Senate Passes 2012 Farm Bill

Heading to the House

Published in the August 2012 Issue Published online: Aug 08, 2012
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The Senate bill passed 64 to 35 with 48 Democrats and 16 Republicans voting for the measure.

The legislation, with a total cost of about $1 trillion over 10 years, would end the two-decade-old program that sends $5 billion to farmland owners and investors each year-roughly one-third of total U.S. farm subsidies-regardless of whether they raise crops. The bill also would expand the federal crop-insurance program, which offers subsidies to farmers and insurance companies, though lawmakers agreed this week to curtail assistance for larger farms.

The package is expected to reduce future government spending by roughly $24 billion over 10 years compared with what would have been spent if current policies were extended.

The issue next moves to the House of Representatives, where its prospects remain cloudy. House Republicans are likely to start from scratch on their version of the bill in several weeks.

The largest item in the Senate package is a projected $768 billion 10-year outlay for the Supplemental Nutrition Assistance Program, commonly known as food stamps, which helps low-income families purchase food. The new law makes some minor changes to the program, such as preventing lottery winners and certain college students from collecting benefits, shaving costs by $4.5 billion over 10 years. But it largely leaves the structure of the program intact.

The Congressional Budget Office said 45 million people received close to $80 billion of SNAP benefits in 2011, up 70 percent from 2007. House lawmakers have voted to cut SNAP spending by an additional $30 billion over 10 years, mostly by limiting eligibility, and some have called for giving control of the program to the states.

House Agriculture Committee Chairman Frank Lucas (R-Okla.) said the farm bill he plans to offer will have "differences" from the Senate version but lauded lawmakers for striking a bipartisan deal. His panel plans to begin voting on its version July 11.

Without new legislation, farm policy would automatically revert to some laws passed in the 1930s and `40s, potentially leading to a confusing system for compensating farmers for growing certain crops and upending some government-loan programs. Sen. Pat Roberts (R-Kan.), a chief architect of the bill, called the prospect of reverting to past policies "ridiculous."

The farm bill typically mobilizes lawmakers based more on regional than political affiliation. Southern lawmakers had argued that the cuts to direct subsidies would hurt rice and peanut growers and favor those with bigger crops such as corn and soybeans, largely in the Midwest.

All farm groups went into this year's farm-bill talks expecting significant cuts, amid boom times in the Farm Belt and an elevated focus on federal spending cuts. The Agriculture Department estimates that net farm income, a widely used measure of profitability, rose to $98.1 billion last year from $79.1 billion in 2010.