Budget Talks Could Be De Facto Farm Bill Rewrite

Roll Call

Budget Talks Could Be De Facto Farm Bill Rewrite

By Eliza Newlin Carney
6-29-11
Federal belt-tightening has worried Washington lobbyists across the board, but perhaps no sector is more nervous these days than the agriculture industry.

Several factors have thrown farmers and their Washington representatives into a defensive crouch. Bipartisan talks on a budget deal to cut spending and raise the debt ceiling have specifically targeted agricultural subsidies. The budget for the soon-to-expire farm bill, which funds an array of nutrition, energy and agriculture programs, has already been slashed. And growing public concern over commodity prices, nutrition and food safety seems to make agriculture a prime target.

“The mood or sense of Congress right now is: Cut now, ask questions later,” said Alan Kemper, president of the American Soybean Association. Kemper’s group is rounding up farmers to help deliver to Capitol Hill the message that the nation’s farmers are already hurting from natural disasters and should not be disproportionately singled out.

But Kemper acknowledged that lawmakers aren’t giving farmers much of a warm reception these days: “They’re not in a mood to listen right at the present time.”

Several farm-related skirmishes are unfolding on Capitol Hill, fueled in part by the tea party movement and GOP determination to cut spending at all costs. Particularly vulnerable are the billions in direct cash subsidies that farmers receive every year, which are based on formulas rather than need. Such subsidies totaled close to $6 billion in 2010, according to the Environmental Working Group, a leading critic of the agriculture industry.

In a signal of lawmakers’ growing distaste for direct subsidies, Rep. Jeff Flake (R-Ariz.) will introduce legislation next week that would end direct payments to farmers outright. Flake’s move comes on the heels of a mid-June vote by a majority of Senators to cancel billions in ethanol tax credits — a strong message but not the supermajority required to kill the tax credit.

Cuts in agriculture subsidies will almost inevitably be part of whatever budget deal comes out of bipartisan negotiations between Vice President Joseph Biden and Congressional leaders to raise the debt ceiling. Cuts to commodity and crop insurance payments could total $34 billion over 10 years, agriculture lobbyists say.

Some 130 local and national agriculture industry groups wrote to negotiators in mid-June to voice “strong opposition” to any package that would “disproportionately impact” farmers and ranchers.

“We are extraordinarily concerned about the depth and timing of cuts to agricultural policies reportedly being considered for including in legislation to increase the debt limit,” stated the letter addressed to President Barack Obama, Speaker John Boehner (R-Ohio) and Senate Majority Leader Harry Reid (D-Nev.).

Agriculture lobbyists also fret that budget talks could complicate reauthorization of the farm bill, slated for next year. The budget deal could simply cap subsidies overall and leave it up to the Congressional Agriculture committees to work out the details. But negotiators could also spell out specific subsidy cuts, effectively beginning the process of the farm bill rewrite.

“We have some real concerns that a group like that is actually determining the legislation,” said Mary Kay Thatcher, senior director of Congressional relations for the American Farm Bureau Federation, a leading agriculture industry group. The federation sent its own letter to budget negotiators earlier this month.

Whoever ends up writing the farm bill will have less money to work with. The House in mid-June approved a fiscal 2012 agriculture appropriations bill that, among other provisions, cut mandatory funding by close to $2 billion. Acknowledging the inevitability of cuts, the House Agriculture Committee has kicked off a series of subcommittee hearings framed as program audits.

“This farm bill will be developed under a very different fiscal climate than recent farm bills,” House Agriculture Chairman Frank Lucas said in an email. “Obviously, there is going to be no new money. Every program in every title will be on the table, and we will have to make some difficult decisions.”

Of course, farmers still have plenty of loyal allies on Capitol Hill, including Lucas. The Oklahoma Republican helped beat back amendments to the agriculture appropriations bill authored by Flake and Rep. Earl Blumenauer (D-Ore.) that would have limited subsidies to wealthier farmers.

Crop production and processing interests spent $19.4 million on lobbying and made $18.7 million in campaign expenditures in the 2010 cycle, according to the Center for Responsive Politics. The agribusiness sector was particularly generous to members of the Congressional committees that oversee them, according to CRP, giving $7 million to members of the House Agriculture Committee and $7.2 million to Senate Agriculture Committee members.

“We’re up against a very well-funded, well-entrenched vested interest,” said Craig Cox, a senior vice president at the Environmental Working Group.

Still, the political ground under farmers has unquestionably shifted, as evidenced by calls to cut subsidies from House Budget Chairman Paul Ryan (R-Wis.) and Republican presidential hopeful and former Minnesota Gov. Tim Pawlenty, among others. Even the Iowa Farm Bureau Federation last year split from its national allies and called for an end to direct payments to farmers in the 2012 farm bill, opting instead to put the emphasis on crop insurance.

“There’s a confluence of people in both parties who are concerned about increased spending and unjustified subsidies,” Blumenauer said. He added: “The intersection of health, environment, of local economies [represents] a large and growing movement that is, I think, going to be felt politically.”

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