By Alec MacGillis
Washington Post Staff Writer
Sunday, August 22, 2010; A04
The Obama administration is seeking $1.5 billion in disaster relief for farmers, a move that could boost the reelection prospects of Sen. Blanche Lincoln (D-Ark.) but that critics say circumvents established procedures.
Lincoln, the chairman of the Agriculture Committee, has been seeking relief for rice and cotton farmers hurt by heavy rains that struck Arkansas, Mississippi and Louisiana last fall. She sought to include $1.1 billion in aid for those states, along with $400 million for farmers elsewhere, in a small-business bill that Democrats are trying to pass.
To improve the bill's prospects, Senate leaders asked Lincoln to withdraw the $1.5 billion, with White House Chief of Staff Rahm Emanuel pledging that the government would provide it separately. Robert L. Nabors II, acting deputy director of the Office of Management and Budget, followed up in an Aug. 6 letter to Lincoln: "I want to assure you that the Administration is committed to providing assistance consistent with your legislative proposal by the end of this month."
But the administration is still looking for the money. "We are working to identify administrative authorities and funding," OMB spokesman Kenneth Baer said last week. And the deal is coming under widespread criticism.
Black lawmakers note that the administration and Congress have yet to come up with $1.2 billion owed black farmers under the settlement of a major discrimination lawsuit. Republicans say there is no money for the request. And groups opposed to farm subsidies say it would shower money on large farms that suffered few losses and undermine the relief policies established by the 2008 farm bill.
"The whole debate in 2008 was that we were going to put an end to this ad hoc stuff," said Ken Cook, president of the Environmental Working Group. "If they want to hold on to any principle, we ought not to be writing checks from the treasury every time someone asks."
Agriculture Committee spokeswoman Courtney Rowe responded to questions with a brief statement. "Chairman Lincoln is actively working with both [the Department of Agriculture] and OMB on the details of the disaster assistance and is confident that she will be able to announce them before the end of the month," Rowe said.
After Lincoln trumpeted the White House's pledge, her Republican opponent, Rep. John Boozman, who has a wide lead in Arkansas polls, called it an attempt "to bail out somebody who's in a difficult election by somehow coming up with money that there are real questions about whether they have the authority to do it."
Underlying the dispute is the effort to make the $20 billion farm subsidy program more need-based and less abuse-prone. The 2008 farm bill sought to replace improvised payments with a new program, Supplemental Revenue Assistance Payments (SURE), under which farmers in disaster areas would receive standard, formula-based payments.
Farmers must have crop insurance to qualify, a rule meant to encourage them to buy coverage, which is itself heavily subsidized by the government. But many farmers in the South have not signed up for coverage, possibly because disaster policies are tailored mostly to drought, which is less of a threat in the South than in some other regions.
To show precedence for Lincoln's proposal -- which would not require farmers to have insurance -- the Agriculture Committee produced a list of 19 instances of ad hoc farm relief between 1999 and 2006. Several are controversial, such as a $940 million livestock compensation program in 2002 that paid ranchers and dairy farmers based on the size of their herds, not their losses.
Critics say Lincoln's request would produce similar inequitable results while undermining the case for crop insurance. They note that it would require farmers to demonstrate only a 5 percent crop loss, far less than the usual 30 percent trigger, and hardly bigger than the variations many farms normally experience. They also note that relief payments would be based not on the size of the loss but on the size of a farm's usual subsidy.
Farmers meeting the 5 percent threshold would receive relief equal to 90 percent of their regular subsidies. As a result, a large farm claiming a 5 percent loss would receive hundreds of thousands of dollars, and a small farm claiming a much bigger loss would get far less.
The Environmental Working Group calculates that the payments to Southern farmers would total $1.6 billion, not $1.1 billion, of which $210 million would go to Arkansas, with 270 farms in the state eligible for more than $100,000 each. The group identifies five large farms in Arkansas and Louisiana that would get at least $500,000 each, with the largest getting nearly $800,000, on top of the $874,000 in regular subsidies it received in 2009.
Campaign finance documents show that an ownership partner of one of the five farms, Balmoral Farming Partnership, gave Lincoln's campaign $1,000 campaign in December.
The chairman of the House Agriculture Committee, Democrat Collin C. Peterson (Minn.), a staunch supporter of farm subsidies, has expressed ambivalence about the payments. "My staff tells me there is no way they can do this administratively," he told AgWeek. "I don't know what the heck Rahm was talking about."
Agriculture Secretary Tom Vilsack also voiced doubt last week. "Obviously . . . it's a little complicated because there's not a direct congressional directive. There's not a law. There's not a specific program," he said, according to DTN, a farm policy journal. "The question then becomes how, if you were to do what she's asking us to do, if we were to do it, how would you do it in a way that would reinforce crop insurance and the SURE program? That's part of what we are trying to figure out right now. I don't think we quite have it figured out yet."