Farm Bill Advances In Senate Controversial Legislation Cuts Farm Spending By $13.4 Billion

The Senate Agriculture Committee resolved its squabbles over subsidies for peanuts and sugar Thursday and approved a bill cutting projected farm program spending by $13.4 billion over seven years.

The package, approved 9-8, now goes to the Senate Budget Committee, where it will be folded into a huge omnibus bill that aims to eliminate annual federal budget deficits by 2002.

After negotiations overnight between Sen. Rick Santorum (R-Pa.) and lawmakers representing sugar and peanut-growing interests, the panel struck a fragile compromise that slightly lowered federal supports for those crops, but fell short of the reforms Santorum had sought.

He voted “present” as a protest, allowing the bill to pass by one vote. Pennsylvania is home to Hershey Foods Corp. and numerous smaller candy makers who oppose policies that would raise the price they pay for sugar and peanuts.

Separately, a House-Senate conference committee completed the agriculture portion of the 1996 appropriations bill. While the Agriculture Committee sets broad farm policy, much of the spending is subject to Appropriations Committee approval.

Despite the progress in the Senate and in the Appropriations Committee, the farm bill remains stalled in the House. House Agriculture Committee Chairman Pat Roberts (R-Kan.) threw in the towel Wednesday and took his Freedom to Farm Act, backed by House Speaker Newt Gingrich (R-Ga.), to the Rules Committee to be inserted into the omnibus House budget-cutting bill.

Senate lawmakers took note Thursday of that step, unprecedented for the House Agriculture Committee. “If we don’t write it, somebody else is going to,” said Sen. Ben Nighthorse Campbell (R-Col.), who sought protection for the state’s sugar beet industry.

The Clinton administration opposes both bills, although Agriculture Secretary Dan Glickman said the Senate’s more moderate version appears “less bitter” to wheat, feed grains, cotton and rice than the House package. “Obviously we think the cuts are too big,” Glickman said. The administration is backing $4.2 billion in savings over seven years.

The Senate bill amounts to a “no frills” version of existing farm law because it retains the current system of loans and subsidies for seven key crops, including wheat, corn, cotton and rice.

“What they have left is less of the same,” said Sen. Kent Conrad (D-North Dakota), who opposed the bill. “It reminds me of lipstick on a corpse.”

Even so, it embraces more market-oriented changes by abolishing acreage-idling programs which dampen production at a time of booming exports. It would also place spending caps on crop subsidies, and raise to 30 percent from 15 percent the amount of cropland ineligible for government payments.

Wheat, corn and other feed grain farmers would have wide latitude to plant almost any crop, without losing their eligibility for subsidies. Cotton and rice growers would have limited powers to change their crops, while still qualifying for subsidies.

Total savings are at least $13.4 billion, with spending for crop payments cut about 17 percent, or $8.8 billion. Another $4.7 billion is saved by reducing export subsidies, overseas corporate advertising programs and federal payments for butter, cheese and non-fat dry milk, among other changes.

Cotton growers opposed more drastic changes out of fear farmers would rush to plant more cotton, resulting in depressed prices.

The panel voted 14-4 to adopt an amendment by Chairman Richard Lugar (R-Indiana) that reflected the negotiations between Santorum and western and southern state lawmakers protecting peanuts and sugar growers.

The accord reduces the government floor price on peanuts to $628 a ton from $678 a ton. Peanut growers won on a bid to renew the program for another five years. It was set to expire after 1997.

Growing restrictions on sugar were abolished. The government’s floor price on sugar would in effect be lowered to 17 cents a pound from 18 cents, but only in rare instances. In exchange, sugar growers got the program extended to 2002. It also was set to expire after 1997.