WASHINGTON — The Senate on Monday passed a five-year, half-trillion-dollar farm bill that overhauls dairy policy by creating a new insurance program for dairy producers, eliminating other dairy subsidies and price supports.
The bill also expands government subsidies for crop insurance, rice and peanuts while making small cuts to food stamps.
The bill passed on a bipartisan 66-27 vote. The legislation, which would cost almost $100 billion annually, also would eliminate subsidies that are paid to farmers whether they farm or not. All told, it would save about $2.4 billion a year on the farm and nutrition programs, including across-the-board cuts that took effect earlier this year.
The new dairy policy includes a market stabilization program that could dictate production cuts when oversupply drives down prices.
Sen. Patrick Leahy, D-Vt., said the voluntary insurance program would bring some much-needed stability to many dairy farmers. They would be able to purchase insurance to guarantee stable prices whenever market forces drive prices below the cost of production.
“You might have a few months of prices are way up and that sounds great,” said Leahy, “but then they drop dramatically while the price of your electricity, your taxes, feed, amortization on your buildings — those continue the same whatever the prices are.”
The dairy program faced little opposition in the Senate but is expected to face resistance in the House, where Speaker John Boehner last year called the new stabilization program “Soviet-style.” He reiterated those concerns in a statement Monday, saying he will support an amendment on the floor to challenge the proposed policy.
Senate Agriculture Chairwoman Debbie Stabenow, D-Mich., said the farm bill would support 16 million American jobs, save taxpayers billions and put into place “the most significant reforms to agriculture programs in decades.” But it would still generously subsidize corn, soybeans, wheat, cotton, rice, sugar and other major crops grown by U.S. farmers.
The legislation would also set policy for programs to protect environmentally sensitive land, international food aid and other projects to help rural communities. The Senate passed a similar farm bill last year.
Boehner, R-Ohio, said Monday that his chamber will take up its version of the farm bill this month. Debate in the House is expected to be contentious and much more partisan than in the Senate, with disagreements within the GOP caucus over domestic food aid that makes up almost 80 percent of the bill’s cost.
Last year, the House declined to take up the legislation during an election year amid conflict over how much should be cut from the food stamp program, which now serves one in seven Americans and cost almost $80 billion last year. That cost has more than doubled since 2008.
The bill approved by the House Agriculture Committee last month would make much larger cuts to food stamps than the Senate version, in a bid to gain support from those House conservatives who have opposed the measure. The Senate bill would cut the food stamp program, now known as the Supplemental Nutrition Assistance Program, or SNAP, by about $400 million a year, or half a percent. The House bill would cut the program by $2 billion a year, or a little more than 3 percent, and make it more difficult for some people to qualify.
In his statement Monday, Boehner signaled support for the House bill’s level of food stamp cuts, saying they are changes that “both parties know are necessary.” Other Republicans are expected to offer amendments to expand the cuts, setting up a potentially even more difficult resolution with the Senate version.
On the Senate floor, senators rejected amendments on food stamp cuts, preserving the $400 million annual decrease. The bill’s farm-state supporters also fended off efforts to cut sugar, tobacco and other farm supports.
Senators looking to pare back subsidies did win one victory in the Senate, an amendment to reduce the government’s share of crop insurance premiums for farmers with adjusted gross incomes of more than $750,000. Sens. Dick Durbin, D-Ill., and Tom Coburn, R-Okla., said their amendment would affect about 20,000 farmers.
Stabenow argued the amendment would result in fewer people buying insurance and undercut a separate provision in the bill that would require farmers buying crop insurance to comply with certain environmental standards on their land.
Currently the government pays for an average 62 percent of crop insurance premiums and also subsidizes the companies that sell the insurance. The overall bill expands crop insurance for many crops and creates a program to compensate farmers for smaller, or “shallow,” revenue losses before the paid insurance kicks in.
The Senate bill also would:
— Make modest changes to the way international food aid is delivered, a much scaled-back version of an overhaul proposed by President Barack Obama earlier this year. Senators adopted an amendment that would slightly boost dollars to buy locally grown food close to needy areas abroad. Currently, most food aid is grown in the United States and shipped to developing countries, an approach the Obama administration says is inefficient but that has support among farm-state members in Congress.
— Consolidate programs to protect environmentally sensitive land and reduce spending on those programs.
— Expand Agriculture Department efforts to prevent illegal trafficking of food stamp benefits.
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