Members of the House and Senate will start formal negotiations on a wide-ranging farm bill this week. A look at some of the issues they will be talking about:
OVERALL COST: Current farm and food stamp spending is around $97 billion a year, with about 80 per cent of that money going to food stamps. The Senate bill would save about $1.8 billion a year, while the House bill would save around $5.2 billion a year.
FOOD STAMPS: Food stamps, now known as the Supplemental Nutrition Assistance Program, or SNAP, for decades have been part of the farm bill in an effort to attract urban lawmakers’ votes for rural programs. The Senate farm bill would cut about $400 million from the almost $80 billion annual total by targeting states that give people very small amounts of heating assistance so they can automatically qualify for higher food stamp benefits. The House bill would cut $4 billion yearly by making similar changes and eliminating “broad-based categorical eligibility,” or automatic food stamp benefits when people are signed up for certain other programs. The House bill would also allow states to create new work requirements and end government waivers that have allowed able-bodied adults without dependents to receive food stamps indefinitely. Senate Democrats have opposed all of those major changes to the program.
DIRECT PAYMENTS: Direct payments, farm subsidies that cost the government almost $5 billion annually, would be phased out in both bills, with the savings split between other subsidy programs and deficit reduction. Direct payments have been controversial because they are paid out every year regardless of crop prices or crop yield. The Senate bill would eliminate the program immediately, while the House bill would phase it out over the next two years for cotton farmers who rely on the program.
CROP INSURANCE: Both bills would increase subsidies for federally subsidized crop insurance and create a new crop insurance program that covers small revenue losses on planted crops. This revenue protection program favours Midwestern corn and soybean farmers and would be more generous in the Senate bill. The Senate bill also includes language that would lower government crop insurance subsidies for the wealthiest farmers — an amendment added on the Senate floor over the objections of Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich. In addition, the Senate bill includes language that would require farmers who get crop insurance to comply with certain environmental standards. House Agriculture Committee leaders are firmly opposed to that provision.
PRICE PROTECTION: Both bills would raise “target prices” for some crops. Certain subsidies kick in if prices drop to those targets, meaning farmers will only receive the subsidies if prices are low. While many of these programs haven’t been used for the past several years because crop prices have been at unprecedented highs, these subsidies exist as a safety net. Both the House and Senate bills would raise target prices for rice and peanuts, since those also often depend on direct payments that would be eliminated. The House bill would raise those target prices higher than the Senate bill would, making it easier for the subsidies to kick in.
DAIRY SUPPORTS: Both the Senate bill and the House committee-passed bill included a dairy overhaul that would create new insurance for dairy farmers and also a stabilization program that could dictate how much milk is produced. But the House passed an amendment backed by Speaker John Boehner, R-Ohio, that would eliminate the stabilization program. Boehner has called the program “Soviet-style,” but supporters say it is needed to avoid overproduction if milk prices drop as they did in 2009.