Senate-passed farm bill reduces deficit and offers certainty to producers

Jun 17, 2013

The Senate last week passed the Agriculture Reform, Food, and Jobs Act of 2013, S. 954, by a vote of 66-27. The $955 billion rewrite passed by a larger margin this year than last year’s 64-35 vote on similar legislation. Most of the increased votes were credited to Republicans who found a compromise on rice and peanut subsidies for southern states.

The bill will reduce the federal deficit by almost $24 billion through a number of reforms, including ending direct payments to producers, according to lawmakers. The 2013 farm bill also strengthens crop insurance by retaining the premium support that farmers rely upon to afford insurance. Additionally, the bill gives farmers the option to buy increased coverage to control risks.

The bill is opposed by conservative groups, like Freedomworks and the Heritage Foundation, for proposing too much spending, and by some dairy farmers who oppose new milk supply limits. Supporters of the bill include the crop insurance industry, which would see a boost under the bill’s commodity provisions, and the biotechnology industry, which rallied against a potential add on for genetically modified organism labeling language.

Several senators have shared their thoughts on the farm bill.

The Senate version is a step backward for agriculture policy, according to U.S. Sen. Mike Enzi, R-WY, who voted against it. Enzi said the bill doesn’t go as far as the 2012 farm bill in eliminating target prices for certain agriculture products, nor does it do enough to eliminate the waste in the food stamp program. The legislation also contains burdensome conditions on federal crop insurance which will negatively impact Wyoming farmers, according to Enzi.

“While there were provisions in the farm bill that I support, the good did not outweigh the bad,” said Enzi. “With America more than $17 trillion in debt, we need to be finding ways to do more with less, and that includes the farm bill. When the Senate negotiated this bill last year, we were able to end all direct subsidies to farmers and move toward a more efficient federal crop insurance program. These are important changes that our agriculture policy needs to reflect and I hope we are able to see them brought up when this bill goes to conference committee.”

Both of Iowa’s senators, Tom Harkin and Chuck Grassley, voted for the Senate farm bill. But Grassley told reporters he still has some concerns over the final write up on the bill.

“It spends too much overall—more belt-tightening can be made on nutrition programs,” Grassley says, “and it has a target price program which takes us backwards in farm policy about 15 years.”

But Grassley also sees positives in the bill.

“It has my payment limit reforms—and it makes crop insurance pretty much the same as it has been,” he says, “and, of course, it saves taxpayers many billions of dollars.”

The Senate’s $500 billion farm bill passed on Monday afternoon carries with it about $4 billion in savings over 10 years on food stamps, known as SNAP. It’s a reduction of about a half percent. On the other hand, the House version trims $20 billion from SNAP over the next decade, which is closer to a 3 percent reduction.

Colorado U.S. Sen. Michael Bennet, a member of the Senate Agriculture Committee, welcomed the passage, which includes two measures to improve forest health. Bennet introduced both measures earlier this year and worked with the committee to have them included in the comprehensive long-term farm bill.

“Colorado’s forests, like many across the country, have suffered from the effects of a warming climate and persistent drought conditions. Last summer’s devastating wildfires demonstrated the importance of active management to keep them healthy,” Bennet said. “These two measures will help the Forest Service and local businesses maintain healthy forests and reduce the risk of wildfires—all while respecting our wilderness areas and existing agency plans.”

Sens. Tom Coburn of Oklahoma and Dick Durbin of Illinois sponsored the included amendment that trims crop insurance subsidies, which will affect about 20,000 farmers. According to the senators, the bill trims crop insurance subsidies for the most well-to-do farmers; producers who make $750,000 or more annually would see a reduction.

Senate Agriculture Committee members Mitch Mc- Connell of Kentucky and John Thune of South Dakota voted against the Senate farm bill. Thune told reporters that the bill contains an outdated counter-cyclical program with even higher fixed target prices for rice and peanuts. Thune also said the bill’s attempt at reforming the food stamp program falls short.

Nebraska Sen. Mike Johanns, who voted against the measure in committee, said this isn’t the farm bill he would have drafted, but does believe it is better than no farm bill at all. Johanns voted in favor on the Senate floor.

North Dakota Sen. Heidi Heitkamp praised the passage.

“This is a crucial step in my efforts to ensure that North Dakota producers have the certainty they need so they can continue to feed the world.”

“Last year, the Senate similarly passed a bipartisan bill, only to have the House of Representatives refuse to take it up. North Dakota producers deserve a long-term bill and it is incumbent upon the House to step up for rural America. Inaction will simply delay needed reforms, prevent smart cuts from taking place and continue unneeded policies that do not reflect the needs of rural America,” continued Heitkamp.

Heitkamp worked to defeat several proposals that she believed were harmful to North Dakota, including an effort by special interests to dismantle the Sugar Program.

Notable in its absence from the bill is the government’s direct payment program. Some of the savings created by that cut are directed to subsidize crop insurance premiums.

While the passage of the bill through the Senate is a big step, there is still speculation on a final farm bill for this year. The House has to pass its version before the two pieces of legislation are merged in conference and sent to the president.

But optimism still remains. House Speaker John Boehner says he expects the farm bill to come to the House floor this month, and he plans to support it. Because of its strong bipartisan support in the Senate, House Agriculture Committee Ranking Member Collin Peterson hopes that his colleagues will consider the farm bill next week, and get it to the president before the August recess.

The Ohio Republican voted against the last farm bill in 2008 and said last week that he has concerns with this year’s version as well. But doing nothing, Boehner said, means “that we get no changes in the farm program, no changes in the nutrition program.”

While the bill has been dubbed the “farm bill,” some believe it is more of a “food stamp bill.” Almost 80 percent of the close to $100 billion-a-year cost goes to food stamps, which have more than doubled in cost since 2008. The farm bill approved by the House Agriculture Committee last month cuts that program by a little more than 3 percent and makes it harder for some people to qualify.

But the bill expands other subsidies, creating a new crop insurance program and boosting support for several individual crops. The House bill saves about $4 billion a year.

Boehner said that whatever his own concerns with the legislation, he wants to see it move to a House-Senate conference.

“I’m going to vote for the farm bill to make sure that the good work of the Agriculture Committee and whatever the floor might do to improve this bill gets to a conference so that we can get the kind of changes that people want in our nutrition programs and in our farm programs,” he said.

National Farmers Union (NFU) President Roger Johnson issued the following statement upon reports that Boehner will support the legislation:

“It is promising to hear that House leadership is embracing the 2013 farm bill and its importance to all Americans. I also applaud Reps. Lucas and Peterson for their bipartisan leadership in getting the bill to the floor. In order to provide certainty for U.S. family farmers and ranchers, it is critical that the farm bill continues making progress toward conference and final passage prior to the Sept. 30 deadline.

“FARRM makes significant, much-needed reforms to agriculture programs, including significant deficit reduction. The farm bill also prevents the necessity for emergency ad hoc disaster programs, which almost always represents deficit spending.

“NFU also supports the bill’s elimination of direct payments. American farmers need a safety net in times of natural disaster and long-term price collapse, not when conditions are more favorable. We will continue to work with members of Congress through the passage in the House and conference process to ensure that we end up with a comprehensive, five-year bill that is the best that it can be.”

But groups opposing the bill are pulling out all the stops.

Heritage Action announced last week a second round of radio ads targeting House lawmakers supportive of the bill’s nearly $800 billion in food stamp spending. The new ads target Reps. Mike Conaway, R-TX, Glenn Thompson, R-PA, and Austin Scott, R-GA, and continue the previous ads targeted at Mike McIntyre, D- NC. In addition to McIntyre, the previous ads included Reps. Rick Crawford, R-AR, Martha Roby, R-AL, and Frank Lucas, R-OK.

“Republicans retained control of the House to serve as a check on President Obama’s disastrous policies, advancing a nearly one trillion dollar food stamp and farm bill ignores that mandate,” Heritage Action’s Michael Needham said in a statement after Boehner announced his intention to vote for the bill, referring to the bill’s cost over the next decade. — Traci Eatherton, WLJ Editor