House to consider major changes in farm/food policy

by Brett Neely, Minnesota Public Radio

WASHINGTON -- Amid the noise and bustle of election season, lawmakers in the U.S. House this week are set to take up legislation that would rein in eligibility for food stamps and make major changes to the way the government subsidizes farmers.

On Wednesday, the House Agriculture Committee, led by Chairman Frank Lucas, R-Okla., and Rep. Collin Peterson of Minnesota, the ranking Democrat on the panel, will review their version of the once-every-five-year farm bill, the Federal Agriculture Reform and Risk Management (FARRM) Act.

• Download and read the Senate version of the bill here.

While it's called the FARRM Act, close to 80 percent of the bill's spending goes to the Supplemental Nutrition Assistance Program (SNAP), also known as food stamps, and other nutrition programs, making the bill one of the largest parts of the government safety net for the poor.

The legislation authored by Lucas and Peterson makes $16 billion in cuts to those programs over the next decade, almost entirely by making eligibility for food stamps more difficult. More than 500,000 Minnesotans receive an average of $115 a month worth of benefits under the program.

The farm bill also ends the two-decades-old system of direct payments for farmers, which had become politically indefensible as farm incomes rose because of record commodity prices. Like a bill the Senate passed last month, the FARRM Act instead shifts some of the savings from ending those payments into more federally subsidized crop insurance for farmers.

Unlike the Senate bill, the FARRM Act retains the counter-cyclical payment program for farmers that pays out if market prices drop below a government-mandated target price. That measure was kept in the House bill to appease Southern growers who said the crop insurance-only approach mandated by the Senate would provide an unfair advantage to Midwestern corn and soybean farmers.

But the target price that the House bill proposes is a big jump from the current target price, and the risk is that if crop prices fall, the federal government will be on the hook for all of those losses to a much greater extent than if it relied on a crop insurance system alone.

Critics of the counter-cyclical payment system, such as the nonprofit Environmental Working Group, argue that the target prices established in the draft House legislation (corn, for example, has a target price of $3.70 per bushel) are too high and could lead to large government payments if prices drop. Corn reached a nine-month high of $7.13 a bushel last week on the Chicago Mercantile Exchange.

Despite a broad bipartisan majority that pushed the bill through the Senate, prospects could be cloudier in the House. Last month, Majority Leader Eric Cantor asked Lucas to slow down the agriculture panel's time frame for moving the legislation out of committee.

In a budget road map passed earlier this year, House Republicans had committed themselves to food stamp cuts that are eight times larger than the cuts proposed by the FARRM Act. Still, in an election year where much of the Midwest is potentially up for grabs by both parties, Peterson believes there's enough political will to complete work on the bill before the current farm bill expires on Sept. 30.