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House Fails to Pass Farm Bill

Those of us hoping for a much needed update to the farm bill were once again disappointed by out legislators' failure to produce any legislation.

In a rare instance of bipartisanship, Representatives from both sides of the aisle united yesterday – in opposition to the new $940 billion farm bill to defeat it by a vote of 234 to 195.

However, that unity did not extend past the word Nay. Ironically, the stumbling block for dissenters of both parties was the bill’s $20.5 billion in cuts to the food-stamp program, but for antithetical reasons. Conservative Republicans objected on the grounds that the bill did no cut enough from the food stamp program, which makes up 79.2 percent of the bill’s budget, while Democrats clamored that it cut too much from the program, claiming it could result in the loss of benefits for as many as 2 million recipients.

In comparison, the Senate’s $955 billion farm bill, which was passed last week with bipartisan support by a vote of 66 to 27, calls for cutting $3.9 billion from the food-stamps program – one fifth of the House’s proposed cuts.  

The surprise defeat was a major blow to House Speaker John Boehner. Since 2010, when many staunchly conservative republicans were elected to Congress, Mr. Boehner has had trouble uniting his party. Aware of these anti-spending hard-liners’ broad opposition to government spending, he has had to rely on Democratic votes to pass legislation, including the January bill to avert the so-called fiscal cliff.

In advance of the vote, it appeared that there was enough Democratic support to pass the bill, despite the unhappiness of many over the cuts to the food-stamp program. However, several amendments – adopted almost exclusively with Republican support – proved to be the straw(s) that broke the camel’s back. One required that recipients take a drug test and have no felony crimes in order to receive benefits. The other, proposed by Rep. Steve Southerland (R., FL), advanced a work requirement for people in food-stamp programs, much like the existing requirement in other welfare programs.

The rest of the bill is broken down as follows: as previously mentioned, food-stamps and nutrition would receive 79.2 percent of the budget ($743.9 billion), commodity programs 4.3 percent ($40.1 billion), crop insurance 9.9 percent ($93 billion), conservation 6 percent ($56.7 billion), and $5.8 billion for everything else. Note, all values are for spending over the next 10 years; they are not annual.

Food-stamps were discussed above, so I’ll skip right to Commodity programs. Most of these programs are directed at shielding farmers from sharp fluctuations in market prices. In the past, these programs made up a larger portion of the budget, which provided “direct payments” to farmers irrespective of the amount of crops they planted – if any – or how many they sold.

But this year they received some of the biggest cuts in both the House and Senate bills, about $18.6 billion over ten years – close to the $20.5 billion cut from food-stamps.

However, the sum of the savings from these cuts are being redirected to other programs, unlike the food-stamp cuts, which are taken out of the budget entirely.

The crop insurance programs are the largest beneficiaries of the aforementioned cuts. Federal crop insurance subsidies have been implemented for decades; enabling farmers to buy crop insurance in case prices decline or their crops fail. In addition to the $7 billion per year the federal government already pays farmers to help cover premiums, the bill would allocate $8.9 billion per year covering deductibles farmers have to pay before the insurance coverage begins.

These additional crop insurance benefits are designed to – partially – offset the loss of direct payments. But the new programs are not without controversy: some critics have warned that the price of covering could be much more than expected, and others worry that one-third of the subsidies will go to the largest 4 percent of farms. The latter is a divergence from the Senate bill, which puts caps on the amount of subsidies large farms can receive.

Another difference is that the Senate’s bill, ties funding for premiums to wetland conservation, while the House bill does not; if farmers convert wetlands for agricultural purposes they could lose their funding. This provision is a key to sustainable farming that, if examined closely is a benefit for farmers and the environment, as wetlands occupy an important role in containing floods and preventing erosion, as I have written about in previous blogs.  

Unfortunately, funding for conservation has been cut in both bills. Programs that help and encourage farmers to protect against soil erosion and use ecologically friendly agricultural practices will be cut by about $4.8 billion, in addition to an estimated $2.1 billion over the next decade as a result of the sequester.

Under this bill, about $3.6 billion would be used to promote the trade of U.S. crops overseas, and provide food aid abroad. President Obama advocated a restructuring of the food aid program, asking that money be sent straight to poor countries rather than subsidizing the shipping of American crops to those countries. Not surprisingly, that proposal did not gain traction in the House.

Energy projects would receive $243 million, including money for biofuels and energy efficiency programs in rural areas. Another $1.5 billion would go to a variety of programs, including forestry programs, rural development, the promotion of farmers’ markets and organic agriculture, as well as the selling of timber on federal lands. (I’m not sure why we need to spend money to sell something; although I guess it would go towards startup costs and be recouped when the selling part starts.)

The latter is an important provision. As a means of wildfire management and generating funds to help the indebted Forest Service, sustainable forest management is a desperately needed program that has too often been ignored. (See my previous blogs from earlier this month and late April for more on the issue of wildfires and forest management.)

So what does this mean for farmers and any other landowners who would be affected by these programs? Well, things will likely be business-as-usual.

House Agriculture Committee Chairman Frank Lucas (R., OK) stated that he was not optimistic about bringing another farm bill to the floor before the August recess. That means members of the House will have to come to the negotiating table with no bill of their own and try to achieve a compromise with the Senate that will be a little more palatable for House Republicans.

Given that the House was unable to pass its own farm bill because many Republicans thought it didn’t cut enough, even though it cut drastically more than the Senate version – $940 to $955 billion – it seems extremely unlikely that they would agree to a compromise bill with substantially less cuts.

There could be some hope in a compromise if enough House Democrats get on board, but reduced spending cuts could also see more Republican lawmakers defect.
Basically, the result of this legislative failure will likely be another of the seemingly infinite ‘temporary’ furtherances of the current farm bill.

Read more about the Senate's farm bill.