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Senate Committee advances farm bill

DANIEL LOOKER 05/13/2013 @ 11:00pm Business Editor

By a vote of 15-5, members of the Senate Agriculture Committee approved a farm bill Tuesday that is projected to save almost $24 billion in federal spending over a decade. It continues some of last year's reforms, including ending the direct payment program in the bill's commodity title.

Unlike the 2012 version, this year's bill includes a target price program designed mainly for rice and peanut farmers. And it will require farmers to have conservation plans in order to be eligible for crop insurance premium subsidies, something not in the committee's bill a year ago. (The full Senate later added that as an amendment to a bill that ultimately died before the election.)

Tuesday, several midwestern Republican senators, including Pat Roberts of Kansas and Mike Johanns of Nebraska, objected to the bill's new adverse market payment (AMP) program that re-establishes a target price program. AMP boosts the target price for peanuts by 27% from the level of the old counter-cyclical program in the 2008 farm bill. And it raises the rice target price by about 6%.

The two, along with Senator John Thune (R-SD) backed several amendments to narrow the AMP program, by taking other commodities out of it and by putting the the price for AMP back to the 2008 level for rice and peanuts. Along with Senate Minority Leader Mitch McConnell (R-KY) they voted against the committee bill after a morning of debating amendments. Senator Kirsten Gillibrand (D-NY) who opposed food stamp cuts in the bill, was the other no vote.

Roberts and Johanns described the AMP program as old policy that puts USDA in the position of influencing prices.

"As it stands at this point today, this is not a reform bill," Roberts said at the beginning of the markup session. "This is a rearview mirror bill."

And, they said, AMP risks challenges as trade distorting policy under the World Trade Organization, where the Brazilian government has already won a case against U.S. cotton subsidies.

Johanns, who served as Agriculture Secretary under President George W. Bush, supported an amendment by Thune to limit the AMP program to rice and peanuts.

"Take soybeans and corn and wheat out of this. I think there's going to be a WTO challenge to this," Johanns said. He said that the U.S. is already paying the Brazilian government millions of dollars annually after losing the cotton case. "I think this is just begging for additional litigation."

Roberts also pointed out that the Senate's version of a target price program already has a rolling average price benchmark for other crops that make it unlikely farmers will get many payments. But the House Agriculture Committee's bill has a target price program and when the two bills are put together by a conference committee, Roberts expects pressure to raise target prices.

Thune  offered another amendment to require that the base acres for rice be updated, which he said would save about $1 billion more over the next 10 years.

Roberts said that because AMP payments are made on a crop's historical base, that estimate of $1 billion in savings means that AMP payments will be going to farms that no longer grow rice.

Speaking against Thune's amendment, Senator John Boozman (R-AR) said that if it passed, he would urge that other crops be required to have updated bases as well.

All of the amendments to shrink the AMP program were defeated by a coalition of the committee's Democratic majority and southerners like Boozman and the ranking Republican, Thad Cochran of Mississippi.

After the committee vote, Chairwoman Debbie Stabenow (D-MI) said "the discussion was not surprising."

When asked if the debate Tuesday suggested she'll have difficulty getting enough votes for the bill on the floor of the Senate, she said, "I'm absolutely confident we'll have a strong majority."

Cochran, for his part, said he was pleased that Stabenow had worked to satisfy regional differences in the farm bill.

"In the lower MIssissippi valley, agriculture is the most important economic activity there is," he said.


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