Aug 15, 2007

House Passes Farm Bill With the Old Warts Intact

Fruit and vegetable industry leaders proudly grabbed their $1.6 billion bone and ran off to chew on it, but many others are coming to think this “new” Farm Bill is a rotting carcass that needs to be quickly buried or disinfected by the Senate.

By a vote of 231 to 191, the U.S. House of Representatives passed its version of the next Farm Bill on July 26.

Total spending would be $286 million over five years, split in a way that funnels $30 billion a year to food stamp recipients and $20 billion a year to farmers in the form of direct payments. Those are rough numbers.

The U.S. Apple Association (USApple) hailed it as “a historic victory for the apple industry and other fruit and vegetable growers who have worked tirelessly for more than two years urging Congress to recognize the importance and challenges facing the specialty crop industry.”

A new horticulture title includes more than $1.6 billion to give specialty crop producers “strong tools to increase competitiveness and reduce costs,” in the words of Nancy Foster, president of USApple.

The American Farm Bureau was similarly enthusiastic. It called the bill “skillfully crafted” and said it “establishes a new benchmark for reform while retaining a viable economic safety net for America’s farmers and ranchers.”

Others were less laudatory.

“Meet the new Farm Bill, same as the old Farm Bill. Today, the House forced through a Farm Bill that retains a hefty safety net for millionaire farmers,” said Ryan Alexander, president of Taxpayers for Common Sense.

He chided the Democrat-led House and Speaker Nancy Pelosi, who called the bill “a landmark achievement.” Ryan called it “a carbon copy of the 2002 DeLay-Combest corporate Farm Bill that suckered taxpayers to the tune of tens of billions of dollars a year.”

Fellow Democrats accused Pelosi of abandoning her demands to reform the subsidies in favor of protecting potentially vulnerable freshman Democrats from rural districts.

Pelosi replied that the bill’s positives included ending subsidy payments to farmers earning more than $1 million a year, creating support for fruit and vegetable growers, increasing money for nutrition and land conservation and energy programs such as researching alternative fuels like cellulose-based ethanol.

The bill provides more funding for food stamps than farm subsidies, increasing the amount to $30 billion a year and changing its name to “the Secure Supplemental Nutrition Assistance Program.”

The bill also includes the mandatory implementation of Country of Origin Labeling for fruits, vegetables and meat – a provision Congress passed some years ago that was never fully implemented. COOL would be implemented next year under this bill.

Despite some “good stuff,” there is no doubt U.S. farm law has shifted over time. What used to be an effort to save family, yeoman farmers from low farm prices has become a subsidy program for large landowners who have historic claims based on five program crops they grow or grew. Increasingly, the payments have been tied less to farm prices or production and more to farm history. It’s on autopilot.

As one critic put it, the $1 million payment limit for farm subsidies seems rather high, since most welfare payments stop when families earn more than $20,000 a year. “Reformers” want to reduce the farm payment limit to $250,000.

Whether any actual reform takes place in the Senate is anybody’s guess. The American Farmland Trust, which makes the logical case that farmers should get government money for doing worthwhile things like preserving and conserving their land resource, is backing a complicated countercyclical plan that would use private crop insurance plus disaster payments to help farmers achieve level farm income year to year, where price and yield would factor into the equation.

For reasons that are not clear, the dialogue this year never heated up and the Farm Bill generated neither heat nor light as it flowed through the House. This, despite two important things:

First, farm commodity prices are up. Food prices are up. The new ethanol connection has nearly doubled the price of corn, soybeans are near $8 a bushel and wheat is nearly $6 a bushel – twice historic levels. Meat and milk prices are good. While this reduces farm subsidy payments somewhat, prices and payments have been largely decoupled since the 2002 farm law passed.

Second, information now available to every person puts a real face on the subsidies. It’s the face of your neighbor. Because of Ken Cook at Environmental Working Group, you can go to his Web site, www.mulchblog.com, type in a name or a zip code, and find what every one of your neighbors got in farm payments in 2003, 2004 and 2005.

In my county, you can’t find farmland to rent or buy, but the man who can and does got $468,000 over those three years. People notice that. It causes resentment.

The 2007 Farm Bill is expected to be considered by the Senate Agriculture Committee in September, followed by Senate floor action and a House-Senate Conference Committee to resolve differences between the House and Senate bills.

This Congress, the approval rating of which is plunging daily, may not generate anything to resolve.