Senate's Farm Bill Includes $10 Billion in New Aid

The plan is backed by the National Corn Growers Association and is sponsored by Sens. Richard J. Durbin (D-Ill.), Sherrod Brown (D-Ohio) and Harkin.

In a Nov. 1 estimate, the Congressional Budget Office (CBO) determined that the program would reduce government costs by $2.4 billion between 2008 and Sept. 30, 2017 -- the official window for judging whether a program conforms to the pay-as-you-go budget rules.

Those savings would occur because farmers enrolling would forgo traditional federal price guarantees and direct payments during the budget window.

But the CBO said that about $11 billion in revenue-guarantee payments would be made after the 2017 cutoff date. So instead of reducing expenditures, the new program would actually cost $4.7 billion, after some delayed savings are factored in.

"Unfortunately, it's a tried-and-true gimmick because of how CBO counts," said Steve Ellis, vice president of Taxpayers for Common Sense. "The only change in this farm bill is they're getting more money than they got before."

Harkin himself has criticized another major new program included in the Senate version of the bill, a $5.1 billion, five-year trust fund to cover weather losses of farmers and ranchers.

The costs of the disaster program and other new farm bill initiatives would be offset in part by tightened tax rules on business. The tax changes, which would raise at least $15 billion in new revenues through 2017, were approved last month by the Senate Finance Committee and then attached to the farm bill to meet budget requirements.

The disaster fund has been a priority for Finance Committee Chairman Max Baucus (D-Mont.) and Sen. Kent Conrad (D-N.D.), whose dry Western states are plagued by droughts and other natural disasters. But acting Agriculture Secretary Charles F. Conner last week blasted the Senate for "asking other sectors to bear the costs" of the farm bill.

Meanwhile, a wide range of commodity interests also stands to benefit from the Senate bill.

Sugar beet and sugar cane growers would get a new program aimed at protecting their share of the U.S. market in the face of an expected surge in Mexican imports. The 10-year cost: about $1.3 billion.

Tucked into the measure is good news for the companies that store and handle the South's peanut crop. The bill partially reinstitutes a program that was discontinued in 2006, allowing the companies to bill the government for some costs they incur under the federal price-support program. The CBO has set a $175 million, 10-year price tag on that.

According to records provided to The Washington Post by the Department of Agriculture, peanut warehousing is dominated by two large corporations that in the past received about half the federal storage payments. They are Virginia-based Birdsong and a joint venture between agribusiness giant Archer Daniels Midland and a Swiss partner.

The Senate version of the bill also continues a special break for peanut growers that was included in the 2002 legislation. Diversified farmers can keep collecting federal peanut subsidies even after they have reached the subsidy limit on their other farming operations.

Last week, Sen. Saxby Chambliss (Ga.), ranking Republican on the Agriculture Committee, fired back at critics of farm program spending, noting that commodity programs now claim only a 14 percent share of the $288 billion Senate bill, half the share of five years ago.

"There is a significant reform just in terms of pure dollars," he said.

Budget analysts say that is due less to declining spending on farmers than to runaway growth in the food stamp program, which is also funded in the bill. The number of recipients has jumped from 19 million in 2002 to nearly 27 million, boosting 10-year cost estimates by almost $200 billion.

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