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Subsidy Lobby Infighting Continues

Monday, May 21, 2012

David Rogers reports in Politico on moves by Senate Agriculture Chairwoman Debbie Stabenow (D-Mich.) to smooth over the animosities between regional commodity groups dueling over the committee’s farm bill. Some excerpts:

Having just taken over the Agriculture Committee in this Congress, Stabenow, a Democrat from Michigan, is hemmed in herself by entrenched Midwest Corn Belt interests who see the farm bill’s new subsidy structure as payback after years of Southern dominance.

Fellow Democrats from the South, like Sens. Mark Pryor of Arkansas and Mary Landrieu of Louisiana, have a major stake in some compromise. But to a remarkable degree, the fighting is among Republicans and driven by animosities going back almost two decades to when Sen. Pat Roberts (R-Kan.) chaired the House Agriculture Committee and was famously undercut by Southern Republicans allied with the same commodities.


The regional flare-up comes as all of American agriculture is under pressure to cut crop subsidies given the record deficits facing the government. There is broad agreement that the current system of direct cash payments can no longer be politically defended, especially at a time of high farm income. The question is how those savings are redistributed between deficit reduction and a revised safety net.

Rogers also singles out another government agriculture program – often-overlooked in farm bill debates – that benefits just corn growers:

At one level, the Senate bill is a true turning point in farm policy, urging growers to use this opportunity to rid themselves of old-styled target price supports and embrace a more open world market — together with subsidized crop insurance to manage risks.

But the reality is that government-driven mandates encouraging ethanol production are a major force behind corn’s higher profits. And if the farm coalition comes apart, the huge subsidies promised for the new insurance vehicles will become more of a political vulnerability for all players.


Table Scraps:

-       Add another editorial board from farm country to the list of media outlets voicing scorn for the Senate farm bill. This week it’s the Kansas City Star: “ If the taxpayer is picking up almost all the risk, however, it begins to look like the agricultural version of Fannie Mae’s business plan: privatized profits, socialized risk.”

-       Alan Guebert, Farm and Food File columnist at the Aberdeen (S.D.) News, quotes The Atlantic magazine in his take on crop insurance: “From 2000 to 2010, ‘taxpayers contributed more than $42 billion’ to the 15 private companies’ that administer the program...”

-       Sen. Chuck Grassley (R-Iowa.) takes issue with farm groups spreading myths about his efforts to reform eligibility for federal farm payments.

-       New York farmers are increasingly worried about the threat that natural gas extraction poses to their livelihoods and natural resources. No word yet from Gulf of Mexico fishermen whose jobs are threatened by toxic farm run-off from Midwest corn fields.

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