WASHINGTON – After two years of back-and-forth negotiations, House and Senate conferees have struck a deal on a new farm bill that imposes cuts in the food stamp program and eliminates the controversial direct payment subsidy program for farmers.
The measure, which could come up for a House vote as early as Wednesday, reduces food stamp appropriations by about $800 million a year over the next five years but doesn’t cut any qualified individuals from the program. Instead of direct payments the bill shifts focus toward enhancing the availability of crop insurance, meaning farmers won’t receive financial support unless they face losses.
The package is expected to cost about $100 billion a year over five years – an anticipated cut of around $2.3 billion a year overall from current spending. It has attracted the support of the House Republican leadership – House Speaker John Boehner (R-Ohio) called it “a step in the right direction” – but a sizeable portion of the GOP caucus likely will offer opposition as a result of what they consider insufficient food stamp cuts. Some Democrats are also liable to vote against it because they view those cuts as too extreme.
Regardless, Sen. Debbie Stabenow (D-Mich.), chairman of the Senate Agriculture Committee, promoted the measure as one that “saves taxpayers billions, eliminates unnecessary subsidies, creates a more effective farm safety-net and helps farmers and businesses create jobs.”
It also, she said, benefits from being part of a bipartisan effort.
“This bill proves that by working across party lines we can reform programs to save taxpayer money while strengthening efforts to grow our economy,” Stabenow said. “Agriculture is a bright spot in our economy and is helping to drive our recovery. It’s time for Congress to finish this Farm Bill and give the 16 million Americans working in agriculture the certainty they need and deserve.”
Rep. Frank Lucas (R-Okla.) also touted the savings, asserting that the Agricultural Act of 2014 “is good for farmers, ranchers, consumers and those who have hit difficult times.”
It also carries the seal of approval from the American Farm Bureau Federation, which called the proposal “a solid bill” that will “provide farmers and ranchers certainty for the coming year.”
At the same time, the bill drew criticism from organizations like the Environmental Working Group.
“The bill is seriously flawed and misses an important opportunity to produce agriculture policy that meets the needs of family farmers and the environment and helps families put nutritious food on their tables,” said Craig Cox, EWG senior vice president of agriculture and natural resources.
Still, it appears the bill will have the votes to pass.
The most important policy shift for agriculture producers involves the elimination of the heavily criticized, $5 billion per year direct payment regime that has its roots in the 1996 farm bill. As currently administered, individuals can receive subsidies whether they are actually planting or not, even though the Department of Agriculture anticipates that farm income is likely to hit its highest level in 40 years this year.
Instead, farmers may qualify for subsidies to purchase crop insurance that could prove vital in instances of weather disasters and market volatility, providing farmers with a risk management tool intended to provide protection in difficult times.
Without crop insurance, according to the bill’s authors, farmers would have no way to recover from disaster unless the government steps in and provides unanticipated financial assistance. The effectiveness of crop insurance was underscored during the historic droughts of 2012, which impacted more than 80 percent of the country. Crop insurance protected farmers without the need for an emergency disaster relief bill.
But Cox with the Environmental Working Group countered that the new risk management subsidies are “worse for taxpayers and the environment than the subsidies they are replacing” by adding to “the already bloated crop insurance program.” Furthermore, negotiators rejected a proposal that limited payments to individual farms to $50,000 despite support from both Democrats and Republicans. Instead, the conference report increases the limit to $125,000 and leaves it to the Obama administration to close loopholes that allow large and highly profitable farm operations to escape even the higher payment limits.
The major sticking point, as expected, proved to be the food stamp program, the largest package in the legislation. The GOP-controlled House passed legislation in September aimed at cutting food stamp appropriations by five percent, or about $4 billion. The Democratic-led Senate adopted its own version, calling for a cut of only $400 million. The White House threatened a veto if the legislation stepped over that line.
Negotiators finally agreed to a one percent cut, bringing the reduction to about $800 million – double the Senate proposal but well below the level sought by the House.
The agreement further attempts to close a loophole, exploited by several states, to inflate benefits for a small number of recipients. It also increases program efficiency to save money, cracks down on trafficking, fraud and misuse and invests in new pilot programs to help people secure employment through job training and other services.
The measure also carries a specific provision prohibiting lottery winners from continuing to receive assistance.
Savings are achieved in the Supplemental Nutrition Assistance Program – food stamps — without kicking anyone off the rolls.
The bill also addresses dairy policy but doesn’t include a provision included in the Senate bill yet opposed by Boehner that would have required cuts in milk production in instances where an oversupply was driving down prices. Instead the program eliminates price supports, replacing them with a new insurance program that provides payments to farmers when the gap between the price they receive for milk and their feed costs narrows.
The bill covers a wide range of agriculture-related activities beyond subsidies and food stamps. The bill offers increased funding for farmers’ markets, enhances initiatives for rural economic development and consolidates a laundry-list of conservation programs. It also offers a nod toward new technology by expanding broadband availability.
But one of the most interesting new provisions authorizes colleges and universities around the country to grow industrial hemp for research purposes as long as the states where the research takes place allow it. Want to study the effects of industrial hemp? Now you can do it, so long as your state permits it. Presently, 11 states — Colorado, Hawaii, Kentucky, Maine, Maryland, Montana, North Dakota, Oregon, Vermont, Washington and West Virginia — have such laws.
Industrial hemp, once cultivated quite frequently for use in making rope, clothes and other items, is a close relative of marijuana.
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