Senate passes $286 billion farm bill expanding subsidies

December 15, 2007

Mary Clare Jalonick Associated Press

WASHINGTON - The Senate on Friday approved a $286 billion farm bill with an election-year expansion of subsidies for growers and food stamps for the poor. The bill, passed on a 79-14 vote, expands subsidies for wheat, barley, oat, soybeans and several other crops and creates new grants for vegetable and fruit growers.

It also increases loan rates for sugar producers, extends dairy programs and provides more dollars for renewable energy and conservation programs to protect environmentally sensitive farmland over the next five years.

Sen. Bernie Sanders, D-Vt., said, "While not perfect, the Senate version of farm bill is an important step forward. The bill is a win for dairy farmers who got an enhanced MILC program. It was also a win for nutrition programs, for bio-energy and for conservation."

The Vermont Foodbank hailed the action in the Senate on the 5-year reauthorization, saying the bill would fund and make improvements to the Food Stamp Program and The Emergency Food Assistance Program (TEFAP) providing nutritional assistance to low-income people. "The passage of the Farm Bill in the Senate represents important progress and is a hopeful sign that badly needed hunger relief will be available to low-income Vermonters early next year," said Doug O'Brien, CEO of the Vermont Foodbank.

However, President Bush has threatened to veto the legislation, saying it costs too much and should instead be cutting subsidies at a time of record-high crop prices. He also has threatened to veto a House version passed in July.

Unlike the Senate, the House did not approve the bill by a veto-proof majority, or two-thirds of the chamber. That vote was 231-191.

White House opposition and criticism from fiscal conservatives have so far had little impact on the politically popular bill.

Farm-state senators deflected several attempts to derail the bill and reduce government payments to large growers. Still, even some from farm country acknowledged the bill doesn't do enough to trim the government's massive subsidy programs.

Senate Agriculture Chairman Tom Harkin, D-Iowa, had hoped to take significant steps to reduce subsidies but was blocked by Southern lawmakers on the committee who favor current law. Southern crops such as rice and cotton are more expensive to produce than corn, wheat and most other crops grown around the country.

Harkin had said earlier he wanted to reduce direct payments to farmers, which are paid regardless of crop yield but opposition to the idea was fierce among farmer interest groups. Harkin eventually dropped the plan.

Sen. Kent Conrad, D-N.D., called the bill a "good beginning," though he said it wasn't everything that he and Harkin would have liked.
"We also had to deal with some of the realities of our different states," Conrad said.

Harkin called it a good bill after it passed.

"We can take it home," he said.

While the House and Senate bills are similar, significant differences will have to be worked out after Congress reconvenes in January.
One of them is the creation of new $5 billion fund for weather-related agricultural disasters in the Senate version that was added by Senate Finance Committee Chairman Max Baucus, a Montana Democrat who is up for re-election next year.

House Agriculture Committee Chairman Collin Peterson, D-Minn., has supported the idea of such a fund but ultimately decided that other programs were more important in the House bill.

Both bills attempt to limit subsidies somewhat. The Senate legislation would eventually ban payments to "nonfarmers" whose income averages more than $750,000 a year. The bill defines farmers as those who earn more than two-thirds of their income from agriculture. There would be no new income-based limits on what a farmer could collect, though the bill would ban some farmers from collecting payments for multiple farm businesses.

The House would ban payments to all who earn an average $1 million a year or more, and also bans some farmers from collecting payments for multiple businesses.

A Bush administration proposal goes much further, suggesting a reduction of payments to individuals who make more than an average of $200,000 yearly. The current cap is $2.5 million.

Acting Agriculture Secretary Charles Conner issued a statement after the vote calling the legislation "fundamentally flawed."
"Unless the House and Senate can come together and craft a measure that contains real reform, we are no closer to a good farm bill than we were before today's passage," he said.

A White House statement issued after the vote reiterated that Bush's advisers would recommend that he veto the bill.

The Senate and House also differ on how to pay for it all. The House voted to impose new taxes on certain multinational companies with U.S. subsidiaries that Democrats said were trying to dodge U.S. taxes. Republicans derided it as a tax hike.

In the Senate, Baucus found $3.7 billion to help pay the bill's cost with a crackdown on tax shelters.

Both bills would require meats and other fresh foods to be labeled with their country of origin starting next year, a priority for Western and Midwestern ranchers who compete with Canadian beef.

Many farm programs have been operating under a temporary extension since the last five-year farm law expired Sept. 30. The chairmen of the House and Senate agriculture committees said earlier this week that they will push to further extend the law until March to ensure that funding for the bill remains consistent.

December 15, 2007

Press Room