The massive farm bill that emerged from the U.S. Senate Tuesday and is on its way to President Barack Obama will substantially change farmers’ lives nationwide and make a step toward altering the way they’ve done business for decades.
While the bill didn’t go as far as some would have liked in changing the nation’s farm payments system, and while it was ensnarled for months in the politics of food stamps, it nevertheless will cause farmers to restructure their operations – and their expectations.
“The biggest drawback was the time it took to get passed,” said Blake Hurst, president of the Missouri Farm Bureau. “We have farmers planting at the end of March, and we’ll still be waiting for the rule changes that come with the bill. So we have five years of certainty; we still don’t know what the rules will be as we pull into the fields.”
The bill sailed through the House last week, and cleared the Senate, 68-32, Tuesday afternoon. The White House has indicated its support for the legislation.
Among Senate Republicans, the vote was 22 in favor, 23, opposed; among Democrats, the tally was 44-9. Both independent senators supported the bill.In a statement after the vote, President Barack Obama said, “As with any compromise, the Farm Bill isn’t perfect – but on the whole, it will make a positive difference not only for the rural economies that grow America’s food, but for our nation.”
The farm bill is the massive piece of legislation that is customarily revamped and passed every five years to lay out the structure of agriculture spending. It directs the activities of the Department of Agriculture, but doesn’t deal solely with traditional farm programs. Among other things, it runs the government’s food stamp, school lunch and school breakfast operations, as well as rural housing assistance.
One of the biggest changes will be ending the farm program’s direct payment system in which farmers were paid regardless of need.
According to data from the Environmental Working Group, an advocacy organization that collects and analyzes farm subsidy information, such payments were worth nearly $159 million to Missouri’s corn, soybean, wheat, rice, cotton, sorghum and other farmers in 2012. In Kansas, they were worth nearly $301 million in 2012, to wheat, sorghum, corn, soybean, barley, sunflower and other farmers.
The change represents a landmark shift in federal agriculture policy, according to Sen. Debbie Stabenow, d-Mich., chairwoman of the Senate Committee on Agriculture, Nutrition and Forestry.
But the direct payments system is being replaced with a beefed-up crop insurance program.
In fact, there are two new programs: “agriculture risk coverage,” which will cover some losses before more extensive crop insurance begins, and “price loss coverage,” which sets specific target prices for different crops. If actual prices fall below those targets, farmers will be covered.
According to Mary Kay Thatcher, a lobbyist for the American Farm Bureau Federation, the big move away from direct payments to more insurance programs is important to ensure that “farmers have some skin in the game.”
“With crop insurance, there is some,” she said.
Craig Cox, a senior vice president for the Environmental Working Group, however, said the old system is merely being replaced by a new one that also distorts the marketplace by having taxpayers pick up the tab for a major portion of the costs in the new crop-insurance system. It’s still a subsidy, only with different rules.
As for the risk that farmers themselves have to assume, Cox said, “It’s going to be less – and in some cases substantially less, depending on which choices farmers make.”
Overall, the Congressional Budget Office in an analysis last month projected that the Agricultural Act of 2014, as the legislation is formally called, would spend $956 billion over the next 10 years.
By far the biggest share of that spending – $756 billion or 79 percent – is in the nutrition program, which includes the Supplemental Nutrition Assistance Program – or SNAP, what is informally known as food stamps. Nutrition spending overall would drop $8 billion when compared with the program in its present form. That’s far less than the Republican-led House would have liked, but slightly more than requested by the Democratic-led Senate.
In a statement, Marion Wright Edelman, founder and president of the Children’s Defense Fund, a nonprofit advocacy group, called the SNAP cuts “indefensible.”
“SNAP is the only defense against the wolves of hunger for 1.2 million jobless families,” she said. “With record numbers of children in poverty, Congress should be launching a war on child poverty and strengthening the safety net for children…”
The crop insurance component is the second-largest in the bill and would increase about $6 billion, out of total 10-year spending of $89.8 billion.
Terry Holdren, chief executive officer and general counsel of the Kansas Farm Bureau, said that “it’s probably not our favorite farm bill ever,” but said that Kansas farmers were supportive of the enhanced crop insurance programs. He said the farmers were concerned about the price-target program, saying they could be difficult to implement.
What he liked about the bill was support for food and agricultural research to help figure out how to feed a growing world population without more land or water. He also cheered the creation of a permanent livestock disaster assistance program that will provide retroactive payments for producers who suffered losses after the previous farm bill expired in 2011.
Among senators from Missouri and Kansas, three voted to support the bill and one – Kansas Republican Pat Roberts – was against it. Sens. Roy Blunt and Claire McCaskill of Missouri, a Republican and Democrat, respectively, were for it, as was Jerry Moran, R-Kan.
In a statement last week, Roberts said, “I cannot and will not vote for this legislation. It all comes down to this simple question: does the new farm bill improve agriculture and America? I believe the answer is unfortunately: no.”
Roberts, who chaired the Agriculture committee when he served in the House, said that the new price target program “repeats a classic government subsidy mistake – setting high fixed target prices – which only guarantees overproduction with long periods of low crop prices, leading to expensive farm programs funded directly by taxpayers.”
“I have yet to hear one legitimate explanation for why Congress is about to tell all producers across the country that the federal government will guarantee the price of your wheat at $5.50 per bushel and rice at $14 per hundredweight for the next five years – regardless of movements in the market,” he said.