WASHINGTON, April 26 - The Senate Agriculture Committee voted 16-5 to advance a new five-year farm bill that promises to save taxpayers over $23 billion via reforms to farm, conservation and nutrition programs. But some House Agriculture Committee members are already signalling that it’s dead on arrival on their turf.
It creates a new program, dubbed Agricultural Risk Coverage, to partially compensate grain and soybean growers for revenue declines not covered by federally-subsidized crop insurance while also closing loopholes that have allowed the nation’s biggest farms to collect millions in government payments.
The measure now goes to the Senate floor. Majority leader Harry Reid has given no indication when it will be debated by the full Senate, but Chairwoman Debbie Stabenow, D-Mich., said she felt the Farm Bill is in a “good position now with a strong bipartisan vote,” and that she expects it to reach the Senate floor “within a few weeks.” She indicated that Senate Majority Leader Harry Reid, D-Nev., is “interested and anxious to sit down and go through the bill.”
“We put together a bipartisan Farm Bill that’s focused on farmers and that gives them simplicity, flexibility, and real accountability,” Stabenow said.
The bill rolls four commodity support programs into one and 23 conservation programs into 13 and also eliminates 15 rural development and 60 ag research programs, boasted Ranking Member Pat Roberts.
“This is a reform bill,” Roberts said. “No other committee, in the House or Senate, has voluntarily undertaken programmatic and funding reforms at this level in this budget climate.”
Roberts joined Stabenow and many of their colleagues in celebrating the bill’s reliance on crop insurance as the foundation for the next farm safety net.
“This is a significant step in the right direction for farm policy,” opined Nebraska Sen. Mike Johanns, a Bush-era USDA Secretary.
The panel marked up the 1000-page bill, formally known as the Agriculture Reform, Food, and Jobs Act of 2012, in only five hours, a feat considered unlikely only 48 hours earlier when a rebellion by Democratic Sens. Kent Conrad of North Dakota and Max Baucus of Montana forced Stabenow to delay the drafting-session until Thursday.
She used the extra time to “sweeten” the legislation to gain support from Conrad, Baucus and other likely “no” votes. In the process, the farm bill “price tag” grew by over $1.6 billion, according to a comparison of Congressional Budget Office “scores” between the first draft mark on April 23 and the most recent proposal on April 26. These numbers do not reflect today’s amendments.
“This is a win for farm and ranch families all across the country [and] this is a win for the economy of America,” Conrad declared.
The add-ons include a 5% increase in planted acreage eligible for “shallow-loss” payments - to 65% for farmers who select individual coverage and 80% for those who take county-level coverage – and $800 million in mandatory funding for energy programs.
The money will “provide provide key resources to rural energy programs such as loan guarantees for on-farm renewable energy, energy-efficiency projects, and research and development for advanced biofuels,” said Tom Buis, CEO of Growth Energy, an ethanol industry group.
Of the five members who voted “no,” three – Republicans Saxby Chambliss of Georgia, Thad Cochran of Mississippi and John Boozman of Arkansas – complained the bill’s revenue-based safety net would benefit corn and soybean producers and harm rice and peanut farmers, whose earnings are more likely to fall due to lower market prices than weather-shortened crops.
“By squeezing all crops into a program specially designed for one or two crops, this bill will force many growers to switch to those crops in order to have an effective safety net. Isn’t this the very planting distortion caused by farm policy that we ought to avoid?” Chambliss, a former chairman and ranking member of the committee asked.
Rice and peanut interests expressed disappointment with the Commodity Title, but said they “remain hopeful” of a more equitable risk management package when the House Agriculture Committee fashions its version of multi-year farm legislation in the next few weeks.
House Ag Chair Frank Lucas, R -Okla., has all but guaranteed it.
The Commodity Title “has yet to be worked out in a way that would be a final Farm Bill,” Lucas said of the Senate’s one-size-fits-all approach. “A shallow loss program is not a safety net. It does not provide protection against price declines over multiple years and it does not work for all commodities."
Rep. Mike Conaway, R-Texas, chairman of the General Farm Commodities and Risk Management Subcommittee, said the Senate measure was “so lopsided and discriminatory” against southern crops that he’s not sure it can be rescued by the House.
“Today was a big step backward in completing a Farm Bill this year," Conaway said.
The National Cotton Council, which got its Stacked Income Protection (STAX) and modified marketing assistance loan program into the Senate version, voiced concern with provisions regarding a new lower $50,000 per person or legal entity payment limit for covered commodities and peanuts, a significantly lower Adjusted Gross Income test of $750,000, and changes to the actively engaged in farming provisions used to determine eligibility for revenue and loan programs.
But farm subsidy reformers were overjoyed.
The “actively engaged” amendment offered by Iowa Republican Charles Grassley limits payments to not more than one farm manager per farm operation. Under current law, farms can collect multiple payments through passive investors and landowners who are counted as farm managers.
“There is no justification for allowing non-farmers to receive payments,” Grassley said.
Meanwhile, the House also is expected to take a far bigger bite out of future nutrition outlays than the Senate’s $4 billion reduction, but even that amount was too much for New York’s Kirsten Gillibrand. She was the only Democratic member of the panel to vote against the bill.
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