Farm-bill deal cuts farmers’ payments, draws veto threat
Posted on Friday, May 9, 2008
WASHINGTON — Members of the House and Senate agriculture committees Thursday detailed the agreement they reached on agriculture policy. It would increase spending on food-stamp and nutrition programs over the next five years, while making cuts in farmers ’ federal crop payments.
The principals of the two committees reached a deal Wednesday and drew a veto threat from President Bush.
The deal sets policy for five years, but under congressional rules, the Congressional Budget Office projected the impact of the new policy for 10 years, pegging the cost at $ 570 billion.
That’s $ 10 billion over the projected cost of keeping current policy intact.
Nutrition and food-stamp programs would see funding increased by $ 10. 3 billion, and biofuel and conservation programs would also see gains. Crop payments would be cut by $ 3. 5 billion.
Arkansas’ U. S. Sen. Blanche Lincoln, a Democrat who heads the commodity subcommittee on the Senate Agriculture Committee and served as a conferee in House-Senate negotiations, said the deal is “budget-neutral” and, therefore, shouldn’t warrant a veto.
“We’ve put more restrictions on production agriculture than we have in the history of the farm bill,” she said. “The White House has not wanted a bill from the get-go.” Some of the restrictions mentioned by Lincoln include a lower cap on the income farmers can have and still qualify for federal payments, a cap on all direct payments and the elimination of the “three-entity rule,” which allows farmers to collect payments on more than one property.
The deal “signals to our trading partners that the U. S. is not serious about reform,” said Sallie James, a trade-policy analyst at the Cato Institute, a Washington research group that advocates free markets. She said the subsidies still present in the bill could invite litigation at the World Trade Organization.
In an era of budget deficits and high commodity prices, she said, the bill “lavishes” attention on farmers. “Congress shirked a golden opportunity for reform.” Current farm policy, which had been extended six times while congressional negotiators worked out a deal, expires May 16.
The bill would add funding for the first time — $ 466 million — for research and marketing of specialty crops such as fruits and nuts. The bill would also replace the current system of making payments to farmers hit by drought, flooding or other disasters, by budgeting $ 3. 8 billion for a disaster-assistance program.
Last week, when negotiators reached a tentative deal, the limit on direct payments to farmers was placed at $ 50, 000 a year. In the final deal, the limit was lowered to $ 40, 000, and the cap on income was lowered from its current $ 2. 5 million to $ 750, 000 (nonfarmers’ income is capped at $ 500, 000 ).
Lincoln said she “wasn’t in the room” when the direct-payment agreement was made, but “we knew we were going to have to pare down that piece.” U. S. Sen. Saxby Chambliss of Georgia, the committee’s ranking Republican, said: “We moved as far as we could toward the administration” on farm payments.
The legislation will go to the House and Senate floors next week.
“We’re not at the finish line,” said Collin Peterson, a Minnesota Democrat who is chairman of the House Agriculture Committee. “We’ve got to figure out a way to get this into law.”
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