Photo: NASA (Wikimedia Commons)
The trimmed-down Federal Agriculture Reform and Risk Management Act (pronounced “FARRM,” like a pirate) barely squeezed through on a 216 to 208 vote on Thursday, after hours of heated debate and angry barbs hurled across the chamber floor.
House Republicans sheared the bill into two parts, separating food stamp provisions from farm assistance programs for the first time in four decades. The move was meant to boost the chamber’s chances to pass a farm bill, and, most importantly, to avoid repeating the embarrassing defeat of a broader measure in June. It worked for now.
But Dan Smith with the U.S. Public Interest Research Group said the bill disproportionately subsidizes the largest factory farms, and leaves smaller growers high and dry.
“While the Big Ag lobby claims to stand up for small farmers, 74 percent of these subsidies went to just 4 percent of agribusinesses, with more than 60 percent of farms not even getting a dime,” he said.
The bill cuts a controversial system that allowed wealthy business to get subsidies, but it shifts three quarters of the savings into a new program that guarantees farms would get up to 90 percent of the profits they make the previous year.
The much-maligned “direct payments” scheme required public disclosure of who received checks and how much money they received. Its replacement, the Price Loss Coverage program, would not require such transparency.
Guaranteed High Prices And Capless Crop Insurance
The bill also locks in recent record-high prices for certain crops, which opponents say could cost taxpayers billions of dollars if prices drop over the next decade.
Smith said the bill missed opportunities to turn off the spigot for the most profitable agribusinesses, preserving a “gravy train” system that allows the top 4 percent to get 75 percent of the nation’s subsidies.
The bill does not cap the amount of money a business can receive for crop insurance. That means 26 top-earning businesses each reaped $1 million in subsidies in 2011, compared to an average of $5,000 for 80 percent of the recipients, according to a recent Environmental Working Group study. The Senate version of this bill also doesn’t limit the amount of crop insurance payments.
“This gives the largest farm operations a leg up in the increasingly intense competition for land at the expense of smaller farms,” said Craig Cox, the senior vice president of agriculture and natural resources for the Environmental Working Group.
In a statement on Wednesday night President Barack Obama threatened to veto the House bill, in part because it severed the food stamp provisions, and because it did “not contain sufficient commodity and crop insurance reforms and does not invest in renewable energy.”
Behind the Scenes
The agribusiness lobby is among the most powerful in Washington, and it certainly threw its might into the fray over this measure during the last two years. In 2012 alone, Big Ag spent $220 million on lobbying and campaign contributions, according to public records. In DC’s Capital South and Union Station subway stations this June, the National Corn Growers Association plastered dozens of advertisements touting high-tech achievements in the industry and its trade surplus, thinly veiled messages to win support from Congress.
“The lobbying effort was fierce,” Smith said. “[The lobbyists] ended up getting a bill through the House that would benefit them hugely.”
The House bill also slashed $5 billion from a Clean Water Act program to reward farmers who protect drinking water and wildlife habitat from pesticides. Craig Cox said agribusiness lobbyists were not the only ones poised to gain from this legislation.
“Crop insurance companies and agents profit handsomely from the heavily subsidized insurance program and have joined with the traditional farm lobby to ensure those profits continue — at taxpayer expense, of course.”
- Farm bill debate ignites confusion (Politico)
- What the farm bill says about house GOP (Wall Street Journal)
- Farm Subsidy Database (Environmental Working Group)