House passes bill to expand farm subsidies

WASHINGTON -- The House overwhelmingly approved an election-year farm bill Thursday that will pour billions of dollars in subsidies into Midwestern and Southern states that are political battlegrounds for lawmakers in both parties.

The bill, which would boost subsidies by 70 percent, marks a reversal of the 1996 Freedom to Farm law that was supposed to wean farmers from government subsidies.

The Senate is expected to pass the measure next week and send it to President Bush for his signature.

Shortly before the House's 280-141 vote, Bush said the bill was not everything he wanted but will "help ensure the immediate and long-term viability of our farm economy."

"We all know that Freedom to Farm didn't work," said Rep. Jo Ann Emerson, R-Mo. "While no farmer wants to depend on the government for anything, it is critical that we provide a safety net to our producers."

$180 billion over 10 years

The bill, which has broad support among major farm groups, would authorize $180 billion in spending over the next 10 years, a $73.5 billion increase over existing programs.

It fattens subsidies for grain and cotton farmers, who have traditionally dominated programs, and provides new payments for everything from milk and lentils to honey and wool.

An 80 percent increase in land-conservation programs will benefit livestock farms and fruit and vegetable growers who historically have received little federal cash.

"We're going back to a strong government presence in agriculture," said Luther Tweeten, an agricultural economist at Ohio State University. "It certainly gives some security to farmers. It comes at a very high cost to taxpayers and to the national economy, however."

Political implications

The political implications were huge. Several major farm states probably will have close Senate races this fall, including Arkansas, Georgia, Iowa, Minnesota and South Dakota.

Bush will need to retain the solid support he received in 2000 across the Plains and South if he seeks re-election in 2004.

Another beneficiary: Sen. James Jeffords, I-Vt., who wanted the new dairy subsidies to replace a New England price-setting system that expired last year. Senate Democrats owe their majority status to Jeffords' switch from the GOP in 2001.

"Throw in an important election season and it makes it very difficult" to stop big subsidies, said Rep. Ron Kind, D-Wis. "It's been a bad process and it's resulted in bad policy."

Economists say the subsidies are likely to encourage overproduction of crops and inflate land rents, which raises costs for farmers who do not own their own land. Bush's support for the bill represented a switch from his administration's earlier criticism of farm subsidies that the legislation continues and expands.

The bill's increased subsidies have angered foreign competitors. The European Union said Thursday it was considering a challenge of the payments before the World Trade Organization. Under WTO limits, certain U.S. farm subsidies cannot exceed $19.1 billion annually. The bill authorizes the Agriculture Department to adjust subsidies to stay within the cap.

Among the countries that would be hardest hit if the U.S. subsidies restrain world commodity prices is Egypt, a cotton producer, economists say.