June 11, 2013 / 12:22 AM / 6 years ago

Senate passes farm bill; food stamp fight looms in House

WASHINGTON (Reuters) - The Democratic-run U.S. Senate passed a $500 billion, five-year farm bill on Monday that expands a taxpayer-subsidized crop insurance program and rejects sweeping cuts in food stamps for the poor being pursued in the House of Representatives.

The bill passed easily, 66 to 27, and now goes to the Republican-controlled House.

It was the second time in a year that the Senate has sent a five-year farm bill to the Republican-led House, which let the bill die at the end of 2012.

Analysts say food stamp cuts are the legislation’s make-or-break issue, given otherwise broad similarities between the two versions.

While the Senate would trim food stamps by $4 billion over a decade, the bill awaiting debate in the House calls for a $20 billion cut, the largest in a generation. Some 2 million people, or 4 percent of enrollment, would lose benefits.

“I do not support what the House is doing, $20 billion (in cuts),” said Senate Agriculture Committee chairwoman Debbie Stabenow, Democrat of Michigan. Still, she was confident the issue would be resolved and “very optimistic” of sending a farm bill to President Barack Obama for enactment.

Agricultural lobbyists and analysts said the Senate vote made a new farm law more likely but not certain this year.

Farm bills are panoramic legislation covering food aid, rural economic development, biofuels development and agricultural research along with crop subsidies, food stamps and conservation.

A bruising fight was possible in the House over food stamps. Some 134 of the 201 Democrats in the House signed a resolution against any cuts. And some Republicans want steeper cuts in farm programs as well as in food stamps, which could jeopardize passage of a bill.

House debate on the farm bill is expected this month. Speaker John Boehner on Monday promised “a vigorous and open debate” on the legislation. The National Farmers Union urged Congress to complete work before a stop-gap extension of farm law expires on September 30.

The Senate and House bills both streamline soil conservation programs, eliminate the $5 billion a year “direct payment” subsidy to farmland owners, whether they farm or not, and create programs to protect farmers from year-to-year fluctuations in revenue from a crop.

Both would expand the federally subsidized crop insurance program by the creation of so-called revenue insurance policies for cotton and peanuts and a “supplemental coverage” policy allowing grain and soybean farmers to insure up to 90 percent of crop revenue.

“This bill is easily matched up with what they’re doing,” said Sen John Hoeven, North Dakota Republican. Last year, corn and soybean growers favored the Senate bill while peanut and rice planters supported the House.

During debate in late May the Senate rejected amendments by Pat Roberts, Kansas Republican, for $31 billion in food stamp cuts and by James Inhofe, Oklahoma Republican, to convert food stamps to a grant program and cut funding by $300 billion.

The Roberts and Inhofe amendments are similar to approaches popular among House Republicans to reduce food stamp costs.

Rice and peanut support prices would be fixed close to projected average market prices under both bills. Asked about the potential of large payments, Stabenow said “I view it as a transition” for rice and peanuts to reliance on crop insurance.

Carl Zulauf, an agricultural economist at Ohio State University, said high prices for other crops would likely discourage farmers from expanding rice or peanut plantings.

Federal spending on crop insurance would climb by 5 percent under the Senate bill and by 10 percent under the House bill. The government pays 62 cents of each $1 in crop insurance premium.

Seventeen insurance companies sell crop insurance. They range from independent companies to subsidiaries of companies such as Archer Daniels Midland, Deere and Co., Wells Fargo, Ace Group and Allianz.

Reporting by Charles Abbott; Editing by Ros Krasny, David Brunnstrom and Bob Burgdorfer

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