US Senate Passes Farm Bill

Just weeks after formally opening debate on the omnibus legislation that will drive US agriculture spending over the next five years, the US Senate passed its version of US Farm Bill by a 64-35 vote last on 21 June.

The Senate’s version of the Agriculture Reform, Food and Jobs Act of 2012 - which passed with bipartisan support after lawmakers debated 73 amendments over a period of three days, out of the 200-plus that were originally proposed - is projected to cost US$969 billion over the next ten years. Compared with the existing 2008 Farm Bill, it will reduce spending by US$23.6 billion over the same period, according to recent estimates from the Congressional Budget Office.

According to Mary Kay Thatcher of the American Farm Bureau Federation - an advocate of farm interests - the US$23.6 billion in savings comes from US$15 billion in cuts from the US$45 billion commodity subsidy programme; US$5 billion in cuts from the US$64 billion conservation programme; and a US$3.8 billion cut on the US$770 billion tab on food stamps, also known as the Supplemental Nutrition Assistance Program (SNAP).

The major difference between the 2008 Farm Bill and the Senate’s proposed 2012 version is the termination of direct payments and counter-cyclical payments under the commodity title. Farmers will instead receive support through a crop and revenue insurance mechanism that will cover “shallow” losses, protecting farmer’s incomes up to 80-90 percent.

Supporters of the bill, however, have argued otherwise. The bill includes an amendment that places a US$50,000 limit on revenue compensation, thereby ending the unlimited payments entailed in the 2008 law; it also reduces premium subsidies for farmers earning more than US$750,000 a year. However, effective limits on revenue compensation, while attempted in past years, have yet to make it into final legislation.

US Senate Passes Farm Bill

Just weeks after formally opening debate on the omnibus legislation that will drive US agriculture spending over the next five years, the US Senate passed its version of US Farm Bill by a 64-35 vote last on 21 June.

The Senate’s version of the Agriculture Reform, Food and Jobs Act of 2012 - which passed with bipartisan support after lawmakers debated 73 amendments over a period of three days, out of the 200-plus that were originally proposed - is projected to cost US$969 billion over the next ten years. Compared with the existing 2008 Farm Bill, it will reduce spending by US$23.6 billion over the same period, according to recent estimates from the Congressional Budget Office.

According to Mary Kay Thatcher of the American Farm Bureau Federation - an advocate of farm interests - the US$23.6 billion in savings comes from US$15 billion in cuts from the US$45 billion commodity subsidy programme; US$5 billion in cuts from the US$64 billion conservation programme; and a US$3.8 billion cut on the US$770 billion tab on food stamps, also known as the Supplemental Nutrition Assistance Program (SNAP).

The major difference between the 2008 Farm Bill and the Senate’s proposed 2012 version is the termination of direct payments and counter-cyclical payments under the commodity title. Farmers will instead receive support through a crop and revenue insurance mechanism that will cover “shallow” losses, protecting farmer’s incomes up to 80-90 percent.

Supporters of the bill, however, have argued otherwise. The bill includes an amendment that places a US$50,000 limit on revenue compensation, thereby ending the unlimited payments entailed in the 2008 law; it also reduces premium subsidies for farmers earning more than US$750,000 a year. However, effective limits on revenue compensation, while attempted in past years, have yet to make it into final legislation.