Senate Passes Bill to Slash Farm Payments

The Senate, forging an unusual alliance between free-market Republicans and liberal Democrats from urban states, passed a sweeping rewrite Wednesday of farm policy that would phase out most payments to farmers by the year 2002.

Touted as a “freedom to farm” bill to liberate farmers from planting crops according to federal government dictate, the measure passed in a 64-32 vote that ended several days of debate and compromise.

Senate Majority Leader Bob Dole (R-Kan.), a presidential contender long interested in farm issues, called the reforms “really a historic change . . . , the biggest since the 1930s.” He challenged President Clinton to declare his support for the bill this weekend during a reelection campaign trip to Iowa.

Republicans said that the overhaul cuts farm spending 20% over seven years. Taxpayers currently pay farmers about $11 billion yearly in “deficiency payments”--subsidies that prop up market prices for certain farm commodities when they fall below farmers’ costs of production.

Proponents on Wednesday declared that the bill would wean farmers off costly government subsidies and ready them for participation in a booming world market. But farm-state Democrats opposed the legislation, calling it a welfare bill that would disburse payments to farmers irrespective of need for seven years and then strip them of all protection from the whims of weather and world markets.

“The freedom-to-farm proposal will take hundreds of thousands of farmers over the cliff,” warned North Dakota Democrat Kent Conrad. “This is a radical change in farm policy. . . . No one knows what comes next.”

After days of bipartisan huddling, senators favoring an end to farm subsidies crafted a bill that included fixed but declining payments to farmers over the next seven years. The bipartisan compromise also includes the expansion of a program to remove environmentally sensitive lands from cultivation and a continuation of food stamps and other nutrition programs that were key to many Democrats’ support of the bill.

An earlier version of the Senate bill sparked a veto threat from the Clinton administration, and it was unclear whether this Senate bill will be signed by the president. The measure includes some changes that the administration wanted, including a $300-million, three-year mandatory fund for rural water and sewer projects and other rural development.

But the bill must still pass the House, and some defiant House lawmakers are readying a measure similar to the earlier Senate bill.

On Wednesday, senators rejected proposals to phase out programs that set limits on the production of peanuts in two years and sugar in five years. Both programs long have been the targets of criticism and were amended in the new legislation. Dole led the fight against further cutbacks in the peanut program. He is running in GOP primaries next month in Georgia and other peanut-growing states.

But while critics have long targeted such specialty programs as those protecting peanut farmers and sugar growers, the most radical restructuring took place in the centerpiece of the farm bill: subsidies for those who grow cotton, feed grain and wheat. Over a seven-year period, farmers who had cultivated these crops would receive fixed but declining payments, regardless of whether they continue to plant fields as they had in the past.

Farm-state Democrats charged Wednesday that the Republican plan, by giving the highest payments to the most successful farmers, would further decrease the ranks of smaller farms.

They also charged that the formula of fixed-but-declining payments was designed to buy farmers’ support for an end to subsidies with payments that are unconditional for seven years.

Senate Minority Leader Tom Daschle (D-S.D.) led an unsuccessful effort Wednesday to block the payment of such subsidies to farmers who decide not to plant fields at all.

“It’s so unforgivable, so incredibly inexplicable that many senators who claim to be fiscal conservatives are prepared to give a quarter of a million dollars to some producer not to farm,” Daschle said.

But Daschle and other critics of the bipartisan bill won one key concession in negotiations leading up to Wednesday’s vote: a guarantee that permanent farm law written in 1949 stays on the books. The law calls for an outdated and expensive mix of high subsidies and production limits that would kick in if farm laws are not updated.

The prospect that such anachronistic “permanent law” would go into effect when the current bill lapses gives lawmakers a sure incentive to draft and pass a bill governing farm programs after 2002. For critics of the bill passed Wednesday, it guarantees a chance to revisit farm law after the Republican experiment with overhauling subsidies ends.