Farm bill with $8.6 billion in food-stamp cuts passes U.S. House

The U.S. House passed and sent to the Senate a much-delayed bill to set agricultural policy for the next five years, as a coalition of rural Republicans and urban Democrats overcame objections about farm subsidies and food-stamp cuts.

The Republican-led House voted 251-166 for the so-called farm bill, which would cost $956.4 billion over a decade. Senators predicted passage in that chamber as soon as next week, ending a tortured journey for a typically routine measure that was rejected by House Republicans last year in defiance of their leader, Speaker John Boehner.

The plan, which the Congressional Budget Office estimates will cut spending by $16.6 billion over 10 years from current levels, reflects the clout of rural and urban allies who succeeded in keeping farm subsidies and nutrition programs together over Republican objections. Supporters said the bipartisan bill showed political differences can be bridged. Opponents said the bill was rushed to a vote to avoid criticism about its cost.

“Many criticize us and this body for being dysfunctional,” Republican Representative Frank Lucas of Oklahoma, the House Agriculture Committee chairman who led negotiations on a final package, said on the floor before the vote. “I hope this reflects a change in how we do our business here across the board.”

The legislation governing U.S. Department of Agriculture programs emerged after more than two years of debate, with some lawmakers seeking to use the measure to curb spending and end subsidy programs. Senate Majority Leader Harry Reid yesterday predicted the plan, a compromise between competing versions passed by the two chambers, will pass the Senate which could take up the measure as soon as this week.

Bunge, Ace

The bill governs farm subsidies, which encourages planting of soybeans, cotton and other crops by lowering costs for commodity processors including Bunge Ltd. The legislation subsidizes crop-insurance provided by companies such as Ace Ltd. and funds purchases at Kroger Co. and other grocers with food stamps, its biggest cost.

The legislation would cut food-stamp spending by $8.6 billion over 10 years, though additions to other programs bring nutrition-aid cuts down to $8 billion -- one-fifth of the $40 billion sought by Republicans and fought by Democrats and food retailers.

Total savings would be $23 billion over 10 years, higher than the budget-office estimate, after automatic cuts in all federal spending tied to an earlier budget deal are included, according to agriculture committee staff.

Crop-growers facing loss of $50 billion in subsidies retained about two-thirds of it through other aid, according to the Congressional Budget Office. Conservation initiatives would lose $6 billion, largely through consolidation of existing programs. Crop insurers that paid out $17 billion after the severe 2012 were largely unscathed.

The bill ends the possibility, for at least five years, of U.S. farm policies reverting to a 1949 law that would potentially double milk prices.

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