Big Farms Cash in, White House Loses in Farm Bill Deal

WASHINGTON – Lawmakers drove another nail into the government's experiment with a market-oriented farm policy, and firmly rejected the Bush administration's overhaul proposals, by agreeing on a six-year bill that boosts subsidies to grain and cotton growers.

The 1996 Freedom to Farm law was supposed to wean farmers from government supports but never had its intended effect. Commodity prices collapsed in 1998, and Congress responded with a series of annual bailouts to supplement regular subsidy programs.

The White House last fall requested an overhaul of subsidies that would benefit more farmers while discouraging excess production of surplus crops.

Under an agreement made final by congressional negotiators Friday, the new bill would boost agriculture spending by 70 percent, raising subsidy rates and adding new programs. Included in the deal is an 80 percent increase in spending on land-conservation programs as well as new subsidies for bioenergy and rural development.

"I don't think there's a chance in the world the president won't sign this," Mary Kay Thatcher, a lobbyist for the American Farm Bureau Federation, said Friday. "It's a reasonable farm bill."

The White House fought against increasing crop subsidy rates and pushed for creation of a Canadian-style system of subsidized savings accounts to help farmers manage swings in their income.

Lawmakers turned down both ideas. Virtually the only victory for the White House came on an election-year proposal to restore food stamps to noncitizens who have lived in the country for five years, an idea to appeal to Hispanic voters.

"The administration basically didn't get anything they wanted," said Bruce Babcock, director of the Center for Agricultural and Rural Development at Iowa State University.

"They really weren't a part of this discussion," said Sen. Kent Conrad, D-N.D.

Agriculture Secretary Ann Veneman said in a statement Friday she was pleased the compromise had eliminated "many objectionable provisions."

The bill would increase planned agriculture spending by $73.5 billion over the next 10 years, the limit allowed by last year's congressional budget agreement. Existing programs are expected to cost about $107 billion over the same period.

Details of the legislation, which still must be approved by the full House and Senate, were still subject to change, pending revised cost estimates.

Price guarantees, known as loan rates, will be increased for several major crops under the bill, and it also revives a target price system, abolished by the 1996 law, to provide additional income. The loan rate for wheat would rise nearly 9 percent; the corn rate would go up 5 percent.

In a victory for Southern producers and large Midwest farms, growers and landowners will still be allowed to collect crop subsidies in unlimited amounts.

Also included is a new subsidy program for dairy farmers targeted to small- to medium-scale producers; a requirement that meat, fish and produce be labeled with the country of origin, starting in two years; and a new $2 billion conservation program to reward crop farmers for better environmental practices, lawmakers said.

The bill quadruples the popular Environmental Quality Incentives Program, which subsidizes the cost of manure cleanup, water conservation and other improvements. The money will aid livestock farms and feedlots in complying with tougher environmental regulations.

Dropped in the final deal was a Senate-passed ban on meatpacker ownership of cattle and hogs and an administration-opposed provision that would have permitted private financing of food sales to Cuba. Facing resistance from the administration and House leaders, the negotiators also jettisoned a $2.4 billion package of disaster assistance for farmers who had crop failures last year.

The legislation will replace farm, nutrition and land-conservation programs set to expire this fall. The new bill would expire in 2008, a presidential election year.

Negotiators were stalled for weeks over regional differences on crop subsidies as well as the labeling proposal and the meatpacker restriction.

Election-year politics figured prominently in the talks.

The food-labeling rule was a major issue for Senate Majority Leader Tom Daschle, who is trying to secure the re-election of the bill's sponsor, fellow South Dakota Democrat Tim Johnson.

Southern Democrats, meanwhile, were pressing Daschle to drop proposals opposed by farms in their states.