January 31, 2014


US to approve farm bill on crop subsidy system



In an aim to reform the federal government's crop subsidy system, the US House approved a five-year, nearly US$1 trillion farm bill on Wednesday (Jan 29), but cutting food stamps to pare the deficit.


The mammoth bill, which has been some three years in the making and endured more than one collapse in negotiations in 2013, enjoyed bipartisan support in passing 251-166.

It now heads to the Senate where it could be voted on as early as Friday (Jan 31). It is expected to pass.


The White House said that President Barack Obama would sign the 959-page bill should it reach his desk.


"Overall, this legislation is a positive step forward that invests in rural development, bio-based energy, conservation, and agricultural research and that will provide certainty and stability for families in need, for farming communities, and for our commodity markets," senior House Democrat Steny Hoyer said.


The compromise farm bill reduces the US deficit by some US$23 billion, far less than what was sought by dozens of House conservatives eager to dramatically slash federal spending.


Republican Frank Lucas, chairman of the House Agriculture Committee, said the bill "contributes major savings to deficit reduction, significant reforms to policy, and yet still provides a safety net" for needy Americans as well as for agriculture producers.

But many House Democrats were upset over the US$8 billion cut to supplemental food assistance.


The federal programme that helps more than 47 million Americans will include new anti-fraud measures that shed costs and ensures lottery winners and dead people cannot collect the food stamps. It slightly reduces benefits for approximately 850,000 low-income households, according to a Congressional Budget Office (CBO) estimate.


The bill spends about US$489 billion on nutritional and agriculture programmes from 2014-18, according to the CBO. Approximately 80% of that goes to food stamps and 20% for agricultural subsidies.


The legislation does away with highly controversial direct payments that were being doled out to farmers even if they no longer cultivated their fields or if crop prices rose. The programme, begun in 1996, was created as an income-smoothing operation for the volatile farming industry. But its high cost-about US$5 billion in 2012 alone-made it a prime target for reform, and it was replaced by extensions to a crop insurance programme.

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