Ag Policy Blog

WASHINGTON (DTN) ---- 9: 30 p.m. After hearing testimony much of the day on amendments for the farm bill, the House Rules Committee was not coming back quickly Tuesday night with details on which amendments would be debated on the floor.

However, House Agriculture Committee Chairman Frank Lucas finally got to deliver the speech introducing the farm bill for debate and eventual vote later this week.

Lucas, a Republican from Oklahoma, said the farm bill, called the Federal Agriculture Reform and Risk Management Act of 2013, would cut nearly $40 billion off projected spending over the next decade.

"The FARRM Act is a different farm bill for different times," Lucas said."There is a reason we put reform in the title. This is the most reform-minded bill in decades. It repeals outdated policies while reforming, streamlining, and consolidating over 100 government programs. It reforms the SNAP program – also known as the food stamp program - for the first time since the welfare reforms of 1996. And, it makes tremendous reforms to farm programs."

As Lucas and other House Ag Committee members praised the farm bill on the floor, the House Rules Committee spent the afternoon and evening plowing into through 229 amendments and testimony from congressmen explaining why their amendments deserves a vote on the floor.

Committee ranking member Collin Peterson, D-Minn., said on the floor the bill is a compromise that reflects bipartisan work in the committee. "It is a compromise between commodities and regions, and urban and rural members. I didn’t get everything I wanted. Chairman Lucas didn’t get everything he wanted, but that’s how the legislative process is supposed to work."

Peterson also noted the division among Democrats who are opposed to cutting $20.5 billion from the Supplemental Nutrition Assistance Program -- known traditionally as food stamps --- cuts projected to trim 2 million people off the SNAP rolls over the next decade. "While I think it’s ridiculous to cut hundreds of billions of dollars, as some members have called for, it’s also just not realistic to refuse to cut one penny from these programs," Peterson said. "I do believe that we can make some reasonable, responsible reforms and, at the end of the day, find some middle ground that will allow us to complete our work on this bill."

Still, other Democrats took to the floor in general speeches and on C-SPAN to criticize the SNAP cuts, led largely by Reps. Jim McGovern of Massachusetts and Rosa DeLauro of Connecticut. McGovern noted a high percentage of people on SNAP work, but earn so little they qualify for food aid.

"Rather than going after this program, and WIC (Women and Infant Children) and SNAP, and programs to help poor people, we ought to be talking about how to end hunger now," McGovern said.

DeLauro, on the floor and in committee, questioned why lawmakers emphasize finding more waste, fraud and abuse in SNAP programs, but not targeting waste, fraud and abuse in other farm-bill programs such as crop insurance.

Lucas sought to highlight the need to balance cuts in all the programs under the House Agriculture Committee jurisdiction. He noted some of the changes are modest, such as adjusting the way states can qualify people for SNAP. One change requires that a person qualify for $20 of low-heating assistance from states rather than just $1 to qualify for SNAP enrollment.

"The goal if the committee was never to wish hardship on anyone," Lucas said.

Many of the proposals in the Rules debate affecting the farm economy would dramatically shift costs for crop insurance, farm programs for dairy and sugar farmers, and lower the amount of corn-based ethanol allowed under the Renewable Fuels Standard.

Leading off, Rep. Bob Goodlatte, R-Va., championed his amendment with ten other congressmen to eliminate the dairy supply provisions in the committee bill and replace it with a margin insurance program. Goodlatte's amendment failed in the committee, but the dairy reform measures in the bill are among some of the most divisive changes in the farmer safety net. Goodlatte noted the market stabilization program would attempt to manage the U.S. milk supply, leading to higher prices for consumers. Goodlatte and others would rather provide a margin insurance program for farmers ranging from $4 to $8 per cwt.

Goodlatte and others also advocated overhauling the sugar program, which is now built largely on import quotas and tariffs. Goodlatte said the current sugar program, while costing minimal in taxpayer costs, actually cost consumers $3.5 billion annually in higher food costs. "We must request reform of this outdated program," Goodlatte said. Sugar has been an area of debate in both the House and Senate, but attempts to eliminate the current sugar policies have generally failed. Still, a comparable sugar-reform bill had 90 sponsors.

Goodlatte and Rep. Peter Welch, D-Vt., also are spearheading another amendment that would modify the way the Renewable Fuels Standard operates. They each criticized the RFS for now consuming more than 40% of the corn crop to produce ethanol (without factoring in distilled grains). Their amendment would require the EPA to lower the RFS if corn stocks reach a below a certain threshold. Goodlatte noted that if the provision were in effect today, then the RFS for 2013 would be 25% lower than it is now.

"The RFS is really hurting our farmers," Welch said. "Dairy farmers, one of the biggest costs they have is the cost of grain and there has been an explosion of price, significantly as a result of the ethanol mandate."

Rep. Bob Gibbs, R-Ohio, also talked up his amendment to change the target-price provisions in the bill. The Price Loss Coverage program in the House would raise target prices more than 40% for crops such as corn and include even higher increases for other crops. Further, the PLC protection is tied to planted acres instead of base acres. Gibbs and others argue this will distort the market for these crops and affect the decisions farmers make to plant. "Too many of the major program crop (prices) are set near or above the cost of production," Gibbs said. "That's market distortion."

Gibbs amendment would effectively change the PLC program to the same target-price program that passed in the Senate with a formula based on 55% of the market price of a five-year rolling Olympic average. The Congressional Budget Office also scored the amendment as saving $12 billion over 10 years.

Gibbs noted his amendment is backed by the American Soybean Association, National Corn Growers Association and other state and national farm groups. Still, National Farmers Union issued a statement Tuesday defending the PLC and wanting it to remain in the House bill without changes. NFU argues the rolling average would weaken the safety net during times of multiple-year price declines.

Rep. Ron Kind, D-Wis., who co-sponsored Gibbs' amendment, later said the PLC would take the risk out of farming. Further, by tying the program to planted acres, it would encourage farmers to plant on environmentally sensitive land.

Kind and others also pushed heavily to get votes on clamp down on crop insurance. Kind and Reps. Rosa DeLauro, D-Conn., and Earl Blumenauer, D-Ore., want to limit the premium subsidy on crop insurance to $50,000, with Kind telling committee members that higher premium subsidies are "not economically justifiable." Further, the three congressmen want to ratchet down subsidy levels for farmers making $250,000 to $750,000 in adjusted gross income and eliminate the premium subsidy altogether for those farmers with AGIs higher than $750,000.

The lawmakers also want to lower the profit margins for insurers. Currently, USDA ensures crop-insurance companies have a 14% profit margin. Kind said one of his amendments would lower that level to 12%. Kind questioned why profits are guaranteed. "We don't do that for any other business in the entire country," Kind said. "Yet, all we're asking from the department (USDA) is to bring that down to 12%."

Kind also wants to eliminate the $147 million in payments that goes to Brazil due to the U.S. losing the World Trade Organization case to Brazil over cotton subsidies from the 2002 farm bill.

Blumenauer also wants to eliminate the "cotton carve out" that would provide two years of transitional direct payments to cotton growers.

I can be found on Twitter @ChrisClaytonDTN

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