U.S. House farm bill cuts $35 billion, boosts crop supports

July 6, 2012 2:40 PM

 

With time running out for a new U.S. farm law, agriculture leaders in the House of Representatives insisted on July 5 on keeping traditional farm subsidies that the Senate wants to kill and called for big cuts in food stamps for the poor.

The bill could face an uphill battle in the House because of its busy agenda and the pressure to find even bigger cuts. As well, steep cuts in food stamps would face stiff opposition when it comes time to reconcile the bill with the Senate's version.

The House Agriculture Committee was scheduled to vote on the package next Wednesday. After that, the House has 18 days available for floor debate before the 2008 law expires on Sept 30. Analysts see low odds for enactment of a new law on time.

Congress could pass a farm bill in its lame-duck session after the November election or early next year, two points when deficit reduction will be a priority and steeper spending cuts would be possible.

In their bill, House Agriculture Committee leaders would increase, by up to 40 percent, target prices that trigger payments to grain and oilseeds farmers. They would give growers the choice of two farm programs -- traditional supports or a revenue guarantee that is the heart of the Senate-passed farm bill.

"This bill is an investment in production agriculture and rural America," said committee chairman Frank Lucas, an Oklahoma Republican. The Democratic leader on the committee, Collin Peterson of Minnesota, sponsored the bill with Lucas.

Peterson said he would have preferred to avoid the food stamp cuts but "we need to keep this farm bill moving forward."

Higher target prices would resolve a complaint by rice and peanut growers in the U.S. South that the Senate's revenue program is unfairly skewed toward corn and soybean growers in the Midwest. Some analysts said support rates sought by rice and peanut growers were unduly high.

Overall, the bill would cut Agriculture Department spending by $35 billion over 10 years, or $12 billion more than the Senate. Almost all the additional cuts come from food stamps.

The Environmental Working Group slammed the House bill as expanding farm subsidies rather than reforming them.

The Senate farm bill would eliminate traditional subsidies such as target prices and instead compensate growers when revenue from a crop is 11-21 percent below average.

The House bill's revenue plan would pay growers when revenue is from 15-25 percent below average. In either bill, crop insurance would cover deeper losses.

A House committee aide said the Senate approach is too generous and in some cases could guarantee a profit to a grower.

Neither bill would change the sugar program, which restricts imports and guarantees a minimum price for U.S. sugar. Both would give cotton growers an insurance-like revenue program in hopes of resolving a decade-old dispute with Brazil over cotton subsidies.

The Senate bill would require farmers to practice soil, water and wildlife conservation to qualify for federally subsidized crop insurance and would require big operators to pay a larger share of premiums. Neither provision is part of the House bill.

Like the Senate, the House bill streamlines conservation programs and would reduce the Conservation Reserve, the largest U.S. land-idling program, to 25 million acres from its current 29.6 million acres. More emphasis would be put on conservation of "working lands" to meet rising world demand for food.

The House bill proposed target prices of $3.70 a bushel for corn, $8.40 a bushel for soybeans, and $5.50 a bushel for wheat.