Congress Begins Uphill Battle To Pass Farm Bill

By: Associated Press Email
By: Associated Press Email

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April 20, 2012

The Senate has begun laying the groundwork for
a half-trillion-dollar farm and food bill that would end
unconditional subsidies to farmers, but House Republicans' resolve
to cut its biggest component -- food stamps -- by $13 billion a year
dims its prospects of passing Congress.

The current five-year farm bill expires at the end of September,
and the Senate's agriculture committee on Friday released a draft
of its plan to redesign safety nets that help farmers weather bad
times while achieving some $23 billion in deficit reduction. The
full committee is to vote next week on the plan, which consolidates
conservation programs and takes several steps, such as stopping
lottery winners from getting assistance, to make the food stamp
program more accountable.

But before getting a bill to the president, lawmakers must
satisfy multiple constituents with different agendas -- northern
corn growers, southern cotton farmers, insurance companies, banks,
nutrition groups and environmentalists. Most difficult will be
narrowing the gap between the Democratic Senate and House
Republicans taking aim at the food stamp program that comprises
some 80 percent of the bill's spending.

Farmers are also cursed by their own successes. With farm
incomes as high as they've been in decades, it's harder to convince
lawmakers that they still need strong protections for future
disasters and market downturns.

Most give chances of success at no better than 50-50, which
frustrates farm groups seeking some certainty in government policy.
There's still seven months to work on a bill before the
presidential election, said Jon Doggett, vice president for public
policy at the National Corn Growers Association. "Our membership
is getting extremely concerned to hear members say we can't pass a
farm bill this year. There are a lot of growers who are really very
very angry."

The Congressional Budget Office says that at the current
spending pace the Supplemental Nutrition Assistance Program, or
food stamps, would spend about $400 billion over the five-year life
of a farm bill enacted this year. Crop insurance subsidies would
average about $9 billion a year, commodity subsidies $6.6 billion
and farm conservation programs $6.5 billion.

Last fall, when the congressional supercommittee was making its
futile attempt to come up with a long-term deficit reduction plan,
Senate agriculture committee chairman Debbie Stabenow, D-Mich., and
her Republican colleague in the House, Frank Lucas of Oklahoma,
came up with a plan to cut $23 billion from farm and food aid over
the next decade while replacing direct payments to farmers with a
new revenue insurance program. That plan is the framework as the
agriculture committee's draft of the massive bill that also
includes such areas as energy, forestry, rural development and
international food aid.

The Barack Obama administration in its budget proposal this year
outlined a similar plan, calling for cuts of $32 billion and also
eliminating direct payments, a subsidy that farmers collect based
on a land's production history but not connected to crop prices or
yield.

But the GOP-led House sees farm and food aid as a prime source
for deficit reduction, and the budget of Budget Committee chairman
Paul Ryan, R-Wis., that cleared the House last month requires
almost $180 billion in cuts from farm bill programs over the next
decade. That included $134 billion, or an average $13.4 billion a
year, from the food stamp or SNAP program.

As part of that, the House agriculture committee on Wednesday
approved $7.7 billion in reductions for next year, or $33 billion
over a decade, to the SNAP program to help avoid automatic cuts in
defense and other programs next year.

Republicans argued that spending for SNAP, which has grown from
17 million recipients in 2001 to more than 46 million today, is
bloated by waste and fraud and can be reduced without taking food
away from the needy.

But Democrats are strongly opposed to anything more than
marginal cuts to the food stamp program and saw the Ryan budget as
a major deterrent to getting a farm bill this year. "Passing a
farm bill this year was already going to be difficult but the
Republican budget approved by the House today lowers the odds,"
the top Democrat on the House agriculture committee, Collin
Peterson of Minnesota, said after the budget vote.

"Farmers and ranchers are fiscally conservative and definitely
want to contribute as much as they can to deficit reduction," said
Chandler Goule of the National Farmers Union. But he said the
entire farm bill with nutrition is still only about 2 percent of
the federal budget and farmers are already bearing more than their
fair share with the $23 billion in cuts proposed last year. "The
government needs to go somewhere else to find additional money ...
that's what our producers think," he said.

House committee chairman Lucas voted for the Ryan budget, but
said in a statement that he "would caution people about reading
too much into the numbers or policy proposals in either the
president's budget or the Ryan budget .... they are only
suggestions." He stressed on Wednesday that his committee's
proposed cuts in SNAP "would improve its integrity so that
families most in need can continue to receive nutrition
assistance."

The main focus of the Senate debate on the bill will be reaching
a consensus on the future safety net for commodities. Direct
payments, now costing $5 billion a year, are likely to be replaced
with some form of "shallow loss" program that would pay farmers
when modestly decreasing yields or declining prices result in a
farmer's revenue falling below historic averages.

For more serious losses, crop insurance kicks in. An average 60
percent of crop insurance premiums are subsidized by the
government.

Corn and soybean farmers are strong advocates of this approach,
which would help maintain their current economic prosperity, while
southern growers of rice, cotton and peanuts prefer the more
traditional counter-cyclical payments where target prices are set
and farmers are compensated when those prices aren't reached.

If no deal is reached by September, Congress will need to extend
the existing bill, and that too will not be easy. Both the 2002 and
2008 farm bills were passed after one-year extensions, and Congress
has had to extend the transportation bill, another huge piece of
legislation that has defied compromise, nine times since the old
act expired in 2009.

But most agree that the House would not extend the farm bill
without exacting cuts in existing programs. "I strongly suspect
there will be some kind of penalty price to be paid," said Mary
Kay Thatcher of the American Farm Bureau Federation, saying that
that could come in the form of cuts to direct payments or food
stamps.


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