Des Moines Register
070-28-07
House farm bill keeps subsidies Iowa enjoys
In '06, the state got $1.3 billion; Senate looks next
By PHILIP BRASHER
REGISTER WASHINGTON BUREAU
Washington, D.C. - The House has approved a new farm bill that could ensure
Iowa's corn and soybean growers stay at the top of the heap in federal subsidies.
The five-year bill, approved 231-191, has strong support from farm groups in
Iowa and nationwide. However, the Bush administration threatened this week to
veto the legislation, and most House Republicans deserted the bill after
Democrats added a tax measure to pay for increases in food stamp benefits.
Iowa typically ranks No. 1 or No. 2 in government farm payments, and the House
bill would maintain the existing subsidy system enacted in 2002. Iowa farmers
and landowners received $1.3 billion in government payments in 2006, second to
Texas' $1.5 billion.
"As far as the amount of subsidies we see flowing through the program to Iowa,
we are about the same as we were if we had an extension" of the 2002 bill, said
Chad Hart, an agricultural economist at Iowa State University.
Mark Salvador, who follows federal policy for the Iowa Farm Bureau, said the
House bill "balances the needs of our farmers and rural communities while
providing food assistance to our nation's less affluent."
The legislation is a long way from becoming law, however.
The Senate has yet to start work on its version. And just 19 Republicans
supported the House bill, so that left the final vote well short of the two-thirds
margin that would be needed to overcome a presidential veto. Democrats have
majorities in the Senate and House.
Adding the tax measure "narrowed support for the farm bill, and it lessened its
chances of success," said Agriculture Secretary Mike Johanns.
Iowa's five House members split along party lines. The three Democrats backed
the bill, while the two Republicans opposed it.
The Senate Agriculture Committee, chaired by Iowa Democrat Tom Harkin, will
begin work on its farm bill in September.
Existing farm programs expire at the end of that month, but Agriculture
Department officials say that missing that deadline shouldn't affect payments.
House Speaker Nancy Pelosi threw her support behind the new legislation
despite liberal criticism that it wouldn't alter the tilt of U.S. farm programs to grain
and cotton farms.
In a personal appeal from the House floor, she said the bill "begins to reform farm
policy" and puts more money into bioenergy development, conservation, food
stamps, and fruit and vegetable production.
The House rejected one challenge after another to major sections of the bill,
including one amendment backed by environmental groups to cut subsidies to
grain and cotton farms. Cuts in price supports for sugar growers also were
defeated.
Democrats won support from farm groups by boosting most conservation
programs, increasing food stamp benefits and adding $1.6 billion in aid for fruit
and vegetable growers, who have traditionally gotten little.
To get the funding they needed for the bill, Democrats tapped some sources of
money that will be challenged in the Senate. The Conservation Security
Program, a personal priority of Harkin's, was gutted to fund other environmental
programs, including one that restores wetlands.
Crop insurance companies, several of which are based in Iowa, also took a hit as
Democrats scrambled to find enough votes to pass the bill. The companies'
future profits would be reduced to pay for an increase in international food aid
sought by urban Democrats.
Republican criticism focused on the $7.5 billion tax on foreign corporations that
was added to the bill to pay for increasing food stamp benefits. Democrats
argued that foreign corporations receiving U.S. subsidies were unfairly paying
less in taxes than U.S.-based companies.
Rep. Tom Latham, R-Ia., said the House could have funded the increase in food
stamp benefits by reducing the growth of overall federal spending.
There was only one major change to the farm bill on the House floor: Lawmakers
stripped away provisions, opposed by the banking industry, to expand the
lending authority of the Farm Credit System, a nationwide network of farmerowned institutions.
Commercial bankers believe the Farm Credit System is unfair competition
because its institutions are exempt from some taxes and can offer loans at lower
interest rates than private lenders. The system's institutions include Farm Credit
Services of America, the Omaha-based association that serves Iowa.
Reporter Philip Brasher can be reached at (202) 906-8138 or
pbrasher@dmreg.com
WHAT THE BILL WOULD MEAN
The House of Representatives, ignoring a veto threat from President Bush, has
approved a $284 billion, five-year farm bill that would provide subsidies to
growers of soy, corn and other crops. Lawmakers passed the measure on a
largely party-line 231-191 vote, sending the farm-bill debate to the Senate, which
is expected to spend more on land conservation and food-aid programs. The
Senate is expected to start working on its version in September.
FOR CORN AND SOYBEAN FARMS: They escaped a cut to the government's
fixed payments, which total $500 million a year in Iowa. The largest farms could
even receive more. The cap on individual payments per year would be increased
to $60,000 from $40,000.
FOR BIOFUELS: The bill would provide $2 billion in loan guarantees for nextgeneration biofuel production, including ethanol made from cornstalks, wood
chips and other types of biomass. Biodiesel producers could get additional
subsidies.
FOR CONSERVATION: The Environmental Quality Incentives Program's budget
would be increased by $1.1 billion over the next five years, a 17 percent bump. A
wetlands restoration program also would grow.
FOR FRUITS AND VEGETABLES: Growers would get $1.6 billion over five
years in marketing assistance, government purchases and other aid. More
schools would get fruit and vegetable snacks.
FOR ORGANIC FARMERS: Programs that favor local and healthful food
systems would be up for subsidies.
FOR FOOD STAMPS: Benefits would be increased by easing eligibility rules and
adding inflation adjustments.
Reporter Philip Brasher can be reached at (202) 906-8138 or
pbrasher@dmreg.com