House Committee Favors 5-Year Extension of Farm Policies, Rejecting Even Modest Shifts

New York Times
June 20, 2007
By ANDREW MARTIN

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Amid growing calls for alterations in farm policy, the House panel that oversees subsidies to farmers voted Tuesday to maintain the status quo by extending current policies for five years.

The panel, a subcommittee of the House Agriculture Committee, brought each of several proposals for change to the farm bill to a vote before rejecting them, sending a strong message to those pushing for major changes to farm legislation. They include the Bush administration and a bipartisan coalition led by Representative Ron Kind, Democrat of Wisconsin.

The Bush proposal received one vote. The Kind proposal was defeated unanimously, as was an unusual proposal from Citigroup that suggested a voluntary buyout to farmers receiving subsidies. Even modest reforms introduced by committee leaders were rejected.

By opening such a wide chasm between themselves and the advocates of change, the members of the panel appear to have increased the chances that the farm bill will stir a fierce debate on the House floor.

Tuesday's vote will be considered by the full Agriculture Committee after the Fourth of July holiday.

''This is really looking in the rearview mirror for policy,'' said Ralph E. Grossi, president of American Farmland Trust, a nonprofit group that has advocated changes in farm policy. ''If the committee doesn't respond in a more market-oriented way, then it forces a floor debate that will be difficult.''

Farmers collected more than $16 billion last year in subsidies. The vast majority of that money was paid to producers of corn, soybeans, wheat, rice and cotton. The subsidies are just a part of the bill, which also includes conservation and rural development programs and nutrition programs like food stamps.

Panel members said the subsidy portion of the farm bill worked well and was popular among the farm community.

But critics say only a small percentage of farmers benefit from the system while the vast majority receive little or nothing. The Bush administration has pushed for an overhaul of subsidies, in part because farmers now receive the most in subsidies when they grow bumper crops and the least during lean years.

''It provides the least help when the farmer needs it the most,'' Charles F. Connor, deputy secretary of agriculture, told the Congressional panel. The Bush plan would have emphasized guaranteed payments to farmers, as opposed to those contingent on market prices. Guaranteed payments are considered less distorting to global trade.

The Kind proposal would gradually reduce subsidy payments in favor of crop insurance and ''risk-management accounts,'' which would function something like investment accounts that could be tapped to cover minor losses.

Members of the subcommittee said that eliminating subsidies would ultimately increase consumer costs at the store. They noted that a similar effort to wean farmers from subsidies in 1996 failed miserably.

NOTICE: In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving this information for research and educational purposes.

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