House Farm Bill Coming to Floor

Groups Take Sides as Divided House Seeks to Advance Farm Bill

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
Connect with Chris:
As debate went on Thursday about the farm bill, the Kansas City Federal Reserve released a survey showing credit is tightening for farmers in parts of the Plains and Midwest. The KC Fed noted farm loans were rejected at 8% higher rates than a year ago because more farmers are struggling with cash flow. (Chart by the Kansas City Federal Reserve)

OMAHA (DTN) -- Critics of crop insurance and the farm programs lashed out Thursday at the lack of amendments they got for floor debate on the farm bill in the House of Representatives. But lawmakers did get their debates on the House floor to overhaul the sugar program and phase out all farm subsidies.

Much of the lead-up to the floor debate has been on changes to the Supplemental Nutrition Assistance Program. Several amendments to change the House Agriculture Committee's provisions on commodity programs and crop insurance didn't make the cut for floor debate.

House Agriculture Committee Chairman Michael Conaway, R-Texas, is rallying rural Republicans to pass the bill by defending farm programs, but cutting aid to SNAP recipients under the argument that tough love will lead to fewer people in poverty. Conservative groups, however, lashed out that the lack of effort to tighten crop insurance or commodity programs should also defeat the bill.

The House was debating amendments in succession Thursday afternoon with plans to hold roll-call votes on amendments later Thursday evening before moving to a vote to advance the full bill to the Senate.

An amendment by Rep. Virginia Foxx, R-Va., to remove production limits in U.S. sugar and remove import barriers received lengthy debate but was overwhelmingly defeated 137-278 late Thursday afternoon.

The one amendment allowed on farm programs would phase them out completely. Rep. Tom McClintock, R-Calif., said his amendment would allow commodity and crop insurance subsidies to continue for two years, then would phase them down over the next decade. Under such elimination of farm programs, McClintock said, if consumers want more wheat and cabbage and less soybeans and sugar, then farmers would grow more wheat and cabbage and less soybeans and sugar.

"There are no good arguments for continuing these subsidies," McClintock said. "Most farmers don't get them right now. Those that do tend to be major corporations and not family farmers."

Regarding crop insurance, McClintock said insurance leads farmers to take more risks tied to distorted price signals. "By subsidizing crop insurance, we once again corrupt the price signals farmers need to make rational decisions."

While he's opposed to the underlying farm bill because of the SNAP cuts, Rep. Collin Peterson, D-Minn., spoke out against McClintock's amendment. Peterson said he was in Congress in 1996 when the Freedom to Farm legislation sought to eliminate farm programs. "And it ended up costing us five times more than what we saved because it didn't work," Peterson said. "This is a fantasy out there for some people. People have no clue what it costs to farm nowadays. What kind of risks it takes to be in farming."

Without farm programs, more farmers would go out of business and only the wealthiest people would be able to farm, Peterson said. "The people who will farm are the people with deep pockets, and that's not what we want in this country."

McClintock later countered that the reason farm programs got more expensive after Freedom to Farm was because Congress put more money into farm subsidies. He then pointed to New Zealand, an agricultural-dependent country, which expanded its farm production after the safety net was eliminated.

Reps. Rick Crawford, R-Ark., and Frank Lucas, R-Okla., defended farm programs and linked the importance of food security to the ability to provide farmers a sound safety net.

"Our ability to feed ourselves is crucial to our national security," said Rep. Rick Crawford, R-Ark., adding that farm subsidies are much higher in other countries.

House Ag Chairman Michael Conaway, R-Texas, questioned the comparison of U.S. agriculture to New Zealand. "U.S. production is a bit more complicated than anything New Zealand may or may not be doing," Conaway said, adding that U.S. farmers compete against farmers receiving much higher subsidies. "China spent $100 billion on three products in one year to subsidize their products."

If the rest of the world would go to a level playing field, then U.S. farmers would compete, Conaway said, but U.S. farmers need a safety net. He called on colleagues to defeat the amendment and protect farmers.

"Let's show them we support them," Conaway said. "Let's show them we have got their back. A yes vote says 'Nevermind, we don't care about you.' A no vote for McClintock sends exactly the message we want to send, and I'm hoping this is a stunningly large no vote so the American producers -- who are some of the hardest-working, best people on the face of the Earth -- can understand this Congress understands the unfair, foreign competition in which they are competing with."

Following Conaway's call, McClintock's amendment to phase out farm programs went down in flames in a 34-378 vote with no Democrats backing McClintock's amendment and just a few conservatives supporting it.

Yet while reformers complain about lack of action on farm programs, the Kansas City Federal Reserve released a credit survey Thursday reflecting some of the struggles facing farm families in parts of the Midwest, Plains and Rocky Mountain states covered by the KC district. The Fed's credit survey cited that, in the first quarter of this year, farmer cash-flow shortages also have led to more farmer loan rejections this year. More than 8% of loan requests in the district were denied, and the denials were higher in states such as Oklahoma because it is dominated by wheat production.

To see the full results of the Kansas City Federal Reserve ag credit survey, visit https://www.kansascityfed.org/….

CRITICS CALL OUT LACK OF REFORMS

Daren Bakst, a fellow in agriculture policy at the Heritage Foundation, said on a conference call Thursday that the House's unwillingness to trim farm programs should be a disappointment to anyone who wants to reform farm programs or believes in open, transparent government. But the failure of House leadership to allow more amendments on farm programs or crop insurance also reflects a moral victory.

"They can't win on policy so they had to pull the amendments," Bakst said.

Bakst cited an amendment that would have cut premium subsidies from 62% to 49%, which would save about $8 billion in federal spending over 10 years. Bakst rejected arguments such a move would dramatically cut insured acres, pointing to a Congressional Budget Office figure that the change would reduce insured acres just one-half of 1%.

"Maybe the Senate will be concerned about conservative principles," Bakst said.

The current farm bill allows individuals to receive commodity payments with incomes up to $900,000 adjusted gross income ($1.8 million for married couples). Citizens Against Government Waste cites the House farm bill would exempt all pass-through entities from the AGI limit. Partnerships, joint ventures and limited liability corporations would be exempt from the $900,000 cap, which would essentially allow wealthier individuals to file paperwork and convert their operations.

Pass-through entities are also exempt from any payment limits under the House bill, said Allen Johnson, director of government affairs for Citizens Against Government Waste. The Rules Committee declined to advance amendments to cap farm payments and crop insurance to people with adjusted gross incomes of $500,000 or less.

"Not only is this (farm bill) not tightening up commodity programs, it's actually loosening them," Johnson said. "So while it is tightening restrictions on SNAP recipients who sometimes are the most poor in our society, it is loosening restrictions on millionaires and billionaires, and that is egregious and should be debated robustly on the floor of the House of Representatives."

Caroline Kitchens of the group R Street Institute said the rejected crop-insurance changes were not "poison pills" but "common-sense reforms" that had been championed in budgets by both President Donald Trump and former President Barack Obama.

"Not only is it terrible optics for Republicans, but it's also morally indefensible to be demanding more from the poorest Americans who are welfare recipients while at the same time just making it easier for the richest farmers to game the system."

Scott Faber, senior vice president for government affairs at Environmental Working Group, said his group has found 18,000 people living in major cities who receive farm-program payments. The House farm bill would expand those numbers as the bill allows cousins, nieces and nephews to enroll in farm programs, Faber said.

"We are having an Orwellian debate on the floor of the House today as we debate whether to expand work requirements for some of our poorest brothers and sisters while simultaneously ignoring the fact that tens of thousands of Americans receive farm subsidies regardless of whether they work on the farm."

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(AG)

Chris Clayton