Senate's Farm Bill Includes $10 Billion in New Aid
Tuesday, November 13, 2007
Thanks to the application of a little last-minute budgetary magic, the farm bill before the Senate this week authorizes about $10 billion in new subsidies, price guarantees and disaster aid in the next decade, even as farmers report near-record profits.
There is a new $5.1 billion "disaster trust fund," as well as a revenue insurance program that would increase taxpayer costs by $4.7 billion over 10 years, according to the Congressional Budget Office. Spread through the huge bill are gains for producers of wheat, milk, sugar, peanuts, barley, oats and honey, and a new $1 million-a-year subsidy earmarked for camelina, a seed used to make biofuels.
"Pretty much everywhere you look, farm subsidies are being increased," said Daniel A. Sumner, an agricultural economist and adjunct scholar at the American Enterprise Institute, a conservative think tank.
Few predicted that outcome a few months ago.
Fiscal conservatives and a broad coalition of farm program critics were primed to pare back the subsidies. President Bush, stung by a barrage of criticism after he signed a 2002 farm bill laden with billions of dollars in new subsidies, was on the side of the reformers.
Worse, from the perspective of the farm bloc, Congress's new Democratic leadership reinstituted "pay-as-you-go" budgeting, which barred new spending that increases the fiscal deficit.
"It's made it much more difficult," Senate Agriculture Committee Chairman Tom Harkin (D-Iowa) grumbled in September. "There's very little left for a lot of things."
But in a surprising turnabout engineered by key farm-state lawmakers, the bill on the Senate floor builds strongly on the price guarantees and supports included in the controversial 2002 legislation, which authorized $73 billion more in subsidies, food stamps and other agriculture-related spending. The Senate bill is more generous than a House version that passed in July.
To Sen. Judd Gregg (R-N.H.), a longtime critic of the program, this year's bill marks a "continuum" with the past rather than a change in direction.
"The farm program is agriculture's answer to 1930s socialism," he joked last week. "It's commissar policy."
One innovation would pay farmers $15 a year for each eligible acre -- whether they plant anything or not -- while guaranteeing them an additional payment if crop revenues in their state fall short of the norm.
Farmers choosing the program, which would start in 2010, would no longer be eligible for traditional farm subsidies. But budget officials predict that tens of thousands of farmers growing corn, wheat or soybeans will opt for it because traditional payments stand to be sharply reduced in coming years because of higher commodity prices.