Skip to comments.Accord Reached on a Bill Raising Farm Subsidies
Posted on 04/27/2002 1:58:25 AM PDT by JohnHuang2
ASHINGTON, April 26 Senate and House members agreed today on a farm bill costing more than $100 billion over six years that will raise subsidy payments to the country's biggest grain and cotton farmers, a nearly complete reversal of Congress's attempt six years ago to wean farmers of all subsidies.
At the same time, the measure finances some of the most significant conservation and environmental programs in recent years, with $17 billion dedicated over the next decade to preserve farmland, save wetlands and improve water quality and soil conservation on working farms.
It is also one of the major pieces of social welfare legislation before Congress this year, increasing food stamps for working families and children and restoring the right of legal immigrants to receive them.
Months of election-year jockeying produced a bill that seeks to satisfy every region and segment of the country. Lawmakers from farm states in the Midwest and South won the largest subsidies for cotton, rice, wheat, corn and soybeans. Legislators from the Northeast won a new $1.3 billion national program to replace the defunct dairy compact. The conservation programs will help densely populated states hoping to control urban sprawl. And for cities and rural areas, the increase in the food stamps and nutrition program will begin to redress the losses from the 1996 welfare overhaul that has led to overburdened private soup kitchens and food pantries.
"The winners in this bill are the American farmers," said Representative Larry Combest, the Texas Republican who headed the conference committee of House and Senate members.
The measure represents an agreement to subsidize farmers' income at a time when grain and cotton prices are at record lows and production is at an all-time high.
Lawmakers did not say how much of the $100 billion-plus would go for subsidies, but it is believed to be the vast majority of the money.
The last major piece of farm legislation, the 1996 Freedom to Farm Law, tried to eliminate subsidies and let the market dictate prices and production levels. But farmers and agribusiness, which represents 13 percent of the country's gross domestic product, convinced Congress to pass annual emergency payments raising subsidies to a record $20 billion last year.
The compromise announced today represents a rejection, as well, of a movement to limit the size of payments to farmers. During the year-long debate, lawmakers complained of multimillion-dollar payments to some of the country's biggest farmers, who were buying out the small family farms the program was originally intended to save.
Spurred by a Web site that revealed how hundreds of farmers and absentee landlords received millions of dollars in subsidy payments since the last farm bill, the Senate version included a limit of $275,000 per farmer. But negotiators over the past month dropped that limit. The final compromise includes a limit of $360,000 but with enough exceptions to make it a symbolic compromise.
"This is not a meaningless payment limit," said Senator Tom Harkin, the Iowa Democrat who is chairman of the Agriculture Committee. "What we have learned is we have to make the system of payments transparent."
From the consumer's point of view, the increase will have little effect on supermarket prices. The farmer receives about 20 cents of every dollar spent for groceries; the rest goes mostly to the grain companies and other middlemen.
"The impact is on the taxpayer," said Keith Collins, chief economist for the Agriculture Department.
Lawmakers wrote the farm bill months earlier than its Oct. 1 deadline out of fear that the growing budget deficit would threaten the money available to raise the commodity subsidies.
In a week that the Senate passed an energy bill that would expand the amount of ethanol in the nation's gasoline, many of the nation's farmers had much to celebrate.
The Bush administration congratulated the lawmakers today for reaching a compromise and promised to work with Congress to carry out the bill in time for the 2002 crop.
In his presidential campaign, Mr. Bush emphasized expanding the global market for American agriculture. In an election-year policy statement, he also said he believed that "over the long run the best way to ensure a strong, growing and vibrant agricultural sector is through a more market-driven approach."
This increase in commodity subsidies goes against the standard market approach.
But the administration had been silent on most issues throughout the debate, except for a strong appeal to reinstate food stamps for legal immigrants. Lawmakers largely ignored the White House's earlier protest that the farm bill was too expensive as well as a long policy statement released by Agriculture Secretary Ann M. Veneman that promoted more trade-friendly policies and more fairness in distributing farm subsidies.
Small farmers and their advocates were disappointed with the compromise measure, saying that the Senate had backed down too easily on payment limits and reducing by $5 billion the financing for conservation programs that reach small farmers frozen out of other programs.
Some 10 percent of the nation's farmers receive the overwhelming share of subsidy payments in a formula that remains basically unchanged in the compromise.
"Why did they bother doing a Senate bill?" asked Ken Cook, of the Environmental Working Group, a nonprofit research group that created the Web site on farm payments. "But the issues of payment limits and fairness and better conservation programs will not go away."
While the conservation financing is less than the Senate version, lawmakers said it represented an 80 percent increase in current financing and was the largest conservation measure to pass Congress in years.
"The farm bill is the only game in town," said Scott Stoermer of the League of Conservation Voters. "This is the first piece of strong environmental legislation since before the Republican revolution of 1994."
To the disappointment of rice and wheat farmers, the compromise version removed a Senate provision to allow private United States financing of food sales to Cuba.
In another trade-off, lawmakers struck a provision aimed at loosening the hold of huge meat packing companies on ranchers and farmers but agreed to require within two years a country-of-origin label to mark meats, fish, fruits and vegetables as raised or grown in America.
The food industry complained that the new labeling measure would cost $1 billion.
Anti-hunger advocates applauded the new bill, saying the $6 billion increase as well as changes to streamline the program could help reduce the poverty gap for working families and in some cases help lift them above the poverty line.
The lawmakers also reinstated a program to give vouchers to the elderly to buy fresh fruits and vegetables at farmers markets.
"This is a terrific outcome one of the most important pieces of social welfare legislation this year," said Stacy Dean of the Center on Budget and Policy Priorities.
The bill also includes a new $3 billion subsidy for peanut farmers as well as a $1 billion buyout program of the old peanut price support system.
The final version still must be passed by the House and Senate and signed into law by the president.
Once again, the loosers are the American Taxpayers!
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