Senate Passes Five-Year Farm Bill, Begins New Era for U.S. Farm Policy
The Senate overwhelmingly passed the 2013 Farm Bill with a very strong of vote of 66 to 27, with 93 senators voting. The passage of the bill represents an historic pivot in U.S. farm policy, away from the era of direct payments to large numbers of commodity farmers to crop insurance, which must be individually purchased by each farmer and offers financial support – in the form of a crop insurance indemnity payment – only when they incur a verifiable loss, including weather damages or commodity price fluctuations.
The issue is now in the House of Representatives where the debate continues. Both bills pare overall Farm Bill spending, with the Senate version projecting $24 billion in savings over ten years and the House version projecting $40 billion in savings over the same period of time. Eighty percent of Farm Bill expenditures will go to food assistance programs and roughly 20 percent goes to farm programs, including conservation, renewable energy, commodity programs and crop insurance.
The dramatic shift in farm policy was best encapsulated by a quote made by Senate Agriculture Committee Chairman Debbie Stabenow (D-MI) during the debate. “Crop insurance is insurance. The farmer gets a bill, not a check,” she said. The Senate bill would cut $24 billion from farm spending over 10 years, and includes a provision tying the ability of a farmer to purchase crop insurance to conservation compliance requirements.
Prior to the bill’s passage, USDA Acting Deputy Secretary Michael Scuse pointed out that the performance of crop insurance during last year’s drought was clear proof of the program’s value. “We provided insurance for about $116 billion worth of crops last year,” he said. Scuse added, “We’ve paid about $17 billion in indemnities. I think that shows this program worked and it worked as it was intended. We got the money out to the producers and it’s going to help an awful lot of people stay in business that, had we not had a really good crop insurance, may not have been farming this year.”
Despite strong opposition from Chairman Stabenow, the bill contains an amendment sponsored by Senators Dick Durbin, (D-Il) and Tom Coburn (R-OK) which would reduce the premium discount for farmers in higher income brackets or those from larger or more successful farms. Chairman Stabenow said the amendment would raise premium costs by 40 percent for the affected farmers and would reduce the amount of acreage that must comply with federal conservation standards.
Neither the conservation compliance measure nor the premium subsidy limit is in the bill passed by the House Agriculture Committee.