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The Farm Bill Fiasco

Thursday, November 8, 2007

Though serious agriculture reforms are needed, they face an uphill battle in Congress, writes LIZ MAIR.

This week, the 2007 farm bill hit the Senate floor—and already, everyone from fiscal conservatives and free traders to environmentalists and celebrities has found something to hate about it.

What’s wrong with the legislation? For one thing, it increases government price supports and continues to make federal subsidies available to wealthy farmers. While the Bush administration sought to deny subsidies to farmers earning more than $200,000 per year, farm-state lawmakers had other ideas. Indeed, according to the fiscal watchdog Citizens Against Government Waste (CAGW), the 2007 farm bill would take just 7,000 farmers off the dole, compared to some 38,000 who would be removed under the Bush proposal.

There are other problems. The bill contains provisions that violate international trade agreements; and its high subsidies pose a threat to the ongoing Doha Round of global trade talks. Administration officials are advising President Bush, who signed the bloated 2002 farm bill, to veto the legislation—and it’s attracting sharp criticism in other quarters, as well.

Senators Charles Grassley, an Iowa Republican, and Byron Dorgan, a North Dakota Democrat, want to cap annual subsidies at $250,000 for a two-person farming household, which for some farmers would represent a significant cut. Green outfits, such as Grist magazine and the nonprofit group Environmental Defense, are unhappy with the lack of attention given to land conservation and sustainability efforts. Earlier this week, a former Environmental Defense lobbyist dismissed the farm bill in a comment to the LA Times as “horse manure [rolled] in powdered sugar.”

Between political calculations and the undoubted strength of the farm lobby, the chances of achieving real reforms in the Senate farm bill look slim.

Urban politicians, meanwhile, are concerned about the allotment given to the Food Stamp Program. The farm bill does increase Food Stamp spending from $4.2 billion to $5.3 billion over the next five years, but that may not be enough for lawmakers focused on reducing malnutrition among the inner-city poor. The “healthy eating” campaigners, including actress Alicia Silverstone, are also upset. Silverstone claims the farm bill includes too many “subsidies for … foods that are fueling the epidemic of childhood obesity.”

Instead, she supports the so-called FRESH Act, which would radically overhaul the current U.S. agriculture regime. Introduced by Senators Frank Lautenberg, a New Jersey Democrat, and Richard Lugar, an Indiana Republican, the FRESH Act would replace subsidies for several major crops with a free insurance program for all farmers. It would save the feds an estimated $19 billion, most of which could be diverted to conservation and nutrition programs and the rest of which could be used to fund deficit reduction. It should therefore appeal to fiscal conservatives, free traders, environmentalists, and health nuts alike.

But don’t expect it to win widespread approval. Senators such Iowa Democrat Tom Harkin, chairman of the Agriculture Committee, and Georgia Republican Saxby Chambliss have a lot riding on passing the farm bill in its current form. Both are up for reelection next year, and both represent states where farmers (and the farm lobby) are an important constituency. Harkin has never won a Senate race with more than 56 percent of the vote; and a recent poll showed Chambliss winning just 36 percent support (with 40 percent undecided).

In a broader sense, the Democratic Party has a lot riding on the bill’s passage, too. Last year, the Democrats won previously Republican House seats in agriculture-heavy districts such as Kansas’s 2nd district, now represented by Nancy Boyda, and Ohio’s 18th district, now represented by Zack Space. Failing to deliver a sufficiently “healthy” farm bill could put those seats in jeopardy. That may have been one reason why the avowedly “reform-minded” Democratic House majority balked at introducing farm savings accounts, a bold free-market concept pushed by Representatives Ron Kind, a Wisconsin Democrat, and Jeff Flake, an Arizona Republican.

Between political calculations and the undoubted strength of the farm lobby, the chances of achieving real reforms in the Senate bill look slim. True, crop prices and household incomes have hit record levels; it therefore seems like a good time to revamp U.S. farm policy. But a similar argument could have been made in 2002, when Bush signed the largest farm bill in history. This year’s legislation is no less bloated with wasteful spending. As always, agriculture reform is proving an uphill battle.

Liz Mair is a recovering corporate finance lawyer, and a columnist, commentator, and political consultant operating out of Arlington, Virginia. She writes daily at www.lizmair.com.

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