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Published June 21, 2012, 08:58 AM

Senate weighs farm bill overhauling ag programs

WASHINGTON - The farm bill under debate in the Senate would be the nation’s first major overhaul of federal agriculture programs in decades, including an end to the policy of paying farmers whether they grow crops or not.

By: Ron Nixon, Associated Press

WASHINGTON - The farm bill under debate in the Senate would be the nation’s first major overhaul of federal agriculture programs in decades, including an end to the policy of paying farmers whether they grow crops or not.

By eliminating such payments to farmers and farmland owners the Senate bill would make the highly subsidized crop insurance program the primary safety net when crop prices drop. Currently, the government subsidizes about 62 percent of the crop insurance premiums, and the policies typically guarantee 75-85 percent of a farmer’s revenue.

The bill creates programs to protect farmers from additional revenue losses and to cover their insurance deductibles.

The House has not produced its own farm bill, and any proposed legislation could face resistance from fiscal conservatives and lawmakers aligned with the Tea Party who want greater cuts in farm programs and food stamps. The House was expected to begin work on its own bill next week, but the majority whip, Rep. Eric Cantor, R-Va., asked the House Agriculture Committee on Wednesday to delay work on the bill until July 11.

The Senate legislation also would add more money for programs for specialty crop growers, like farmers who grow fruits and vegetables. Produce growers have traditionally received few subsidies from the federal government. The proposed farm bill would expand block grants to states for research and promotion of fruits and vegetables.

"This is a strong farm bill for specialty crops," said Robert Guenther, senior vice president for public policy at the United Fresh Produce Association, a trade group of fruit and vegetable growers.

The Senate legislation also would repeal a longstanding provision in the farm bill that prevents farmers who get direct payments for growing commodity crops like wheat and corn from growing fruits and vegetables. The restrictions would be lifted because growers of commodity crops would lose their direct payments.

Farmers in the Midwest who have long complained about the planting restrictions say they are also glad to see them end.

One farmer, Jack Hedin of Rushford, Minn., was forced to pay $9,000 in fines in 2008 after planting watermelons, tomatoes and vegetables on 25 acres of land that he rented from a farmer who got direct payments.

Hedin said the ending of direct payments and the planting restrictions was long overdue.

"It’s a good thing for the fruit and vegetables growers like myself who are in the Corn Belt, where everyone gets direct payments and farmers who wanted to grow produce have limited access to land because of the restrictions," he said.

The spending cuts in the Senate bill, which amounts to $23 billion, come largely from the elimination of direct payments, which cost about $5 billion a year, and cutting about $4.5 billion from the food stamp program.

A vote by the full Senate is expected Thursday afternoon, said the majority leader, Sen. Harry Reid, D-Nev.

Southern farmers, especially peanut growers, have opposed the bill because it ends direct payments. The farmers argue that crop insurance would not provide an adequate safety net for them.

A number of budget watchdog and environment groups have also opposed the Senate legislation. A major point of contention has been the crop insurance program, which cost about $7.3 billion last year, up from $951 million in 2000, or about $1.2 billion adjusted for inflation. A Congressional Budget Office report said the program could cost about $90 billion over the next 10 years.

Unlike its other farm programs, the government does not impose income caps or payment limits on crop insurance subsidies. But Wednesday evening the Senate voted 66-33 to cap payments in the crop insurance program for farmers reporting $750,000 or more in annual adjusted gross income. Another amendment added soil and water conservation requirements to the crop insurance program.

A recent report by the Environmental Working Group, a Washington research group, found that 26 farm operations got more than $1 million in crop insurance subsidies last year. An amendment by Sen. Kirsten Gillibrand, D-N.Y., that would have restored cuts to the food stamp program by cutting subsidies to companies that sell crop insurance was defeated.

Steve Ellis, the vice president of Taxpayers for Common Sense, a budget watchdog group, said the Senate bill failed to achieve real savings.

Ellis said that the bill plows savings from the cuts into two new programs for farmers and that despite the cuts, the new farm bill would cost 60 percent more than the last bill passed in 2008, which is expected to run more than $600 billion over 10 years.

"With farm country doing as well as it is and farm income at record highs, the Senate missed an opportunity to pass a bill with real reform," Ellis said.

Copyright 2012 New York Times News Service

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