Senate Panel Moves $288 Billion Farm Bill

By Dan Morgan
Special to The Washington Post
Friday, October 26, 2007

The Senate Agriculture Committee, under pressure to make changes in decades-old subsidy programs, voted yesterday to offer farmers an alternative safety net that lawmakers said will provide better protection against falling incomes and will save as much as $4 billion over the next five years.

Farmers who choose the plan would get a government payment on a portion of their acreage if average crop revenues in their state fall below a historic norm because of low prices or bad weather. But to get the coverage, farmers would have to forgo several supports that have been pillars of farm programs for years.

Although still modest in scope, the plan was adopted only after fierce infighting involving farm groups and industries affected by the vast agricultural subsidy system. The committee, dominated by lawmakers representing traditional farming interests, backed away from a more far-reaching plan supported by Midwest corn growers after strenuous objections from the private crop-insurance industry and some farm organizations.

Sen. Pat Roberts (R-Kan.), who led the fight to scale back the plan, called it "a pretty good compromise." But Sen. Max Baucus (D-Mont.), reflecting the concerns of a dry wheat state where farming is inherently risky, warned that the committee was still moving too fast. "We could be buying a pig in a poke here," he said.

The plan is part of a $288 billion, five-year farm bill that also provides additional funding for the food stamp program, conservation, the fruit and vegetable industries, and the cleanup of the Chesapeake Bay. The sprawling legislation covers agricultural concerns from cutting-edge research on new biofuels to fish farming, which the bill makes eligible for a special government insurance program for the first time.

The House has already passed its version of the legislation.

Undersecretary of Agriculture Mark E. Keenum said yesterday that the Senate version is being studied carefully. But he added that the administration is "very pleased" that it includes the new revenue safety net. That is in addition to a proposed $5 billion trust fund to help farmers and ranchers hit by weather-related disasters.

The proposed plan, known as Average Crop Revenue (ACR), attempts to address concerns that existing farm programs often pay farmers in bumper years but fall short when revenues plunge because of bad weather or other factors.

Farmers now buy private crop insurance that covers them if overall incomes tumble due to crop failure. The federal government pays part of the premiums, which have been rising.

The ACR plan initially put forward by Agriculture Committee Chairman Tom Harkin (D-Iowa) would have allowed farmers to insure part of their farm revenues directly through the government, costing private crop insurance companies an estimated $2.2 billion over five years, according to the Congressional Budget Office.

Along with an outcry from the industry, Harkin's plan ran into objections from Western senators who feared that insurance costs would rise as corn growers in the rainy Midwest shifted to the government plan.

"The option . . . creates a potential battle within agriculture we can ill afford at this time," the American Farm Bureau Federation president, Bob Stallman, warned Monday.

The compromise leaves the crop insurance program essentially unchanged.

"This thing came out of nowhere at the last minute and had a lot of warts on it," said Michael R. McLeod, executive director of the American Association of Crop Insurers. The compromise deal, he said, "approached it on a more gradual basis, and this is the right way to go."

Morgan is a contract writer for The Washington Post and a fellow with the German Marshall Fund, a nonpartisan public policy institution.

© 2007 The Washington Post Company