Big vote for farm bill could beat Bush veto

WASHINGTON (Reuters) - The U.S. House of Representatives on Wednesday passed and sent to the Senate a $289 billion, five-year farm bill that expands nutrition and biofuel programs in the face of President George W. Bush's promise to veto it.

Agriculture Committee leaders said the 318-106 vote, a 3-to-1 margin, for the bill showed the House can override a veto, which could be issued next week. A two-thirds majority is needed in the House and Senate to override a veto.

Two-thirds of the money in the farm bill would go to public nutrition programs like food stamps. Lawmakers gave nutrition the largest increase in the farm bill, $10.3 billion over 10 years. Connecticut Democrat Rosa DeLauro called it a historic increase that responds to rapid rises in food prices.

Written every few years, farm bills are panoramic legislation covering dozens of programs. Land stewardship programs were allotted a $4 billion increase, biofuel development $1.2 billion and specialty crops $1.35 billion.

Funding for crop supports and crop insurance was cut by several billion dollars.

In a shift in emphasis on biofuels, the bill reduces the tax credit for corn-based ethanol by 12 percent, to 45 cents a gallon beginning in 2009. It offers a $1.01 a gallon tax credit through 2012 for ethanol from cellulose, found in grasses, woody plants and crop residue.

"If this bill makes it to my desk, I will veto it," Bush said in a statement on Tuesday. He said the farm bill has at least $10 billion in hidden spending, subsidizes millionaire farmers and contradicts the free-market reforms the United States seeks in world trade talks.

Bush has vetoed nine bills during two terms as president and been overridden once, on a waterway bill last fall.

"After this vote, it's pretty clear we're going to override the veto," said Agriculture Committee chairman Collin Peterson, Minnesota Democrat. The Republican leader on the panel, Virginia Rep. Bob Goodlatte, a backer of the bill, said the 3-to-1 margin "is very significant."

U.S. Agriculture Secretary Ed Schafer said the administration will fight to sustain the veto.

The Senate is expected to give final congressional approval on Thursday. Congress also will send Bush a stopgap bill to keep agricultural programs running through May 23 while the override is decided.

Speaker Nancy Pelosi said the new nutrition funding was a leading reason, along with support for new biofuels, to vote for the farm bill. "I too am not satisfied that it does enough in terms of farm subsidies," said Pelosi.

Food prices are forecast to rise by a sharp 4.5 percent this year. The farm bill revises the food stamp formula to result in larger benefits for some recipients and puts an additional $1.25 billion into donations to food banks. Ten million people will benefit from the changes, said DeLauro.

Some 27.7 million Americans received food stamps at latest count. Average benefit is $1 per meal.

"Where's the real reform?" asked Wisconsin Democrat Ron Kind, who said the marquee reform -- denial of some farm subsidies to wealthy Americans -- would affect only 0.2 percent of America's 2 million farms. "Give me a break."

For months, farm subsidy rules were regarded as the test of reform for the bill. Under a final-round proposal, the bill would bar all farm subsidies to people with more than $500,000 in off-farm income and deny "direct" payments to those with more than $750,000 income from farming.

"We put a limit on farm income for the first time," said Peterson. "This is a good bill. It has a lot of reform."

The income limits are estimated to save $62 million a year. Direct payments, guaranteed to growers annually, total $5.2 billion a year. Two other subsidies, price supports and counter-cyclical payments, are available when prices are low.

Congress spent more than two years developing the farm bill. During that period, grain and soybean prices soared around the world, making food security an issue.

U.S. farm groups, recalling the collapse of market prices after a brief boom in the 1990s, opposed any reduction in the federal safety net because of rising costs for fuel, fertilizer, pesticides and seed.

(Editing by David Gregorio)