Reshaped policies end subsidies, enhance insurance, cut food stamps.
WASHINGTON -- Minnesota’s 80,000 farms finally got a clear view of the help they can expect from the federal government in coming years with Wednesday’s House passage of a new set of agricultural policies.
The 949-page farm bill, which is expected to win quick approval in the Senate, replaces direct subsidies with enhanced crop insurance and new price protections. It preserves land conservation programs as well as sugar beet price guarantees that benefit Minnesota’s many growers.
The bill was due to pass in 2012, and in fact twice cleared the Senate, but it languished in the House amid partisan battles over its food stamp provisions. Republicans who control the House wanted more cuts, Democrats wanted fewer.
Kelly Erickson, who grows corn, wheat, soybeans and sugar beets on 4,000 acres in Minnesota’s Red River Valley, greeted news of the bill’s passage with more relief than celebration. “It has been hard to get anything done in Washington,” Erickson said. “Farmers need to know [policies] two or three years in advance in order to make investment decisions.”
The 251-166 House vote saw a majority of Republicans voting for the bill and a majority of Democrats against it. A bipartisan group of four Democratic and two Republican representatives from Minnesota voted for the bill.
Minnesota Rep. Collin Peterson, the ranking Democrat on the House Agriculture Committee and one of the architects of the bill that came through a Senate-House conference committee, called the legislation “what is needed to actually get things done.”
Kevin Paap, a Blue Earth County corn and soybean farmer who serves as president of the Minnesota Farm Bureau, called the bill “a landmark rewrite of farm policy.”
For farmers used to collecting direct payments from the government based on past plantings, the new law offers a change in focus. Direct payments have long been unpopular, while crop insurance and programs triggered by falling commodity prices are more politically palatable.
“It’s important for us to move forward and look at the farm bill as risk management,” said Lance Peterson, a soybean, corn and wheat farmer near Fergus Falls and a director of Minnesota’s soybean trade group.
The bill also extends financial assistance including low-interest loans to livestock farmers in case of weather-related crises like herd-decimating blizzards.
“It can benefit us in time of disasters,” said rancher Dar Geiss, president of the Minnesota State Cattlemen’s Association. “Normally, livestock people have less benefits coming from the farm bill than the grain sector.”
The nation’s sugar program, which guarantees prices, limits imports and allows sugar producers to repay government loans with sugar if prices fall below established limits, survived unscathed after millions of dollars in lobbying and political contributions by the sugar producers.
Minnesota is the nation’s largest sugar beet producer, and much of the money spent to lobby for the sugar program came from Moorhead-based American Crystal Sugar.
Critics of the farm bill say too much of the savings from eliminating direct crop subsidies has been plowed back into overly generous crop insurance and price protection programs that taxpayers help underwrite.
“These new subsidies are worse for taxpayers and the environment than the subsidies they are replacing,” the Environmental Working Group charged. The farm bill also adds “to the already bloated crop insurance program.”
But the costs and benefits of the farm bill are in the eye of the beholder. “From a taxpayer viewpoint, I accept the argument that this is too much subsidy [to farmers],” said Kent Olson, a professor of applied economics at the University of Minnesota and Extension economist. “But from an agriculture viewpoint, this is really a good set of rules.”
Other provisions of the bill offer a new dairy supply protection plan, cut food stamps by changing qualification standards and include money for research and to give young people an incentive to farm.
In the end, a clear majority of representatives compromised on a net $8 billion cut over 10 years in the Supplemental Nutrition Assistance Program, or food stamps. Replacing the old subsidies with a less-expensive safety net adds up to roughly $9 billion in savings over 10 years.