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Little change to ag policy, even as Peterson loses chair

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Farm combine
A combine brings in a soybean crop on a sunny October day near Worthington. The price farmers receive for their harvest is dependent on a wide range of influences, everything from drought in Russia to what sorts of commodities multi-billion dollar pension funds buy.
MPR Photo/Mark Steil

While Minnesota Democratic Rep. Collin Peterson is out as chair of the U.S. House Agriculture Committee, observers doubt the new face means significant change for federal farm policy. History shows it's almost immune to major new direction, no matter which party is in power. 

The Republican sweep on Tuesday was historic, the largest gain in House seats in more than 60 years. The impact can be seen directly in the Agriculture Committee: 16 of 28 Democrats on the committee lost their re-election bids. 

University of Minnesota Applied Economics Professor Kent Olson said the Republicans replacing them will be looking to make changes.

"Many of them will have this drive to cut spending," he said. 

Olson said traditionally, agricultural programs have escaped big budget cuts. He says he's not sure if the new Republicans in Congress will be less willing to spare the farm budget than others in the past.

"So the real question is, the new members coming in that are looking to cut money, is whether they will have the traditional ties to keep agriculture funded," he said. "Or whether they'll be looking for new ways and new relationships and that the strength of agriculture will be diminished in that atmosphere."

Farm subsidy programs have grown steadily since beginning more than 70 years ago during the Great Depression. 

Last year, federal farm programs paid over $850 million to Minnesota farmers. Nationwide the subsidy bill was over $15 billion. 

William Yeatman of the Competitive Enterprise Institute, a Washington-based think-tank, said he would love to see those payments reduced. 

As a free-trade advocate, he wants the open market to decide who makes money, but even though Yeatman really dislikes the farm program, he doesn't see much change coming. What's more likely to happen is that Tuesday's Republican wave will break and dissolve against the rock solid shore of the congressional farm lobby, he said. 

"They are the undisputed champions of all lobbies. The amount of influence they can exert, it is incredible and it never ceases to amaze me," he said.

Much of that strength derives from the almost iconic stature the farmer holds in American culture, Yeatman said. Like the soldier, the police officer or the firefighter, farmers are often viewed as heroes, so any proposal to cut funding is seen as hurting an American institution. 

In fact, far from producing major change, Yeatman said there might be even less likelihood of a new agricultural direction with Republicans in charge of the House. 

He uses the direct farmer subsidy as an example. Those payments are among the most controversial parts of the agricultural program because they're paid even when a farmer makes substantial profits in the open market. 

Right now, for example, corn prices are high. Farmers will make big money on their grain, but despite that financial windfall, they'll still get a federal payment for their corn acres. 

Peterson favored looking at ways to reduce direct payments but, Yeatman said, the incoming chair, Oklahoma Republican Rep. Frank Lucas, seems resistant to any reduction. 

"He's on the record as preferring direct subsidy programs," says Yeatman. 

Lucas sent a letter to U.S. Agriculture Secretary Tom Vilsack in early 2009 saying it would be "irresponsible" to even think of eliminating direct payments. 

One early test of how the new Congress feels about farm payments could come on the issue of funding renewable energy programs like corn-based ethanol. Several subsidy programs for ethanol and other fuels have expired or are about to expire.

Farmers generally like the fuel subsidies because they boost the price of corn and other grains. If Congress votes in favor of continuing the ethanol subsidies, it could be a signal of how they will handle farm spending overall.