By Chris Clayton
DTN Ag Policy Editor
WASHINGTON (DTN) -- After failing to get a floor debate last year, House Agriculture Committee Chairman Frank Lucas finally got to deliver a speech Tuesday introducing the farm bill for debate and eventual vote.
Lucas, a Republican from Oklahoma, said the farm bill, officially the Federal Agriculture Reform and Risk Management Act of 2013, would cut nearly $40 billion off projected spending over the next decade.
"The FARRM Act is a different farm bill for different times," Lucas said. "There is a reason we put reform in the title. This is the most reform-minded bill in decades. It repeals outdated policies while reforming, streamlining, and consolidating over 100 government programs. It reforms the SNAP program -- also known as the food stamp program -- for the first time since the welfare reforms of 1996. And, it makes tremendous reforms to farm programs."
As Lucas and other House Ag Committee members praised the farm bill on the floor, the House Rules Committee spent the afternoon and evening plowing through 229 amendments and testimony from congressmen explaining why their amendments deserved a vote on the floor.
Shortly before midnight, the Rules Committee announced 103 amendments would get debate time. Those amendments covered issues ranging from changing sugar policy to tightening payment limits for commodity programs. This sets up a marathon session of votes in the House starting Wednesday.
Democrats took to the floor Tuesday in general speeches and on C-SPAN to criticize the $20.5 billion in cuts to the Supplemental Nutrition Assistance Program. Reps. Jim McGovern of Massachusetts and Rosa DeLauro of Connecticut noted a high percentage of people on SNAP work, but earn so little they qualify for food aid. They will get a floor debate on a proposal to strip out the $20.5 billion in cuts -- an amendment likely to fail to the Republican majority.
"Rather than going after this program, and WIC (Women and Infant Children) and SNAP, and programs to help poor people, we ought to be talking about how to end hunger now," McGovern said.
Some of the proposals in the Rules debate would dramatically shift costs for crop insurance, change programs for dairy and sugar farmers and eliminate commodity payments for farmers who sell their corn to ethanol plants.
Rep. Bob Goodlatte, R-Va., will get a vote on his amendment with ten other congressmen to eliminate the dairy supply provisions in the committee bill and replace them with a margin insurance program. Goodlatte's amendment failed in committee, but the dairy reform measures in the bill are among some of the most divisive changes in the farmer safety net. Goodlatte noted the market stabilization program would attempt to manage the U.S. milk supply, leading to higher prices for consumers. Goodlatte and others would rather provide a margin insurance program for farmers ranging from $4 to $8 per cwt.
Goodlatte and others also advocated overhauling the sugar program, which is now built largely on import quotas and tariffs. Goodlatte said the current sugar program, while costing taxpayers minimally, actually costs consumers $3.5 billion annually in higher food prices. "We must request reform of this outdated program," Goodlatte said. Sugar has been an area of debate in both the House and Senate, but attempts to eliminate the current sugar policies have generally failed. Still, a comparable sugar-reform bill had 90 sponsors.
Goodlatte and Rep. Peter Welch, D-Vt., failed to get another amendment approved that would modify the way the Renewable Fuels Standard operates. They each criticized the RFS for now consuming more than 40% of the corn crop to produce have required EPA to lower the RFS if corn stocks fall below a certain threshold. Goodlatte noted that if the provision were in effect today the RFS for 2013 would be 25% lower than it is now.
"The RFS is really hurting our farmers," Welch said. "Dairy farmers, one of the biggest costs they have is the cost of grain and there has been an explosion of price, significantly as a result of the ethanol mandate."
Rep. Bob Gibbs, R-Ohio, will get a vote on his amendment to change target-price provisions in the bill. The Price Loss Coverage program in the House would raise target prices more than 40% for crops such as corn and include even higher increases for other crops. Further, the PLC protection is tied to planted acres instead of base acres. Gibbs and others argue this will distort the market for these crops and affect farmers' planting decisions. "Too many of the major program crop (prices) are set near or above the cost of production," Gibbs said. "That's market distortion."
Gibbs amendment would effectively change the PLC program to the same target-price program that passed in the Senate with a formula based on 55% of the market price of a five-year rolling Olympic average. The Congressional Budget Office also scored the amendment as saving $12 billion over 10 years.
Gibbs noted his amendment is backed by the American Soybean Association, National Corn Growers Association and other state and national farm groups. Still, National Farmers Union issued a statement Tuesday defending the PLC and wanting it to remain in the House bill without changes. NFU argues the rolling average would weaken the safety net during times of multiple-year price declines.
Rep. Ron Kind, D-Wis., who co-sponsored Gibbs' amendment, later said the PLC would take the risk out of farming. Further, by tying the program to planted acres, it would encourage farmers to plant on environmentally sensitive land.
Kind and others also will get a vote on their amendment to clamp down on crop insurance. Kind, DeLauro, and Earl Blumenauer, D-Ore., want to limit the premium subsidy on crop insurance to $50,000, with Kind telling committee members that higher premium subsidies are "not economically justifiable." Further, the three representatives want to ratchet down subsidy levels for farmers making $250,000 to $750,000 in adjusted gross income and eliminate the premium subsidy altogether for those farmers with AGIs higher than $750,000.
The lawmakers also want to lower profit margins for insurers. Currently, USDA guarantees crop-insurance companies have a 14% profit margin. Kind said one of his amendments would lower that level to 12%. Kind questioned why profits are guaranteed. "We don't do that for any other business in the entire country," Kind said. "Yet, all we're asking from the department (USDA) is to bring that down to 12%."
The House will vote on an amendment that would eliminate commodity payments for corn farmers who sell directly to ethanol plants. Georgia lawmakers advocated for that amendment.
Another amendment that will get a vote would require the public release of just how much farmers receive in crop-insurance premium subsidies.
The full list of amendments submitted and those considered in order for debate can be found at http://goo.gl/…
Chris Clayton can be reached at firstname.lastname@example.org
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