The U.S. Senate passed its version of the Farm Bill Thursday by a vote of 64-35. The five-year, half-trillion-dollar bill cuts farm subsidies and land conservation spending by about $2 billion a year, but largely protects sugar growers and some 46 million food stamp beneficiaries.
Minnesota two Democratic senators, Amy Klobuchar and Al Franken, both voted for the bill. It would mean big changes for Minnesota farmers, including an expanded safety net through federally subsidized crop insurance.
After the Senate passed the bill, Sen. Debbie Stabenow, D-Mich., who chairs the Agriculture Committee, took a victory lap, pointing out the bill's bipartisan support and more than $23 billion in deficit cuts.
"This is about reform," Stabenow said. "It's about reducing the deficit; it's about creating jobs."
Most senators representing Southern states opposed the bill. They argued that ending direct payment subsidies and relying more heavily on crop insurance favors corn and soybeans and puts crops grown in the South, such as cotton, rice and peanuts, at a disadvantage.
Now, action turns to the House. Klobuchar said she hopes the House adopts most of the Senate bill.
"I have no doubt they will make some changes and especially try to work with the South, but right now this is a strong bill for Minnesota," she said.
Members of the House Agriculture Committee agree with their counterparts in the Senate that the federal government should end direct payments to farmers and expand federally subsidized crop insurance.
But U.S. Rep. Collin Peterson of Minnesota, the top Democrat on the House Agriculture Committee, said one part of the Senate bill won't fly in the House. That's a measure that would create an additional layer of insurance to cover farmers' losses that aren't covered by crop insurance.
"We're not big fans of this revenue thing that's in the Senate," Peterson said.
Instead, Peterson said, the House is likely to keep in place the countercyclical target price system, which would get the axe under the Senate plan.
"The way that works is, if you have a good crop and a good price, the government doesn't pay you anything," Peterson said of the House plan. "That's what people would like us to do."
That system relies on a government-established target price.
But why would a market-oriented and Republican-led House allow the government to keep setting a floor for market prices?
"The reason for that is that we don't have a free market in agriculture," Peterson said.
Because other countries subsidize agriculture, he said, U.S. producers need support to stay competitive.
On that note, the Senate beat back several attempts to end government support for the sugar industry, including Minnesota's sugar beet producers.
But in a sign that farmers are getting a bit more scrutiny on Capitol Hill, an amendment did pass that limits crop insurance subsidies for farmers making more than $750,000 a year. Franken and Klobuchar both voted in favor of that amendment.
Kevin Paap, president of the Minnesota Farm Bureau, said his group opposes the amendment and will try to keep it out of the House bill.
"We want to make sure that we have a farm bill that's available to everyone and not based on size," he said.
Paap and others argue that taking the largest producers out of the insurance pool could drive up premiums for other farmers.
Nearly 80 percent of the bill's nearly $1 trillion cost over the next decade comes from food stamps and other nutrition programs.
The Senate bill cuts $4 billion from that section over the next 10 years, largely by limiting eligibility slightly.
Jason Reed, the director of strategy of Hunger Free Minnesota, a nonprofit group, said the changes in the Senate bill would have no effect on the more than 500,000 people in Minnesota who rely on food stamps.
"Overall, the Senate bill is certainly far better than the House bill that we've been seeing early on," he said.
Plans floating around the Republican-controlled House would cut more than $15 billion from food stamps.
House Agriculture Committee Chairman Frank Lucas, R-Okla., said he's going to have to thread a very thin needle to pass the bill.
"Do not be surprised if you see some of my friends on the left want to undo all of the nutrition reforms," Lucas said. "By the same token, some of my friends on the right might want to save twice or three times as much money."
Lucas hopes to have his bill on the House floor late next month.
The House and Senate will need to work out a compromise deal before Sept. 30, when the current farm bill expires.