HARVESTING CASH The Fight Over the Farm Bill

Powerful Interests Ally to Restructure Agriculture Subsidies

By Dan Morgan, Sarah Cohen and Gilbert M. Gaul
Washington Post Staff Writers
Friday, December 22, 2006

There may be no better sign of the changing debate over the nation's farm subsidies: A Midwestern governor running for president calls for cuts in a system that has steered hundreds of millions of dollars a year to his state.

"I didn't get much of a reaction from farmers," said Iowa Gov. Tom Vilsack (D), "because deep down most of them know the system needs to be changed."

Politicians such as Vilsack have joined a host of interest groups from across the political spectrum that are pressing for changes in government assistance to agriculture. They want the money moved from large farmers to conservation, nutrition, rural development and energy research. Vilsack, for example, favors programs that improve environmental practices on farms.

Bread for the World, an anti-hunger organization, has brought religious leaders to Washington to lobby for cuts in subsidies, which they argue can lead to a glut on world markets that hurts poor farmers abroad. The Republican-leaning Club for Growth says subsidies stand in the way of a global trade deal that would help U.S. business. A politically potent coalition of unsubsidized fruit and vegetable growers from California and Florida want their share of the pie. Even the National Corn Growers Association, with 33,000 members, advocates an overhaul.

But these groups will be going up against one of Washington's most effective lobbies as Congress takes up a new farm bill next year.

The farm bloc is an efficient, tightknit club of farmers, rural banks, insurance companies, real estate operators and tractor dealers. Many of its Washington lobbyists are former lawmakers or congressional aides. Harnessed to dozens of grass-roots groups, such as the American Farm Bureau Federation, the National Cotton Council and the USA Rice Federation, farm-state lawmakers -- the "aggies," as they call themselves -- fight with the fervor of the embattled.

About 1.2 million farmers and farmland owners got $15 billion in income support or price guarantees in 2005, according to a Washington Post analysis of Agriculture Department payment records. The benefits are heavily tilted to large commercial farmers growing a few row crops in a handful of states. But the money also is widely distributed to a middle group of more than 130,000 farms, each receiving $25,000 to $100,000. The federal dollars ripple through local economies, adding to purchasing power at stores and businesses -- and creating a political constituency for the programs.

The farm bloc, says former congressman Cal M. Dooley (D-Calif.), now an executive with a food industry trade group, is "committed and focused."

Opening Loopholes

Ever since subsidies began in the New Deal, Farm Belt politicians from the Dakotas to the Gulf of Mexico have worked to expand the payments. They have repeatedly thwarted efforts to scale subsidies back by trading political favors, manipulating the USDA or strong-arming opponents.

In 1987, for example, Congress tried to close loopholes that allowed larger farms to exceed the limit on how much each could receive in annual federal payments. Some set up complex legal structures, such as dividing a single farm into many paper corporations, each eligible for the maximum payment. Congress decided that to get the money, a farmer or partner would have to be "actively engaged" in farming.

Lawmakers left it to the USDA to define active engagement. It proposed a standard of 1,000 hours a year spent managing the farm. But the language was drastically watered down after an objection from Rep. Thomas J. "Jerry" Huckaby (D-La.), then head of the subcommittee overseeing the rice program.

"We got direction from the author of the bill that what we were putting in the regulations was not what they intended," said former USDA official William Penn, referring to Huckaby. At the USDA, Penn drafted rules for complying with the legislation.

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