Farm bill negotiators still struggle with payment limits, dairy

by Erik Wasson - 01/23/14 4:32 PM ET

House and Senate farm bill negotiators are struggling to get a measure through the House this month with major issues still in contention.

As it stands, the best shot for passage appears to be filing the bill on Monday night and setting up a quick Wednesday vote in the House, sources said. The House breaks for recess on Wednesday for the annual Republican retreat.

{mosads}The timeline would mirror exactly the blitz vote on the $1.1 trillion omnibus spending bill earlier this month.

Getting it done next week would be a heavy lift because negotiators as of Thursday were still dealing with major points of contention, including coming up with a compromise on dairy subsidies and the issue of how to structure payment limits.

The $1 trillion farm bill sets out farm subsidy and food stamp policy for the next five years, and pressure is mounting given that the 2008 farm bill expired Sept. 30. Technically the Agriculture Department should now be enforcing a return to 1949 base law that would cause a spike in milk prices.

The toughest battle in the bill over food stamp cuts has largely been resolved by House Agriculture Committee Chairman Frank Lucas (R-Okla.) and Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.). They have agreed to just under $9 billion in cuts over 10 years.

Payment limits are another matter.

The House and Senate-passed bills lower caps on farm subsidies and tighten what critics like Sen. Chuck Grassley (R-Iowa) call a massive loophole that currently makes the caps meaningless.

Under the pre-conference bills, individuals can receive no more than $50,000 in subsidies and $75,000 in loan deficiency payments on marketing loans. For a couple that adds up to a $250,000 cap.

In addition, the bills look to close the “actively engaged” loophole, which allows farms to add multiple managers, each able to receive subsidies up to the limit, to expand the cap. The reforms would require actual labor to receive subsidies.

The House and Senate bills have differing eligibility limits on crop insurance premium support, with the House barring those individuals with an adjusted gross income of $950,000 and the Senate setting a limit of $750,000.

As the farm bill debate enters the home stretch, the National Sustainable Agriculture Coalition issued a statement Thursday demanding that conferees leave the new limits in place.

“The fundamental issue is whether or not the payment limits, enshrined by Congress in farm bills for four decades, are real or fake. Under current law they are fake. They can fairly easily be sidestepped by adding more and more farm managers to a general partnership that controls the farm,” it said.

The coalition’s Ferd Hoefner said that negotiators are currently talking about punting a revision of the “actively engaged” farmer definition to the Agriculture Department or raising the $50,000 limit.

In addition to payment limits, discussions are continuing on country-of-origin labeling for meat and on a dairy compromise.

For dairy, a compromise could involve enacting a margin insurance program that kicks in when the difference between milk and feed prices drops, but leaving a supply management provision out of the bill. Instead, a market signal related to insurance premiums could be put into effect to encourage farmers not to overproduce.

The labeling issue is the latest chapter in a 12-year battle that pits consumer groups and ranchers against the meat processing industry, Canada and Mexico. The World Trade Organization has ruled the 2008 labeling provision in the farm bill as a trade barrier and the House farm bill has a provision requiring the government to report on efforts to comply with the WTO ruling within 90 days.

Tags Chuck Grassley Debbie Stabenow