On a 15-5 vote, the Senate Agriculture Committee passed its new farm bill early Tuesday afternoon. The bill, which will cost taxpayers some $500 billion over a decade, generated the most debate over target prices for rice and peanuts and cuts to nutrition programs.
Read the bill here.
Michigan Sen. Debbie Stabenow, committee chairwoman, said her joint goal with Mississippi Sen. Thad Cochran, ranking member, was to “craft another strong farm bill that gives farmers the ability to manage their risk that streamlines programs and cuts red tape for farmers and that recognizes the diversity of agriculture from the cotton fields in the Mississippi Delta to the cherry orchards in Traverse City.”
Also atop the agenda: deficit reduction. “Agriculture has been willing to do more than its part from the ‘super committee’ process to the farm bill we passed last year,” continued Stabenow. “This bill reflects agriculture’s cuts from the sequester and goes beyond that in spending reductions by making tough decisions and setting priorities that make sense for farmers, families, and taxpayers.”
The bill, she said, would mean “significant savings” by reducing spending $24 billion over 10 years.
The bill, said Cochran, “reflects fiscal responsibility but provides a workable and strong safety net for families and producers of food and fiber that we hope they never need.
“We’ve made some reductions. We’ve streamlined and consolidated programs. There is also significantly less mandatory money authorized for energy programs than in the 2008 farm bill…
“Farmers and ranchers need the certainty that comes from a five-year farm bill. We have tried to be fair to those affected by this bill, as well as to those who pay the bill. … We hope this is a workable bill that encourages conservation of land and water resources at the same time it rewards production of reasonably-priced commodities.”
Target price push-back
As in the 2012 farm bill passed out of committee, the 2013 version eliminates direct payments and a tab of $5 billion annually. That wasn’t enough for some Midwest Republicans who, harkening back to the regional problems experienced during last year’s debate, repeatedly criticized the target prices put on rice and peanuts.
Most aggrieved was Kansas Sen. Pat Roberts, who began his criticism at the outset of the hearing. “I do not believe this is a reform bill. I believe it is a rear-view mirror bill. Target prices under any name -- whether counter-cyclical payments, adverse market payments or government subsidies -- are proven to be trade and market distorting.
“It is beyond frustrating that a year ago we passed a bill with no counter-cyclical program and real reform. Today, we’re asked to support the new adverse market payment program that just amps up the subsidies and continues target prices for all commodities even though there are areas of the country where we don’t want them.”
Roberts, who had his committee leadership position taken by Cochran earlier this year, continued: “This mark-up not only sets target prices, it raises the guaranteed price level for rice by $2.80 to $13.30 and peanuts jump from the $495 target to $523. These prices are set so high they may cover a producer’s full cost of production, essentially guaranteeing that a farmer will profit if yields are average or above average.”
Roberts’ claims were challenged by Georgia Sen. Saxby Chambliss. “We’re not guaranteeing anybody a profit. The 2008 (farm) bill was the most market-oriented bill we’ve ever seen. All you have to do is look at the reaction of the markets to determine that. We’ve had less payments coming out of Washington under the 2008 farm bill than – and I’m certain (of this) without even doing the research – of any other farm bill in recent memory…
“I understand there are different ideas around this table about what’s the best safety net. I encourage my colleagues to recognize that one program doesn’t fit all. A new program, Adverse Market Protection, seeks to serve the needs of those who aren’t protected by the Agricultural Risk Coverage and crop insurance programs.
“It is imperative that the farm safety net provide protection for multi-year price declines, especially for Southern crops like rice and peanuts…
“I’d also like to recognize that the upland cotton policies contained in the chair’s mark represent fundamental reform in the support provided to cotton farmers. (Those) reforms contribute $2.8 billion in savings towards this committee’s budget target.”
Nebraska Sen. Mike Johanns, a former Secretary of Agriculture under President George W. Bush, “fundamentally disagrees with target prices. Congress should get out of the business of setting prices – that’s why we have markets…
“If we keep telling farmers to plant for prices than are higher than the market, or cover the cost of production, even, they will simply respond to that with an end result of (too much acreage in certain crops) and lower prices.”
Johanns went on to praise the bill’s approach to crop insurance and the “tightest AGI and payment limits of any farm bill I’m aware of. It also makes sure that farmers are actively engaged in the farming operation.”
Not only will the Corn Belt be pleased with bolstered crop insurance, farmers there will welcome a new program aiming to help with less severe losses that don’t trigger crop insurance payments.
Cuba, nutrition program spending
Montana Sen. Max Baucus – backed by Arkansas Sen. John Boozman -- offered an amendment regarding cash sales of agricultural products to Cuba. “This issue is politically charged. … My amendment would correct a problem that needs to be addressed and cut through the political stuff. … It’s a no-brainer. It makes sense if we want our farmers and ranchers products to Cuba.”
As expected, debate over nutrition programs produced the most heat. The Senate bill would cut $400 million of the $80 billion spent annually on the SNAP program (Supplemental Nutrition Assistance Program).
Several senators clashed over an amendment that would restore full funding to three nutrition programs.
“To talk about cutting food and nutrition … at this difficult time is inappropriate,” said Massachusetts Sen. William Cowan.
Regarding the food programs, New York Sen. Kirsten Gillibrand said, “Families who are living in poverty – our children, our veterans, our seniors, some of our active duty personnel – are going to suffer if we cut food stamps. I believe we shouldn’t be balancing the debt or deficit on the backs of these hard-working Americans who are just hungry. I think it’s a moral statement and I will fight against any cuts to the food stamp program.”
Due to the tough economy, said Gillibrand, “not only have the number of people coming to food banks – largely driven by families with children – but the amount of food (the banks are receiving) in terms of donations has declined. So, there’s a far greater need with less resources. And the need isn’t being met. Even when we see the unemployment numbers go down, the need for food assistance has not.”
At one point, following Gillibrand’s passionate defense of the nutrition program funding, Roberts suggested she needed to get her “blood pressure” under control.
Chambliss said he was “in sympathy with those who have spoken in favor of restoring” the nutrition program funding. “The food banks in my state are busier than ever.”
In the end, Gillibrand, Johanns, Roberts, South Dakota Sen. John Thune, and Kentucky Sen. Mitch McConnell voted against the 1,000-page bill.
The House Agriculture Committee is set to mark up its own farm bill on Wednesday morning.