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Deeper Cuts Seen as Congress Returns to Farms, Food Stamps

May 14, 2013

That could set up a struggle to pass a farm bill that will satisfy farmers, environmentalists and nutrition advocates.

Lawmakers who last year failed to complete a rewrite of U.S. agricultural policy will restart their effort this week with pressure building for even bigger cuts for farmers and food-stamp recipients.

Federal budget-cutting and criticism that aid has been too lavish during a time of record revenue are driving proposals in the Senate and House agriculture committees to end direct payments to farmers and save $23 billion and $40 billion, respectively, over the next 10 years.

This could set up a struggle to pass a bill that will satisfy farmers, environmentalists and nutrition advocates, said Mark McMinimy, an analyst at Guggenheim Washington Research Group in Washington. "It’s going to become a lot of nibbling among programs, trying to keep the core programs intact," he said in an interview. "Everyone has to be on board, but there are fewer incentives to keep everyone together."

Both panels are scheduled this week to draft their versions of a new five-year law reauthorizing a half-trillion dollars in U.S. Department of Agriculture programs. The Senate is scheduled to begin today and the House a day later.

Crop subsidies benefiting buyers such as Archer-Daniels-Midland Co. and food stamps subsidizing purchases at Supervalu Inc. are prime targets for lawmakers seeking to trim the deficit.

2012 Bill

Last year, a bill passed the Senate that would have resulted in the first major reductions in farm aid since 1996. The measure fizzled in the House, where leaders wanted deeper cuts to food stamps, the biggest USDA expense. The current law, passed in 2008, was extended in January until Sept. 30, after concerns were raised that a lapse in farm programs would double the price of milk.

Senate Majority Leader Harry Reid, a Nevada Democrat, has said his chamber will vote on the committee proposal this month, while House Majority Leader Eric Cantor, Virginia Republican, said he plans floor action this summer, giving both parties time to negotiate a final package before the current law expires.

Senate Agriculture Chairwoman Debbie Stabenow, a Michigan Democrat, said the bill being crafted in her committee creates risk-management tools to protect farmers against market gyrations or weather disasters without subsidies that pay out even in good times.

Deficit Reduction

"By ending unnecessary subsidies, streamlining and consolidating programs and cracking down on abuse, the bill reduces the deficit by billions," she said in a statement last week.

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