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Meet the New Farm Bill

Same as the old farm bill.

Feb 24, 2014, Vol. 19, No. 23 • By DAVE JUDAY
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The president just signed into law the Agricultural Act of 2014, a multiyear, comprehensive agricultural, rural, and nutrition policy measure. As legislation goes, it was rather unremarkable. What was remarkable was the path it followed to approval. Unlike most farm bill debates, which tend to be festivals of bipartisanship and comity, this one split lawmakers—rural from urban, House from Senate, Republican from Democrat—along every political fault including between the Tea Party caucus and the rest of the GOP.

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A farm bill is typically passed every five years, and besides payments to farmers includes international food aid, rural development projects, food safety inspection, and, in recent decades, renewable energy incentive programs. There are enough programs to attract votes from all sorts of off-farm political interests. As President Obama said, it’s the legislative equivalent of “a Swiss Army knife.”

Indeed, the single largest program in the farm bill is food stamps, renamed the Supplemental Nutrition Assistance Program (SNAP) five years ago. The food stamp program was married with the farm bill during the Carter administration in order to build a rural-urban coalition for the 1977 farm bill. This politically arranged marriage served both sides well until now, as SNAP has grown to consume 79 percent of all spending under the farm bill and the political dynamics in Congress have changed.

First, the 2010 elections decimated the ranks of the Democratic Blue Dogs, the moderate to conservative, mostly rural, mostly Southern Democrats in the House. Enough so that when it came time for the minority to assign seven new members to the House Agriculture Committee after the election, there weren’t enough Democrats from farm districts to fill the seats. Several members interested in SNAP took the assignment, notably Reps. Marcia Fudge from Cleveland, now chairman of the Congressional Black Caucus, whose priorities are ending childhood obesity and expanding nutrition programs, and James McGovern of Massachusetts, self-described “unrivaled supporter for social justice and fundamental human rights.” Not your typical Ag Committee members.

Second, the Senate Agriculture Committee was chaired by Debbie Stabenow (D-Michigan), who when writing the first version of the farm bill in 2012 was up for reelection in a state which that year had 1.9 million food stamp recipients and 56,000 farms. Her priorities were clear, and SNAP was preserved. The Senate bill called for a mere $4 billion in cuts over 10 years from SNAP’s $800 billion baseline—about 0.5 percent. Her farm program reforms proved controversial too, leaving an unusual split among farm and commodity groups.

For its part, the House Republican majority was divided between farm program advocates and the Tea Party caucus, whose priority was to trim spending, especially on entitlement programs like SNAP, but on farm programs, too. Majority Leader Eric Cantor feared he could not get a farm bill passed with the two factions splitting the GOP—especially before the 2012 election. He had to balance a bill that would cut enough in SNAP and farm programs to gain Tea Party votes but not so much that it would lose Democratic votes over SNAP or the remaining Republican votes over farm programs. So Speaker John Boehner postponed the bill until after the 2012 election.

Democrats used this to their advantage in farm states. As Jerry Hagstrom recently reported in National Journal, “there is evidence that the unwillingness of House Republicans to take up the farm bill in 2012 helped elect Democratic senators Heidi Heitkamp in North Dakota, Jon Tester in Montana, Joe Donnelly in Indiana, and Claire McCaskill in Missouri.” Donnelly replaced former Ag Committee chairman Richard Lugar. McCaskill defeated St. Louis-area congressman Todd Akin, who opposed the 2002 and 2008 farm bills, though other issues obviously were at play in those races. Heitkamp and Tester, though, were challenged by sitting House Republicans; the two Democrats made an issue of the challengers’ inability to convince the House Republican leadership to bring up the farm bill.

But farm bill issues can’t be dodged forever. If a farm bill is not authorized every five years, farm programs revert to the Agricultural Act of 1949, which is based on commodity price parity to the inflation-adjusted levels of 1910-14 prices. Subsidies would have exploded. News stories about $7 per-gallon milk became a catalyst to including a one-year extension of the farm bill as part of the fiscal cliff fix passed in the wee hours of a lame duck session on January 1, 2013, and that sparked another controversy to add to the mix. Tea Partiers were outraged by the anachronistic 1949 provision in farm legislation and the dominance of SNAP in the debate, and some farm state legislators were having second thoughts about SNAP’s role in the farm bill as well.

By June 2013, Boehner and Cantor’s strategic decision of not scheduling a vote of the farm bill before the 2012 elections was proven wise: The House voted down the farm bill 195 to 234, notwithstanding the unusual amount of political capital spent by Boehner, who issued a memo to all Republicans urging their support and announcing that he would be voting “aye.” By tradition, speakers do not vote on such bills. Despite Boehner’s urging, six Republican committee chairmen did not vote for the final bill—another break with tradition. The bill lost 62 Republican votes, mostly because spending was not trimmed sufficiently. SNAP received a $20.5 billion cut under the plan; farm programs would have been cut by more than 35 percent. House Budget Committee chairman Paul Ryan was one of the chairmen who broke protocol and did not support Agriculture Committee chairman Frank Lucas’s bill.

More significantly, only 24 Democrats voted for the bill; 172 voted against it. Boehner and Cantor had counted on about 70 Democratic votes. The turning point was an amendment by Republican Steve Southerland of Florida, which would have applied federal welfare work requirements to SNAP. It passed 227-198, with 226 Republicans and a lone Democrat, Representative Jim Cooper of Tennessee, voting yes; 192 Democrats voted no. That amendment, along with the depth of the cuts to SNAP, sealed the fate of the farm bill on the Democratic side of the aisle. The lack of deeper cuts to SNAP was the death knell on the Republican side.

Majority Leader Cantor then took the reins from Lucas, with the simple objective of passing something through the House so the farm bill would get to conference with the Senate bill and a broader debate over spending and reform could be had. His strategy was, first, to pass two bills, one divorcing SNAP from the farm bill, and one that would end the provision reverting to 1949 farm subsidies and, second, to pass both of these bills with only Republican votes.

In early July 2013, Cantor and the House Republicans pushed through a farm bill sans a nutrition title. No Democrats voted for the bill; 12 Republicans voted against it. Finally, on July 16, after more than 40 hearings, two markups, 200 amendments, and three years, the House formally sent H.R. 2642—the farm-only farm bill—to the Senate.

Then, in September, as the House and the Obama administration were starting to clash over a funding bill to keep the government open in fiscal year 2014, which would begin on October 1, Cantor pushed through a separate nutrition bill, doubling down on SNAP cuts, providing for $40 billion in cuts despite the Obama White House having issued a veto threat.

To add emphasis to the Republican position, Rep. Southerland—whose amendment doomed the 2013 farm bill—was named a conferee to the farm bill negotiations with the Senate. The Florida Democratic party issued a press release saying, “Congressman Southerland’s insistence on putting ideology ahead of common sense has resulted in a major loss for Florida’s farmers.” Cantor spoke on the House floor in support of the program, likening it to the successful welfare reforms of 1996 passed by the Republican majorities in the House and Senate under President Clinton.

Indeed, the farm bill process was part of a larger effort by the Republican majority in the House to force a showdown with the administration over entitlement spending. Farm programs and SNAP were on the table long before defunding Obamacare stole the headlines and led to the two-week government shutdown. Remarkably, Republicans were willing to play out this drama on legislation that was dear to a loyal constituency—agriculture and rural voters. Yet in the end, neither the Tea Party nor agriculture has gained from the Republican efforts.

After all the time and political capital invested in reform and fiscal restraint, the final legislation that emerged from House-Senate negotiations in early 2014 includes none of the principles for which the GOP was so willing to fight—and shed blood—during the past three years. What emerged is a standard farm bill, spending billions on miscellaneous programs, tens of billions on farm subsidies, and hundreds of billions on SNAP.

SNAP is trimmed by only 1 percent, or $8 billion, and remains part of the farm bill. There are no major reforms or new eligibility requirements for receiving food stamps, except for the exclusion of college students and lottery winners. The permanent law provision is safely ensconced: If a farm bill is not authorized in five years, the threat of a reversion to the 1949 law will still hang over lawmakers’ heads. Spending under the first year of the new bill actually goes up by more than $2 billion.

And farm subsidies, though theoretically trimmed over the long run, arguably have been made worse. According to Senator Pat Roberts, this farm bill “goes backwards towards protectionist subsidy programs.” At issue is the reestablishment of guaranteed reference prices that trigger subsidy payments and how generously they are set. As Roberts explained, “the majority [of farmers will] make the business decision to follow the subsidy signals instead of the market.” In a speech on the Senate floor, Roberts noted that besides himself all four House members in the Kansas delegation voted against the final version of the bill despite its being “arguably the most important” piece of federal legislation to Kansas. That, he notes, should put the rest of the country on alert.

Upon signing it, President Obama said, “with this bill we break the cycle of short-sighted, crisis-driven partisan decision-making and actually get this stuff done. .  .  . And that’s the way you should expect Washington to work.” Sadly, he’s correct. Our expectations about how Washington works really should be that low. The farm bill process was full of sound and fury, signifying nothing.

Dave Juday is an agricultural commodity market analyst.

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