The farm bill regulates farm subsidies, rural programs, and domestic and international food aid. It is a 5-year bill that was last passed in 2008 and extended in 2012. Different versions of the bill are (slowly) making their way through congress. The Senate version passed out of committee on May 14th with the House version passing committee on May 15th. The full Senate is currently debating the bill with arguments over subsidies for crop insurance, spending cuts for food stamps, and labeling for genetically modified foods, to name a few. Both houses of congress agree that direct payments to farmers should be repealed and there appears to be less partisanship in these debates than in other legislation. The Senate is expected to finish work on the bill at the beginning of June; the full House is expected to consider the bill this summer.
DIRECT PAYMENTS & SUBSIDIES: Currently, crop farmers receive direct payments totaling about $5 billion; savings from the elimination of these payments would be directed into other subsidy programs such as new programs for peanut, cotton and rice farmers. The bill adds money to support fruit and vegetable growers. It also restores insurance programs for livestock producers. Both the House and the Senate are keeping the sugar program intact, including price supports and import restrictions.
FOOD STAMPS: The House bill cuts projected spending by nearly $40 billion over the next 10 years. Of that amount, $20.5 million would come from cuts to the Supplemental Nutrition Assistance Program (SNAP), otherwise known as food stamps. The Senate bill cuts projected spending by $23 billion, with $4.1 billion of cuts from food stamps.
CROP INSURANCE SUBSIDIES: The federal government currently pays for approximately 62% of crop insurance premiums and also subsidizes the crop insurance companies. The Senate has voted to limit the amount of government subsidies farmers receive based on the size of their operations.
The current, extended, Farm Bill is set to expire on September 30, 2013. For those of us who work in agriculture every day this legislation is important, not only in managing risk, but also because it underscores the importance of food production in this country.