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House progresses on farm bill

DANIEL LOOKER Updated: 05/16/2013 @ 9:42am Business Editor

As bitterly divided over food stamp spending as a year ago, the House Agriculture Committee worked halfway through its 576-page farm bill by midafternoon Wednesday. It approved commodity programs that put more emphasis on target prices than the Senate's version, and it agreed to trim spending on the Supplemental Nutrition Assistance Program, or SNAP, by $20.5 billion over the next decade, almost four times the Senate's cut to nutrition spending.

When he opened the markup session, committee chairman Frank Lucas (R-OK) pointed out that the bill, which is called the Federal Agriculture Reform and Risk Management Act of 2013 (FARRM) reforms farm programs and saves another $23 billion. Like the Senate bill, FARRM ends the direct payment program.

"This cut is made while still providing producers a new kind of safety net that allows them risk management choices. I’ve said many times that policy must work for all commodities in all regions," Lucas said. "While I personally do not favor a revenue-style program, it is in the FARRM Act as a choice for producers because some of them believe they can manage their risk better with it."

The ranking Democrat, Representative Collin Peterson (R-MN), said he's more optimistic than a year ago that the committee's bill will come up for a vote on the floor the the House.

"One of the reasons I'm optimistic is that the Speaker of the House has started to lobby people on the dairy program. That tells me he is serious," said Peterson, referring to Representative John Boehner (R-OH). Last year, Boehner called a new dairy program championed by Peterson a "Soviet-style" supply management system.

The force of such lobbying showed early in the debate, when the committee's former chairman, Representative Bob Goodlatte (R-VA), offered an amendment to substitute a USDA-supported margin insurance for a market stabilization bill that Peterson spent four years brokering between dairy interests. Goodlatte's insurance would make payments whenever the difference between feed and milk costs falls below the margin farmers would insure. They could buy coverage for a margin between $4 and $8 per hundredweight in 50-cent increments. But it would not have the supply management component of Peterson's program, which requires dairy farmers in the voluntary program to reduce milk production during periods of low prices and oversupply.

Goodlatte said Peterson's program attempts to manage the milk supply at a time when USDA no longer manages supply of other commodities. And it would create a regulatory burden for milk processors.

"We all agree on the need to reform and improve dairy policies and our amendment would do just that," said Goodlatte.

He was joined by Democrat David Scott of Georgia, who argued that Peterson's dairy program has the potential to add 50 cents a gallon to the price of milk for the poor, as well as adding to the costs of federal nutrition programs.

But Peterson said that existing dairy programs didn't work for farmers when milk prices collapsed in 2009.

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