WASHINGTON (AP) -- The Senate has begun laying the
groundwork on a massive farm bill that would cut spending
while also creating new subsidies for farmers.
The legislation the Senate Agriculture
Committee is considering Tuesday makes concessions to
Southern rice and peanut farmers, thanks to a new top
Republican on the committee, Mississippi Sen. Thad Cochran.
The bill eliminates $5 billion in annual subsidies called
direct payments that are important to those 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, while a House version to be
considered Wednesday would save $4 billion out of about $100
billion annually. 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 House and Senate
bills 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
Republican Sen. Pat Roberts of Kansas, 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 said the new policy
could guarantee that those farmers profits are average or
"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.
Under the House bill, authored by Rep. Frank
Lucas, R-Okla., those subsidies for rice and peanut farmers
could kick in even sooner. These "target price" programs
allow farmers to receive subsidies if prices fall below a
The bill includes generous protections for
other crops as well. Both bills would boost federally
subsidized crop insurance and create a new program that
covers smaller losses on planted crops before crop insurance
kicks in, favoring Midwestern corn and soybean farmers who
use crop insurance most often.
Sen. Debbie Stabenow, D-Mich., 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
House and Senate bills are further apart on
domestic food aid. 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. In an effort to appease conservatives, the House 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.
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. 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 which tend to receive the
largest shares of the subsidies.
"It's very disappointing in a time of runaway
deficits and record farm income," says Scott Faber of the
Environmental Working Group.
Farm groups defend the policy by using last
year's drought as an example. Despite widespread losses,
federally subsidized crop insurance helped farmers recover.