US debt pact may effectively revamp farm subsidies

Mon Aug 1, 2011 9:52pm GMT
 

* Search for long-term savings may limit farm outlays

* "Super committee" may speed up farm bill details

* $5 billion a year 'direct payment' is frequent target

* Food stamps also will be on the table for savings

By Charles Abbott and Rene Pastor

WASHINGTON, Aug 1 (Reuters) - Congress could rewrite U.S. farm policy, from crop subsidies to land stewardship and new-generation biofuels, this year under the deficit reduction plan agreed by lawmakers and the White House.

The plan, which faced key votes on Monday, would create a 12-member "super committee" to find $1.5 trillion in savings from the tax code and entitlement programs, which include crop supports.

"The farm bill rewrite may occur this year," said Rep Michael Conaway, chairman of a key House Agriculture subcommittee, in an assessment shared by officials at two farm groups.

Small-farm activist Ferd Hoefner said if the super committee includes farm program cuts in a report due this fall, "that's the vote ... the commission is going to rewrite the farm bill."

Lawmakers would not be allowed to amend the committee package, which would face a vote by Dec 23. Far-ranging automatic cuts would be made in federal spending if the plan is rejected, although programs for the poor would be shielded.

"Changes should not be made just to save money," said Conaway during a video conference with a sugar conference in Vermont. He said the House and Senate Agriculture committees should be given leeway to write a coherent farm bill that provides a safety net for growers.

"Nutrition programs will be on the table along with everything else," said Conaway. Public nutrition programs, such as food stamps, account for the bulk of Agriculture Department spending. A farm subsidy known as the direct payment, costing $5 billion a year, was cited frequently as a target for deep cuts or elimination.

Leaders of the farm panels have planned to draft the farm law next year, just ahead of expiration of the 2008 law. Written every few years, farm bills are panoramic legislation that cover farm subsidy, export promotion, agricultural research, renewable energy and public nutrition programs.

Farm-program cuts would not take effect until 2013 under the deficit reduction plan, so lawmakers still might draft a farm bill next year. Congressional staff workers said there were few details of how the deficit plan would affect agriculture.

Besides the review of mandatory spending, the deficit reduction plan would cap so-called discretionary spending for 10 years to save more than $900 billion. The savings would be relatively small in the first year or two, which would mean smaller cuts in USDA conservation programs than proposed by the House for fiscal 2012, which opens on Oct 1. (Reporting by Charles Abbott; Editing by David Gregorio)

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