House OKs Limits on Water Subsidies : Agriculture: Legislators vote to prevent large farms from receiving federal funds.

Winding up a heated debate that split the California delegation, the House overwhelmingly approved legislation Thursday to prevent large farms from using legal loopholes to receive federal water subsidies meant for smaller farmers.

Attached by amendment to a water projects bill later passed by the House on a voice vote, the legislation sponsored by Rep. George Miller (D-Martinez) seeks to keep large Western farm operations, many of them in California, from taking advantage of the water subsidy program in the 1982 Reclamation Reform Act.

The amendment, revising a key provision in that act, passed 316 to 97, after a highly emotional debate that climaxed several months of procedural wrangling between Miller and Rep. Charles Pashayan (R-Fresno), who sought to keep it from reaching the floor.

Although the House voted overwhelmingly in Miller’s favor, California lawmakers split 23 to 22 over the amendment, reflecting their conflicting environmental and agribusiness constituencies. Strongly supported by California environmental groups as a water-saving measure, the Miller amendment could result in sharply higher water rates for major Central Valley farmers.

“Today’s vote is a major victory for taxpayers, for fairness and for the environment,” Miller said. “It will stop the raid on the U.S. Treasury by a handful of large California agribusiness corporations and, by requiring realistic pricing of federal water, it will also promote efficient use of water and improve delta water quality by reducing demand for that water.”

But prospects for passage by the Senate, the next hurdle for the legislation, were not immediately clear. Miller said that a number of senators have told him they would support the amendment if it passed the House, where he said Thursday’s “stunning” margin of victory “now gives us a fighting chance of getting this to the President’s desk.”

But Pashayan, who argued that the amendment’s “extremely broad language” could end up hurting the small farmers it seeks to protect, predicted that the legislation will face “a very difficult time” in the Senate.

At issue was a provision in the Reclamation Reform Act that was written with the intention of allowing the owners of small farms in the water-scarce West to receive supplies of irrigated water at low, subsidized rates.

Under the provision, farms of less than 960 acres qualify for the subsidies, which are estimated to cost $135 million annually in the Central Valley Project area alone.

But according to a study released by the General Accounting Office last year, large corporate agribusinesses have been able to circumvent the 960-acre limit by dividing their holdings into partnerships, corporations or trust arrangements that technically qualify for the subsidies. The report estimated, for instance, that four farms exceeding the 960-acre limit used the loopholes to receive $1.3 million in water subsidies in 1987.

“These aren’t separate farms,” Miller said. “These are a scheme.”

Pashayan and other opponents argued that, while there may be some abusers of the system, the language in Miller’s amendment was too broad and needed further refinement in a committee process that was largely circumvented in the parliamentary maneuvering to get the legislation to the floor.

“It’s far more radical than most members understand,” said Pashayan, who argued that it could be used against family farmers who operate their holdings in cooperation with one another.

Rep. Richard Lehman (D-Sanger) sought to modify the amendment to allow family members running larger farms to continue receiving the subsidies, but his amendment was rejected, 297 to 118.