Farm Bill Update: Senate Votes to Advance Farm Bill

June 7, 2012 06:09 AM

Vote on motion to proceed | Amendments expected on defense, ethanol, sugar, crop insurance and SNAP

— Senate approves cloture vote on motion to proceed on farm bill; debate on amendments to follow. As widely expected, the Senate today voted, 90-8, to approve a cloture vote on a motion to proceed on the farm bill (S 3240) - 60 votes were needed to move the bill forward. Now comes the beginning of debate on amendments, which include proposals to reduce crop insurance subsidies and increase food stamp funding. The Congressional Budget Office (CBO) estimates that enacting the Agriculture Reform, Food, and Jobs Act of 2012 would bring total direct spending for those USDA programs to $969 billion over the 2013-2022 period - $23.6 billion less than CBO projects would be spent if those programs were continued as under current law. Several southern senators who voted for the current motion are not expected to vote for the final bill unless there are changes deemed more favorable to southern-planted crops, especially rice and peanuts. The underlying bill ends direct payments to farmers, while expanding insurance subsidies and creating a new safety net called Agriculture Risk Coverage.

— The topics of amendments are already varied, with a defense amendment being pushed by Sen. John McCain
(R-Ariz.) that would require the Defense secretary to outline any national security consequences of the budget sequestration (across-the-board cuts) relative to last year's debt limit law. Other defense-oriented amendments that could be tried by Republicans include restrictions on aid to Pakistan. Sen. Rand Pul (R-Ky.) said he will insist on a vote on an amendment that would cut off foreign aid to Pakistan until Shakil Afridi is released from custody. Afridi is the Pakistani doctor who provided information that helped US forces find Osama bin Laden.

— Sen. McCain also has an ethanol-related amendment that would prohibit federal funding for ethanol storage facility and blender pump construction, except for vehicle fleets of the federal government.

— Some senators are focusing on sugar subsidies. An amendment filed by Sen. Jeanne Shaheen (D-N.H.) would phase out price supports for sugar by 2015. Similar legislation (S 25) was initially introduced by Sen. Mark Kirk (R-Ill.).

— A closely watched amendment by Senate Majority Whip Dick Durbin (D-Ill.) and Sen. Tom Coburn (R-Okla.) would limit subsidies for crop insurance premiums - the government pays up to 62 percent of crop insurance premiums and there currently are not limits on such premium payments. Durbin on Wednesday said it is reasonable "to ask the wealthiest and most prosperous farmers to pay a little more for their crop insurance." Under the coming amendment proposal, premium subsidies would be cut by 15 percent for farmers with annual adjusted gross income exceeding $750,000, a provision that would reportedly save $1.2 billion over 10 years.

— More funding for SNAP, less for crop insurance. Sen. Kirsten Gillibrand (D-N.Y.) would offer an amendment that would replace proposed cuts to the Supplemental Nutrition Assistance Program (SNA/food stamps) with cuts in federal subsidies to the crop insurance program by $4.5 billion over 10 years.

— New York Times article notes farm bill proposal 'could cost US billions'. A New York Times article today (link) notes what some other analysts - and the American Farm Bureau previously said - about the Senate farm bill proposal: it could lead to the planting of higher-risk acres. The article quotes Jim Faulstich, a farmer and rancher in Highmore, S.D., as saying, "If we as farmers expect taxpayers to support premium subsidies, it's only fair that we grow on land that is capable of supporting it," he said. "Could some of this land be profitable without the crop insurance subsidy? I think not." The article also notes that, "By guaranteeing income, farmers say, crop insurance removes almost any financial risk for planting land where crop failure is almost certain." The item quotes Darwyn Bach, a farmer in St. Leo, Minn., saying: "When you can remove nearly all the risk involved and guarantee yourself a profit, it's not a bad business decision. He said that he is guaranteed about $1,000 an acre in revenue before he puts a single seed in the ground because of crop insurance. "I can farm on low-quality land that I know is not going to produce and still turn a profit."

— Sen. Kent Conrad (D-N.D.) has farmer-friendly amendment for wheat, barley growers that he says has budget offsets that will not cut subsidies for other commodities.
It pays to have a Budget Chairman on your side, as that person knows where to find some budget offsets for favored amendments. Conrad noted that in the proposed Senate bill, a measure that its proponents have called "balanced," while others have noted it favors Midwest and northern-tier states at the expense of southern crops, wheat would see a 60 percent baseline reduction under the bill's Ag Risk Coverage Program, while barley would see a 73 percent baseline reduction.

Sens. Snowe, Gillibrand offer amendment to 'stabile price of milk.' Sens. Olympia Snowe (R-Maine) and Kirsten Gillibrand (D-N.Y.) have filed an amendment (SA 2190) to the 2012 Farm Bill (S 3240) that they said "would provide certainty for the nation's dairy farmers by stabilizing milk pricing." Specifically, the amendment would allow dairy industry groups to present milk pricing reforms to USDA for consideration in a public hearing setting; eliminate the end product price formula to set prices for class III milk; and order the Secretary of Agriculture to release the Department's final proposal to industry organizations for approval by referendum. "The last thing Maine's more than 300 dairy farms - many of them small businesses - need in these tumultuous economic times is an outdated and unfair federal pricing scheme that would undercut their competitiveness and prosperity in the marketplace," said Snowe, Ranking Member of the Senate Small Business Committee. "It is critical we protect our farmers, who have created over 4,000 good paying jobs in Maine, from new government imposed pricing schemes that subjectively regulate the dairy market. I hope my colleagues will support our commonsense amendment to aid this critical segment of our economy." Sen. Gillibrand said, "For years, New York's dairy farms have endured volatility in the market - as feed and fuel costs rise, the price of milk plummeted. When our family farms suffer, our whole state and whole economy suffer. Our farmers deserve a better, more just pricing system."

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