Farm Bill Passes Senate

June 22, 2012 at 3:10 pm 1 comment

The 2012 Farm Bill was passed by U.S. Senate yesterday and will be headed to the House of Representatives for debate starting after the July 4 holiday. The bill passed by the Senate cuts spending by $23.6 billion from current levels. It is expected to receive more scrutiny in the House, as conservative legislators are calling for even deeper cuts. Here is an overview of the key provisions and changes in the Farm Bill.

$4.5 billion cut to Supplemental Nutrition Assistance Program (“SNAP,” formerly known as food stamps)

SNAP is a huge part of the Farm Bill, accounting for 68% of funding in the 2008 Farm Bill. The bill passed by the Senate includes a cut of $4.5 billion, which the Congressional Budget Office estimates would be a loss in benefits totaling $90 per month. For a struggling family, that can be devastating. It is even more crucial that SNAP is supported now, as demand for food assistance has gone way up after the Great Recession– from 28 million to 46 million SNAP participants over the past 4 years. 

Elimination of Direct Payments, Expansion of Crop Insurance

Up until now, the federal government made direct payments to farm businesses growing commodity crops (the “big 5” include corn, soybean, rice, wheat, and cotton), whether they had a good or bad year.  From 2002-2010, the farm  bill allocated $39.4 billion to commodity crops—more than 8 times the amount given to specialty crops (vegetables, fruits, and nuts). This is way out of line when you look at the market value of commodity crops, which is only two times higher than that of the specialty crops.

The Senate eliminated direct payments, but expanded subsidies for crop insurance as the primary safety net for farmers, marking a big policy shift. However, the Senate also adopted an amendment that would place income limits on crop insurance subsidies. Subsidies would be reduced for farmers earning more than $750,000 in adjusted gross income. This would only affect 1,500 of the 1.5 million farmers in the U.S. and would save $1 billion over 10 years.

Rural Development

Prior to the Senate’s votes on amendments, the Senate bill did not include a rural development title for the first time since the mid-nineties. However, the Senate did vote to adopt an amendment that would provide $150 million for rural development. Although this is something, it represents a significant cut from previous spending levels. Since 1996, farm bills have averaged $413 million in rural development. And since 2003, annual appropriations for rural development has been cut by half (after adjusting for inflation). The Senate bill continues this decline in funding.

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Entry filed under: Farm Policy, Healthy Foods. Tags: , .

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