- The Washington Times - Wednesday, June 13, 2012

Senate passage of a half-trillion dollar farm and food bill depends in part on resolving a dispute over subsidies between Southern rice and peanut growers and Northern corn and soybean producers. But that regional divide was less in evidence Wednesday, as senators narrowly voted to maintain price supports and quotas for sugar producers ranging from Florida to Montana.

Senators traditionally put their partisanship aside on farm bills, and this year is no different. But the five-year farm policy bill also makes dramatic changes in how farmers are protected from financial and natural disasters and, as in all major changes, some see themselves as losers. In this case, it’s the Southerners.

The bill ends $5 billion a year in direct payments to farmers whether or not they actually plant a crop and programs that reward farmers when prices fall below a targeted level.

Instead, the government would offer a new “shallow loss” program to aid farmers when revenues fall between 11 percent and 21 percent less than five-year moving averages and would put greater emphasis on subsidized crop insurance. Farmers’ regular crop insurance would pay for losses of more than 21 percent.

Corn and soybean growers, which are more subject to natural disasters and rely on crop insurance, welcome the change. Rice and peanut growers, more affected by price fluctuations, say that for them the new safety net is inadequate.

Senate Agriculture Committee Chairwoman Debbie Stabenow, Michigan Democrat, said she is talking to the Southern growers and was “confident that by the end of this process, we will come to the middle.” But she said that might not come until the House and Senate meet to iron out differences on their bills.

The Congressional Budget Office estimates this new shallow loss program could save taxpayers some $8.5 billion over the next five years compared with the current subsidy system. The entire bill, which also covers conservation and research programs, would reduce spending by $23.6 billion over the coming decade.

More than 200 amendments have been proposed to the bill, and in the first vote Wednesday the split was between sugar growers — both beet growers in the north and sugar cane growers in the South — and food and beverage companies and consumer groups who object to the depression-era sugar program that supports prices and protects growers from foreign competition.

The growers won on a 50-46 vote to defeat an amendment to repeal the program. The farm bill does not touch the program, but opponents said it artificially restricts supplies, forces businesses and consumers to pay more for sugar products, and only benefits about 4,700 generally well-off growers. Defenders of the program said it creates a stable marketplace for producers, that U.S. sugar prices are below those of other developed countries and that the program runs at no cost to taxpayers.

Fifteen Republicans joined 35 Democrats in voting against the amendment.

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