Farm Bill Passes Senate, Goes to President

by Fran Smith on February 4, 2014

in Agriculture, Economy, Environment

With the U.S. Senate’s passage February 4 of a farm bill by a vote of 68-32, a nearly $1 trillion (over 10 years) farm bill will govern agriculture policy for the next five years. The House had previously approved the bill last week. About 80 percent of the spending goes for food stamp and nutrition programs.

Even though this was the most contentious farm bill process in recent history, the results are pretty much the same: farmers will get their pork one way or another. The elimination of “direct payments” to farmers was touted by supporters of this legislation. Those are payments made to farmers even if they didn’t farm the land. All well and good. But instead of putting those expected savings back into taxpayers’ wallets, lawmakers diverted many of those funds to the new pork – expanded federal crop insurance – where the federal government (taxpayers) pays about 60 percent of the farmers’ premiums and most of the administrative costs of the crop insurers. There’s also no means testing for determining who gets crop insurance subsidies.

This bill also creates what’s called a “shallow loss” program for farmers, where farmers would receive insurance payments when their revenues drop below a certain percentage of previous years or when the prices for agricultural commodities drop below target prices. With farmers’ record revenues and recent high commodity prices, this program could end up costing much more than the estimates if revenues and prices drop.

The U.S. sugar program remains with its command-and-control structure that determines supply and demand. Under that program, domestic sugar historically has cost two to three times the world price, which translates into about $4 billion more per year that consumers pay and the loss of jobs in the confectionery and food industries.

Three of the most influential Republican Senators on agriculture issues – Sens. Grassley (Iowa), Roberts (Kansas), and McCain (Ariz.) — were included in the 32 who voted Nay.

The bill now goes to President Obama for his signature.

Comments on this entry are closed.

Previous post:

Next post: