Most farm subsidies left intact in Senate bill

WASHINGTON - Rural Minnesota can expect a major new farm bill from Congress early in the new year -- but not the full version reformers wanted that would have cut back large subsidies to wealthy growers, including several dozen in Minnesota.

The Senate on Friday approved a $286 billion bill shorn of several controversial provisions that would have scaled back the government's major agricultural subsidy programs. Among them was an amendment by Sen. Amy Klobuchar, D-Minn., that would have banned payments to farm households with incomes above $750,000 a year.

The 79-14 Senate vote sets the stage for negotiations with the House, where another Minnesota Democrat, Agriculture Committee Chairman Collin Peterson, is expected to play a major role in the final legislation, which has economic implications from the farm gates to Main Street.

Peterson said Friday that he will try to win agreement on an income limit of about $900,000, down from the million-dollar threshold set in the farm bill he shepherded through the House in July.

Income and subsidy limits have become a flashpoint this year in the long-stalled farm bill, reflecting a growing consensus for reform that has spread to the White House, which has threatened to veto legislation that doesn't go far enough to reduce farm payments across the nation. In Minnesota, government farm programs have doled out more than $9.5 billion over the past decade -- fifth highest in the nation.

While the Senate bill trims some types of farm payments and beefs up popular nutrition and conservation programs, it stops short of the major reforms some had hoped for.

"There are some great initiatives in this farm bill, but it is not the reform we really need," said Loni Kemp, senior policy analyst for the Minnesota Project, a group that promotes conservation programs in agriculture.

But many Minnesota farmers and the groups that represent them welcomed the Senate bill as a breakthrough that will lead to some limited reductions in farm payments.

"I would argue with someone who says we don't have reform here," said Blue Earth County farmer Kevin Paap, president of the Minnesota Farm Bureau Federation. "We got significant reform."

One of the most significant changes, Paap noted, is a provision that prevents farmers from avoiding payment limitations by filing for farm subsidies under different farm or corporate names.

Peterson said that Senate passage opens the way toward further compromise that diminishes the veto threat.

He suggested that one fertile field for further compromise would be deeper income limits for non-farmers or part-time farmers. Many of the poster children for excess -- past farm investors such as former NBA star Scotty Pippen and media mogul Ted Turner -- could be disqualified without affecting full-time farming operations with large capital investments.

While that might keep farm interests on board, Peterson also wants to subject conservation subsidies to the same limits as commodity payments, a move that could alienate many of the same reform groups that have been pressing for change.

Raymond Offenheiser, the president of the social action group Oxfam America, said the Senate voted to "drive a stake in the heart of farm bill reform" by dropping a separate payment limit proposed by Sens. Chuck Grassley, R-Iowa, and Byron Dorgan, D-N.D.

Unlike Klobuchar's amendment, the Grassley-Dorgan measure would have limited overall farm payments to $250,000 yearly per married couple, down from $360,000.

Klobuchar backed the Grassley-Dorgan measure; Sen. Norm Coleman, R-Minn., voted against it.

Coleman also voted against Klobuchar's amendment to deny farm payments to households with more than $750,000 in adjusted gross income.

The final vote on her amendment was 48 to 47, with 60 votes needed for adoption under a deal to avoid delaying tactics and expedite the farm bill.

"The focus here was to keep the money and the subsidies and the help in the hands of family farmers, and not to multimillionaire real-estate developers in Florida or art collectors in San Francisco," Klobuchar said. "I believe in the end this is good for farm country if we move for this kind of reform, because if we don't do it in the farm states, someone's going to do it to us."

Klobuchar counted it as a small victory that she even won a lively debate for her proposal. She also said she took heart in Peterson's willingness to negotiate lower income limits in the bill's final version, which is not likely to emerge until sometime in January.

Coleman said he voted against the payment and income limits for the sake of holding together the fragile coalition of regional farm interests needed to keep the farm bill on track.

"I believe further reform is needed," Coleman said. "But I supported the compromise that was in the bill."

Both Minnesota senators ended up voting for the final version of the bill.

A look at the overall bill

Lawmakers have been rushing to pass a new five-year farm bill before adjourning for a holiday break. The overall bill would expand crop and dairy subsidies along with popular nutrition programs, including school lunch programs and food stamps. Most of those programs have been operating under a temporary extension since the last farm law expired Sept. 30.

But calls for payment and income limits were strenuously opposed by many Southern rice and cotton growers, who receive some of the nation's largest subsidies. Sen. Blanche Lincoln, D-Ark., and other Southern lawmakers vowed to filibuster the farm bill over payment limits, particularly those proposed by Dorgan and Grassley.

Peterson said farmers all across the nation still remember the 1996 farm bill, dubbed "Freedom to Farm," passed amid high farm prices and a growing desire to wean farmers off subsidies.

But years of high farm prices were followed by low ones, and years of emergency funding bills to make up farmers' losses.

Peterson said farmers want to see if growing biofuel and export markets in China and India hold up before signing on to bigger cutbacks.

That view was seconded by Steve Kramer, a farmer in Hector, Minn. "The key thing here," he said, "is this preserves the safety net."

Kevin Diaz • 202-408-2753