House panel opposes Senate crop insurance reforms

WASHINGTON Thu Jul 12, 2012 9:56am EDT

1 of 2. A farm is seen in the distance behind corn fields in Redkey, Indiana June 28, 2012.

Credit: Reuters/Brent Smith

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WASHINGTON (Reuters) - The U.S. House Agriculture Committee challenged two crop insurance reforms approved by the Senate, creating another farm-bill dispute with time running out to enact the new law.

Besides disagreeing on crop insurance, the House would increase crop price supports by up to 40 percent while the Senate would end the subsidies. And the House would cut four times as much money as the Senate from food stamps for the poor.

Agriculture Committee members approved their five-year farm bill, 35-11, early on Thursday at the end of a 15-hour "mark up" session.

Drawn up by committee leaders, it would save $35 billion over 10 years, including $16 billion coming from food stamps and $14 billion in farm subsidies.

Farm lobbyists said it was unlikely the House would act formally on the bill until the lame-duck session following the November congressional elections.

They foresaw a ferocious fight over food stamps and likely efforts to cut crop subsidies more.

If the House does not pass the farm bill before the August recess, it will be virtually impossible to write a final compromise version of the bill before the Sept 30 expiration of the 2008 farm law.

Senators voted, 52-47, to require farmers to practice conservation to qualify for federally subsidized crop insurance.

They voted 66-33 to reduce the premium subsidy available to operators with more than $750,000 adjusted gross income a year.

Both were backed as reforms that would save money and prevent erosion.

But Agriculture Committee leaders decided neither step merited inclusion in their bill and no one suggested adding them. Chairman Frank Lucas, an Oklahoma Republican, said there was no support for the ideas: "We listened to our people."

"It is not our job to decide how big a farm should be," said Collin Peterson of Minnesota, the Democratic leader on the panel, arguing that it would be unfair to limit aid to some growers. "That is what the farm bill is about, putting a safety net on production."

Lawmakers must resolve disagreements between House and Senate bills before legislation can be enacted.

Lucas said he would press for House debate as soon as possible.

On farm subsidies, the Senate would replace traditional subsidies with payments to compensate grain and soybean growers when revenue from a crop was 11-21 percent below average. Crop insurance would cover larger losses.

The House has a similar but less generous plan in its bill and also offers higher support prices.

Both bills would kill the $5 billion a year "direct payment" subsidy that is a target of reformers. Each would create a separate revenue protection program for cotton.

The food stamp cuts were attacked from both sides during the bill-drafting session. There were unsuccessful proposals by Democrats for no cuts or to match the Senate at $4 billion and from a Republican to double the cuts to $33 billion.

"We're going to lose some votes, no question about it," said Peterson, anticipating some loss of support for the bill.

Just before approving the bill, the committee adopted an amendment by Iowa Republican Steve King to prevent state laws, such as California on eggs, from restricting the sale of farm products based on how they were produced.

Beginning in 2015, California will bar sale of eggs from chickens kept in so-called battery cages, a complementary step to its rule on poultry care.

King said his amendment would reinforce the Constitution's guarantee of interstate commerce. Kurt Schrader, Oregon Democrat, said the amendment, by infringing on state power, would be so controversial it could kill the farm bill.

The House bill also would create an undersecretary for trade at USDA to put more emphasis on developing U.S. exports and assuring fair trade rules.

(Reporting by Charles Abbott; editing by Jason Neely)

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