Senate Rejects Higher Food Stamp Spending and Cut in Farm Subsidies

The Senate refused to shift money from farm subsidies to food stamps as majority Democrats struggled Wednesday to push through a bill reauthorizing agriculture and nutrition programs.

Sen. Tom Harkin, D-Iowa, who chairs the Senate Agriculture Committee, said a reduction in farm subsidies would undermine support for the bill and undo a delicate compromise between agricultural interests. The Senate defeated the higher food-stamp spending 70-30.

"Even though we might want to do more for nutrition, I think we've met our responsibilities in this bill," Harkin said.

Sen. Richard Lugar, R-Ind., tried to double proposed spending on food stamps by scrapping the existing farm subsidy programs, which primarily benefit large grain and cotton operations. He wants to replace those programs with vouchers that would be available to a wider variety of farms.

"If we're going to distribute money let's do it to all states, all crops, all animals," he said.

The Democratic farm bill would increase food-stamp spending by 2.5 percent, or $620 million annually. Lugar's proposal would have added another $1 billion annually.

On Tuesday, the Senate rejected 51-47 a Republican move to kill $2 billion in new dairy subsidies that are part of the bill.

The dairy program is viewed as critical to getting the support of Northeastern senators for the Democratic farm bill, which primarily benefits grain and cotton farms in the Midwest and South.

Farm groups are pressing the Senate to approve the legislation this week and work quickly to reach a compromise with the House, which passed its own version in October.

Existing farm programs won't expire until next fall, but farm interests fear that there will be less money available for subsidies if Congress doesn't act quickly.

The Senate bill would reauthorize farm programs through 2006.

The milk subsidies are a key part of the Democratic strategy to block an alternative bill backed by Senate Republicans and the Bush administration.

Along with adding the dairy money, Democrats also have proposed higher spending on conservation programs and added more benefits for cotton and rice interests.

Critics of the dairy subsidies say they would encourage farms to increase the size of their herds. That, in turn, could force down prices and require the government to buy more surplus milk products to prevent the market from collapsing.

"In the long term, the effect could be substantial," said Larry Salathe, an Agriculture Department economist.

The government already holds about 600 million pounds of nonfat dry milk, about a year's supply, for which it can't find a market.

One-fourth of the proposed dairy payments, about $500 million, are earmarked for 12 northeastern states. The subsidies would cover the first 8 million pounds of a farm's annual production, the equivalent of about 440 cows.

The subsidies would compensate for expiration this fall of a system that guaranteed minimum revenue for New England dairy farms.

Several Democrats, including freshmen Sens. Bill Nelson of Florida, Jean Carnahan of Missouri and Maria Cantwell of Washington, initially voted against the subsidies Tuesday, but then switched sides to support the program.

The Bush administration also opposes the Democratic bill because of increases in price guarantees for grain and cotton that could stimulate higher production of those crops.

The administration says the bill could break both spending caps in this year's congressional budget agreement and a limit on U.S. farm subsidies under the World Trade Organization.

Breaking the WTO cap would undermine the administration's efforts to get other countries to reduce their subsidies and open new markets for U.S. commodities, the White House said in a policy statement.