U.S. Farm Bill negotiators may begin work next week

U.S. House and Senate negotiators could meet for the first time next week to work on a new US$500 billion Farm Bill, more than a year past due and repeatedly delayed by House Republican plans for steep cuts in food stamps for the poor.

The bill is also expected to cut funding for conservation programs but expand by $1 billion a year the federally subsidized crop insurance program, which now costs around $9 billion annually (all figures US$).

“Depending on the House and Senate schedules, the first, formal conference meeting could be scheduled as early as next week,” said an aide to House agriculture committee chairman Frank Lucas. Under congressional protocol, Lucas will chair the conference committee formed to write a compromise bill between the House and Senate versions.

If Congress is not in session next week, the negotiators may not meet until the following week, said two other congressional staff workers.

The first meeting of House and Senate conferees is a milestone that marks the final round of work on major legislation. Commonly, a final version emerges within a few weeks.

Lucas says he is confident of consensus on a five-year bill.

Analysts said it will be difficult to reconcile the dramatically different proposals for food stamps.

House majority leader Eric Cantor of Virginia spearheaded the Republican drive to tighten eligibility rules for food stamps, ending benefits to nearly four million people in 2014, and save $39 billion over 10 years. His targeted cuts are nearly 10 times the amount proposed by the Democrat-run Senate, which focused on closing loopholes on utility costs.

The Republican-controlled House defeated its initial version of the farm bill, with $20 billion in food stamp cuts, because the cuts were too small to satisfy Tea Party-influenced conservatives. Democrats voted solidly against the cuts.

By comparison, disagreements over agricultural programs appear easier to resolve, although some are lightning rod issues.

The Senate, for example, would require farmers to practice conservation to qualify for premium subsidies on crop insurance and would reduce the subsidy for growers with more than $750,000 adjusted gross income a year. Both ideas are anathema to Lucas.

The Senate backs stricter limits on who can collect farm subsidies and how much they can get per year. And it says the support prices in the House bill are so high they might result in farmers aiming for a subsidy payment rather than a profit in the marketplace.

Rice and peanut growers say the Senate bill is skewed in favour of corn and soybean growers in the Midwest and that they get a fairer deal in the House bill.

An expanded and stronger crop insurance program was the top goal of farm groups in the bill. The House and Senate bills would do that through a “supplemental coverage option” that is an insurance policy covering up to 90 percent of normal revenue from grains and oilseeds.

Cotton growers would get their a revenue insurance program intended to resolve a World Trade Organization ruling against the U.S. subsidies now in place.

Brazil brought the WTO case against the U.S. a decade ago and has not said if the new scheme is satisfactory.

— Charles Abbott is a Reuters correspondent covering U.S. farm, agrifood and ag trade policy from Washington, D.C.

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