A New Subsidy Takes Root
Friday, May 12, 2006
Congress and the administration are engaged in a bitter fight over a $1.5 billion assistance package for farmers that senators tucked into a $109 billion war and hurricane-recovery spending bill last week.
The new subsidy -- aimed at mitigating the impact of severe weather conditions and rising energy prices -- would primarily help farmers in the Midwest and Southeast who already get subsidies from the federal government for growing crops such as wheat, grain, rice and corn. Fifty-four large crop operations would collect more than $100,000 each under the proposal, according to an analysis by the advocacy organization Environmental Working Group, with one Louisiana farm receiving an extra $201,000.
The feud, which pits a bipartisan coalition of lawmakers from farm states against the White House and several public watchdog groups, may be a harbinger of a fight in 2007 over the annual farm bill that shapes agricultural policy. Many farmers say they are under severe economic pressure, but critics say the current system provides major financial benefits to a small number of players.
Rep. Jerry Moran (R-Kan.) -- whose constituents would receive $75.2 million, more than any other congressional district -- said the aid is essential to many farms.
"Agriculture is one of the most energy-intensive industries, and they have the least ability to pass that on to consumers. . . . The result is many farmers will be out of business absent some kind of help," Moran said, acknowledging that several colleagues view the subsidy with skepticism. "They ask, 'Why would we help just farmers?' "
Farmers who would receive the subsidy said they need the money. Jason Condrey, a partner in a 17,000-acre family farming operation in Louisiana that would get more than $143,000 under the legislation, said his fertilizer costs have nearly tripled over the past three years because of higher gasoline prices, and irrigation costs have forced him to cut back on rice growing and hurt his profits.
"These prices are so high, they're affecting decisions on how we farm," Condrey said.
But the administration and advocacy groups have blasted the proposal, which is part of a larger, $4 billion disaster relief package for farmers. Senate and House negotiators will decide in coming weeks whether to jettison the provision or risk a presidential veto.
Agriculture Department spokesman Ed Loyd said farmers did not even have to show financial losses to receive the new subsidy, and the money would go to 39 percent of the nation's farms. "That isn't equitable, and we don't support that," he said. "It essentially says to 60 percent of farms, 'You just don't get anything.' "
Environmental Working Group President Ken Cook noted that the $1.56 billion proposal would come on top of $5.2 billion in fixed direct payments these growers already receive. Balmoral Farming Partnership in Newellton, La., which had $750,000 in sales last year, would get $201,000 in new federal aid on top of its $670,000 annual subsidy, more than any other farming operation under the proposed new subsidy.
Cook said Democrats and Republicans reap political benefits by catering to agriculture. Sen. Kent Conrad (D-N.D.) originally sponsored the provision and Sen. Byron L. Dorgan (D-N.D.) offered it in the Appropriations Committee. Sen. Conrad Burns (R-Mont.), who faces a tough reelection race this year, strongly backed it.
"It's an easy way they can say to their constituents, 'That $900 check you got for energy was because I pushed Bush to do it,' " Cook said.
Conrad countered in an interview that his detractors do not understand global agriculture, where European farmers receive subsidies that are five times as high and Brazil is outpacing the United States in commodity sales. On his last visit home, Conrad said, "I had three farmers tell me they're all done, they can't take it anymore."
Rep. Collin C. Peterson (D-Minn.), who said the subsidy is aimed more at rising irrigation costs than gasoline prices, added that Republicans who are afraid to take on the president over the issue may very well pay a price in November. He and other members of the House Agriculture Committee held a hearing in San Angelo, Tex., Tuesday where farmers voiced support for the bonus, but Texas Republicans have not endorsed the plan.
"They're apparently staying off because of the president," Peterson said. "I think they do that at their political peril."
"The fight is on," said Rep. Earl Pomeroy (D) of North Dakota, where farmers' profits have dropped by an average of $18,000 because of higher fuel costs, according to a North Dakota study.
Researcher Rena Kirsch contributed to this report.