Farm Bill Finally Ready
Published May 7, 2008
WASHINGTON -- Expressing relief, lawmakers announced Thursday they had finally reached accord on a near $300 billion farm bill and would bring the long-delayed legislation to the House and Senate floors next week. It remains to be seen whether the bill will pass muster with the White House.
President Bush has said he would veto any bill that doesn’t do enough to curb subsidy payments to already wealthy individuals. He specifically wanted an income cap of $200,000 for payments originally meant to offer farmers a safety net to withstand hard times.
Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, said the bill “should pass with large margins in both houses. In addition, I think the bill goes much more than halfway to accommodate the president’s wishes.” But White House budget director Jim Nussle said the president remained opposed to the compromise bill, the AP said.
In their agreement, members of a House-Senate conference committee did set new limits on subsidy payments, but did not go as far as the president requested.
Under the revised bill, no payments would go to those whose non-farm income is greater than $500,000. Also, automatic direct payments, which farmers receive regardless of market prices, would no longer go to farmers whose farm income is greater than $750,000 dollars.
Previously, income caps were set at $2.5 million for non-farm income, and there was no cap on farm income.
The farm bill is a $285 billion, 5-year piece of legislation that includes funding for areas as diverse as farming, conservation, energy, food stamps and school lunches.
It has been lambasted by critics who say it does not do enough to reform outdated, bloated payments to farmers who are enjoying record-high corn prices, or to address the global food crisis.
Expecting more such criticism, the House-Senate conferees said they did more with less money compared with the last farm bill, and emphasized that they worked together to ensure that the bill satisfied all interested parties.
“Those who say there is not reform here have not read this bill,” said Sen. Kent Conrad, D.-N.D., chairman of the Budget Committee.
Other reforms include a $300 million reduction in direct payments to farmers, and a 6-cent decrease in an ethanol blending tax credit that supports corn ethanol producers. That will amount to a $1.2 billion decrease in spending, according to Conrad.
The vast majority of spending in the bill, more than 70 percent, goes to nutrition programs, including food stamp support and money for school lunches. About one-third goes to subsidies in the form of direct payments to growers, crop insurance and conservation programs.
Critics were quick to condemn the proposed bill for not going far enough with reforms.
“It’s a paltry amount in the grand scheme of things. It’s insufficient,” said Sandy Schubert, director of government affairs at the Environmental Working Group, a public health and environment advocacy group in Washington.
Schubert said subsidies shouldn’t be cut altogether, but should be distributed more fairly.
According to the Environmental Working Group, the top 10 percent of recipients of direct payments received 60 percent of all the government money from 2003 to 2005.
“We’re in a recession, people are having trouble paying their bills,” Schubert said, and yet the payments are still going to individuals who have millions of dollars. “That’s offensive.”
Even lawmakers could not come up with a reason why direct payments – unrelated to income -- were still included in a compromise that reconciled earlier versions of farm legislation approved separately by the House and Senate.
“These direct payments that came about in the ’96 bill…they are what we have, they are what are politically supported at this point, but I don’t believe in this system,” said Collin Peterson, D-Minn., chairman of the House Agriculture Committee.
The USDA forecasts a record net farm income for 2008 of $92.3 billion, up 4 percent from last year and 51 percent above the 10-year average of $61.1 billion.
But farmer advocate groups said American farmers are far from raking in piles of cash.
“Yes, prices are high, but just because a price is posted on a futures board in Chicago doesn’t mean that‘s the price farmers are getting,” said Tara Smith, lobbyist for the American Farm Bureau Federation.
Markets shift constantly, Smith said, and the farm bill will be in effect for five years. A cut in direct payments could leave farmers stranded if prices plummet in a few years.
Farmers are also hit especially hard by fuel and fertilizer prices, which they have to pay to keep their farms operating, Smith said. While most Americans are struggling with high fuel costs, “multiply that by a hundred, that’s what a farmer is dealing with,” she said.
“This whole notion that folks seem to have that farmers are rolling in the clover is a little off,” Smith said.
