Subsidies out, crop insurance up in Senate farm bill

WASHINGTON – Minnesota's farmers face an end to direct crop subsidies but would gain a more generous crop insurance in the Senate version of the five-year farm bill that was approved Monday night.

Some of the state's poor face cuts in food stamps, while Minnesota's bustling sugar beet industry would see its price support system remain intact. But the state's dairy farmers may soon have to adjust to a new way of figuring government aid.

As various interest groups celebrated or vilified the $955 billion Senate bill Tuesday, farmers in Minnesota and across the country found themselves in the same limbo that they did a year ago when the Senate passed a farm bill, but the House didn't even debate one.

"We're looking for some certainty out here as farmers, and we need a five-year farm program to get us there," said Kelly Erickson, who grows sugar beets, soybeans, corn and wheat on about 4,000 acres in Kittson County. "There's always uncertainty in the House. It's always a tougher battle. We hope they summon the vision and political courage to get it passed."

Last year, Congressional gridlock led to the policies of the 2008 farm bill, most of which were set to expire Sept. 30, to be extended on an emergency basis. This year, House Republican leaders have not allowed a floor debate on the farm bill that the House Agriculture Committee passed in mid-May, although House Speaker John Boehner said Monday that he intends to do so.

Rep. Collin Peterson, a Democrat who represents Minnesota's Seventh Congressional District, hopes to have a farm bill for President Obama to sign by summer's end. "From what we've been told, it will come up next week," said Peterson, the ranking minority member on the House agriculture committee. "If it doesn't come up, it will be because they don't have the votes to pass it."

Sen. Amy Klobuchar, D-Minn., who helped craft the Senate farm bill as a member of the Agriculture Committee, warned that the farming community is losing patience with Congress. "I have heard from countless Minnesota farmers and ranchers who need the support and certainty that this bill provides," she said in a statement. "If the House fails to act, they do so at their own risk."

The bill approved by the House ag committee would cut benefits to about 32,000 of Minnesota's 580,000 current food stamp recipients by raising eligibility requirements, said Colleen Moriarty, director of Hunger Minnesota, a statewide hunger relief agency. Owning cars or having a savings account or other assets — even if low in value — could disqualify recipients.

Financial guarantees for advanced biofuels that matter to Minnesota's budding alternative fuels industry are also up in the air. The Senate farm bill contains $880 million in funding. The House ag committee bill has nothing.

Direct payment of crop subsidies, which pays farmers per acre based on past planting patterns, will disappear if the House and Senate can come to an agreement on a new farm bill. Each chamber calls for the elimination of the program, which came under criticism because it paid out billions of dollars with some money going to farmers who were not even growing crops.

While the Senate bill and the House ag committee bill each anticipate roughly $18 billion in savings from ending direct payments, both anticipate taking much of that money to expand the nation's crop insurance program.

Some environmental groups have called the insurance program even more wasteful than direct payments. "They are touting that they are eliminating direct subsidies," said Craig Cox of the Environmental Working Group. "But they are using three-quarters of the savings to create new insurance-based subsidies. One way or another, taxpayers are guaranteeing very high levels of income for these food crops."

Of course, these changes and others assume that both chambers of Congress can agree on a farm bill. Peterson, the senior member of the Minnesota delegation, no longer takes that for granted. "We have 200 people in the House who have never voted on a farm bill," he said.

Many of those new members are Republican anti-government stalwarts, Peterson said. When it comes to the farm bill, he noted, their zeal could keep flawed government programs in place.

"Farmers are kind of embarrassed by direct payments," Peterson said. "[But] they will continue to take them."

Staff writer Mike Hughlett contributed to this report. Jim Spencer • 202-383-6123