and reduce indemnity levels to match the productivity of the insured land, in order to discourage abuse and conversion of grasslands to cropland for crop insurance benefits. Thune’s amendment saves nearly $200 million over 10 years.”
Sen. Kirsten Gillibrand (D., N.Y.)- “I am deeply disappointed by the $4.5 billion in cuts to food assistance in this bill.”
Sen. Tom Carper (D., Del.)- “This landmark bill institutes a new crop insurance program, which gives farmers the security they need to keep farming and feeding America and the world but at a much lower cost to the American taxpayer. The legislation also focuses on nutrition, and on how we can encourage farmers to grow – and people to eat – more healthful foods as part of their daily diets. The bill also includes legislation – which Senator Stabenow and I introduced earlier this year – that would support the expansion of products made in this country from bio-based materials.”
Sen. Mike Crapo (R., Idaho)- “We have to reduce spending and budget deficits. Hopefully, we can reduce spending when this bill is in conference with one approved by the House of Representatives.”
And, Kansas GOP Senator Jerry Moran discussed issues associated with crop insurance and the Farm Bill on yesterday’s AgriTalk radio program with Mike Adams– a portion of this discussion can be heard here (MP3- 2:16).