Farmers face squeeze in proposed cuts
WASHINGTON — A program that puts billions of dollars in the pockets of farmers whether or not they plant a crop may disappear with hardly a protest from farm groups and the politicians who look out for their interests.
The Senate is expected to begin debate this week on a five-year farm and food aid bill that would save $9.3 billion by ending direct payments to farmers and replacing them with subsidized insurance programs for when the weather turns bad or prices go south.
The details are still to be worked out. But there’s rare agreement that fixed annual subsidies of $5 billion a year for farmers are no longer feasible in this age of tight budgets and when farmers in general are enjoying record prosperity.
About 80 percent of the bill’s half-trillion-dollar cost over the next five years represents nutrition programs, primarily food stamps now going to some 46 million people. About $100 billion would be devoted to crop subsidies and other farm programs.
The Senate Agriculture, Nutrition and Forestry Committee last month approved a bill that would save $23 billion over the next decade by ending direct payments and consolidating other programs. The bill would strengthen the subsidized crop insurance program and create a program to compensate farmers for smaller, or “shallow,” revenue losses, based on a five-year average, for acres actually planted.
Getting a bill to the president’s desk will be a challenge. Most of the bill’s spending is on the Supplemental Nutrition Assistance Program, or food stamps, at an annual cost now of about $75 billion. The Republican-led House is looking for greater cuts to this program than the Democratic Senate will accept.
The House also is more sympathetic to Southern rice and peanut farmers who say that shallow loss program hurts them. They want to keep some form of target price subsidy.
The current farm bill expires at the end of September.
But the Senate bill, and presumably the yet-to-be-written House counterpart, “makes clear that the era of direct payments is over,” said Democratic Sen. Debbie Stabenow of Michigan, who heads the Senate committee. She said the Senate bill “represents the most significant reform in American agriculture policy in decades.”
The White House, which also is pushing for the end of direct payments, says more than 50 percent of the subsidies go to farmers making more than $100,000 in income.
Direct payments are only one of several ways the government ensures that farmers are protected from falling prices or weather disasters. The Congressional Research Service estimates that under current law, the government will spend $5.7 billion a year on commodity programs, including direct payments, along with $1.5 billion a year on disaster aid and $9 billion a year to subsidize crop insurance.