The House Agriculture Committee on Thursday unveiled a draft of its long-term farm policy bill, calling for much deeper cuts to the federal food stamp program than a Senate-passed version while modifying some of the Senate’s proposed commodity reforms, including restoring target prices sought by Southern growers.
The legislation has loomed as a test for lawmakers from rural states who may otherwise cast themselves as budget-cutters, but may be reluctant to go after farm subsidies, even amid near-record farm profits. Committee consideration is set to begin on Wednesday of the draft bill released by Chairman Frank Lucas, R-Okla., and ranking member Collin Peterson, D-Minn., which would set policy for agriculture programs for a five-year period. The current bill expires Sept. 30, and it’s uncertain whether the two chambers will be able to resolve differences by then.
Scoring of the House bill by the Congressional Budget Office estimates that enacting this proposal would reduce direct spending by $35.1 billion over the 2013-2022 period—more than $11 billion over the cuts found in the nearly $1 trillion Senate bill approved last month in a 64-35 bipartisan vote.
The Senate bill would reduce overall spending for farm subsidies, food stamps, crop insurance, and conservation programs by about $23.6 billion over 10 years.
The draft House bill would achieve larger savings mostly through a $16 billion cut from the Supplemental Nutrition Assistance Program, formerly known as food stamps, which makes up nearly 80 percent of the Agriculture Department’s spending under the bill. But Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., has called such an approach unacceptable. The Senate bill targets only about $4.5 billion in savings from food stamp costs through the next 10 years.
Like the Senate bill, the House proposal seeks generally to replace the nearly $5 billion in yearly fixed, direct grower payments and countercyclical farm programs (to compensate for when market prices are lower than the targets fixed in the bill) with an expanded crop-insurance program.
But the draft House bill also would modify the Senate’s approach on these commodity reforms amid complaints, mainly from Southern growers, that it favors profitable Midwestern corn and soybean farmers who do not depend on direct subsidies as much as rice and peanut farmers in the South do.
Changes the House would bring include giving farmers a one-time choice between a program to cover shallow losses or a new target price option that would use such measures as yield plugs and an index of below-cost-of-production prices as a benchmark in establishing multi-year price declines, which is not covered in crop insurance. The latter would require a producer to experience at least a 15 percent loss, helping ensure that all risk is not removed from farming and that no growers are guaranteed profits.
A summary of the draft bill also states that it repeals or consolidates more than 100 programs, including reducing 24 conservation programs to 13, at a savings to taxpayers billed as more than $6 billion.
The draft bill also would offer a voluntary program for dairy producers intended to help them better manage risk when milk prices and feed costs converge. Producers who sign up for the margin program would be subject to supply management controls, wherein proceeds of milk sales normally received by the producer would be reduced when they exceed a percentage of their designated base. Funds collected by this program will be used by USDA to purchase surplus dairy products for donations to food banks and other programs.
“Our efforts over the past two years have resulted in reform-minded, fiscally responsible policy that is equitable for farmers and ranchers in all regions and will lead to improved program delivery,” Lucas said in a statement.
Added Peterson, “There will be challenges ahead, but we will pass the bill out of Committee next week and, if the House leadership gets this right and brings the bill to the floor, we will ultimately finish the bill in September.”