Both Versions Of US Farm Bill Target Subsidies, Food Programs, Conservation Efforts

on July 11 2012 6:21 AM

The U.S. House of Representatives' Committee on Agriculture is scheduled Wednesday to start its markup session to make final revisions to the Federal Agriculture Reform and Risk Management Act, the House's version of a $500-billion omnibus farm bill that will steer the country's agriculture policy for the next five years.

After the House hammers out its final draft, which will take at least three days, the two houses of Congress then have to merge their versions, pass that bill in both houses, then send it to the White House. And all this has to occur before the 35-day summer recess begins Aug. 3, with an approaching presidential election.

In other words: Good luck with that, Congress.

The current $288-billion farm bill expires on Sept. 30 and lawmakers will have to extend the current bill's authority until they reconvene if they don't act quickly. On Wednesday the House will also be voting to repeal the Affordable Care Act, aka Obamacare, in a last-ditch Hail Mary that might slow down the markup process, extending the bill's final draft until at least next week.

Even if Congress forces farmers and ranchers to spend the rest of the year pondering the possible outcomes of this process, a lot can already be gleaned from the two existing verisons of the bill. The Senate's final version was released last week. Both it and the House's latest draft share some key similarities, most notably the elimination of direct farm subsidies and the implementation of new safety net protections for farmers' unexpected price and yield losses. Also found in both versions of the bill: cutting $6 billion from conservation programs, a move that has riled environmentalists.

Both houses are targeting food assistance programs, too, with the House proposing to squeeze $16 billion from the Supplemental Nutritional Assistance Program, or SNAP, commonly known as food stamps, which has been met with outrage from advocates for the elderly and the poor.

The Senate version boasts $23.6 billion in total cost cuts, mostly stemming from the elimination of direct subsidies, consolidating environmental conservation programs, and raising the income eligibility requirement for agricultural public assistance from $50,000 of adjusted gross income per individual or entity to $750,000, which is aimed at preventing wealthy farmers from accepting taxpayer money.

The House's most recent draft of its version of the bill contains $35 billion in total cost reductions, also by eliminating direct subsidies and consolidating conservation programs. But its largest cut, $16 billion, is from nutritional assistance whose costs have risen due to the recent economic downturn that has sent one in seven Americans to seek taxpayers' help in feeding themselves and their families.  

The Senate's bill, too, addresses reducing waste and corruption in food aid to America's poorest, but the bill doesn't put a number to these cost reductions. The House version is making these cost-cutting measures central to its $35-billion markdown.

SNAP / Food Stamp Cuts Criticized

The proposed SNAP cuts have been decried by advocates of Americans who depend on food programs for basic subsistence. On Tuesday the National Council on Aging (NCOA), Feeding America, Food Research and Action Center and others condemned this portion of the House bill.

These cuts would be catastrophic for vulnerable older adults and their families, said NCOA President and CEO Jim Firman in a joint statement. Ninety-three percent of SNAP benefits go to households below the poverty line, and 76 percent of SNAP households include an elderly person, child, or disabled person. Taking food out of the mouths of people living at or near the poverty level is unconscionable act, especially when the unemployment rate is so high.

Both versions of the omnibus bill have three direct subsidy programs on the kill list: the Direct and Countercyclical Payment (DCP), the Average Crop Revenue Election (ACRE) and the Supplemental Revenue Assistance Payments (SURE). The Senate says this will save $15 billion; the House claims the same move will save $14 billion. (These programs should not be confused with crop insurance. Last year federal crop insurance cost taxpayers significantly more than direct subsidies and has become more important to farmers in recent years.)

According to Missouri's Food and Agricultural Policy Research Institute the elimination of direct subsidies would reduce government farm program outlays, farm income and agricultural land values, but would only have modest impacts on agricultural commodity markets.

The elimination of these subsidies has been shrugged off by many Midwest corn and soybean growers but has been met with derision from Southern peanut and rice growers who say the cuts hurt them more, according to a report last month in the Wall Street Journal.

Both congressional versions of the bill focus on bolstering protection against the risks inherent with agriculture. The Senate version proposes Agricultural Risk Coverage (ARC) while the House version proffers so-called Price Loss Coverage (PLC) and Revenue Loss Coverage (RLC). Both are aimed at implementing a new safety net policy for the nation's farmers.

The Senate's ARC would pay farmers for both price and yield losses based on a farm's revenue average from the previous five years, and reimbursement rates would be based on whether the claimant has chosen coverage based on one farm, or based on a multiple-farm, county-wide level. Farmers would have to comply with conservation and wetland requirements, and they could only claim losses on planted acreage.

The House's PLC safety net is aimed at supplementing federal crop insurance with coverage for deep, multiple-year price declines that's aimed at avoiding unbudgeted bailouts when markets collapse. The RLC portion is similar to the Senate's ARC except that it doesn't mention compliance with conservation and wetland requirements and excludes farmers with losses of 15 percent or less, as the bill states, to ensure that all risk is not removed from farming and that no growers are guaranteed profits.

A report published earlier this month by the Agricultural and Food Policy Center at Texas A & M University concluded that the House version of the new safety-net programs would be most beneficial to farms, notably because it includes a provision that automatically triggers payments when prices fall below a certain benchmark.

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