Senate OKs subsidy cut for big farms

WASHINGTON -- The Senate voted overwhelmingly Thursday to cut subsidies to big grain and cotton farms by capping government payments at $275,000 per operation.

The 66-31 vote followed public disclosures about large payments, sometimes exceeding $1 million in one year, that farms have received in recent years. It was a bitter defeat for senators from the South, where cotton and rice interests especially depend on federal subsidies.

"That's a big vote. It's the new reality in farm programs," said Sen. Pat Roberts, R-Kansas.

The $275,000 limit was added to a Democratic-authored overhaul of farm programs that would extend subsidies for another five years.

Under existing rules, growers are generally limited to $460,000 in annual payments, but subsidies essentially are uncapped under a program that guarantees minimum revenue for grain, cotton, soybeans and other commodities. A House-passed farm bill has even more generous limits.

The Senate approved another amendment that would restore food stamps to many legal immigrants by cutting off subsidies to growers who periodically leave their farms fallow.

The cutoff would free up about $140 million a year for food stamps.

"Capping farm payments will restore integrity to farm programs," said Sen. Charles Grassley, R-Iowa. "Taxpayers can now have confidence that farm assistance will be targeted to those who need it the most."

Southern Democrats threatened to abandon the farm bill, arguing that payment limits were unfair to growers of cotton and rice because of the relatively high cost of producing those crops compared with corn and soybeans, the Midwest's main commodities. Sen. Zell Miller, D-Ga., said the $275,000 limit was a "poison pill."

After they were soundly defeated, however, the southerners were more conciliatory. Republicans predicted the Democratic bill eventually would be approved by the Senate with little GOP support.

Senate Majority Leader Tom Daschle, D-S.D., wants to get the legislation out of the Senate next week, so that House and Senate negotiators can begin working on a compromise version.

Backers of the subsidy cap, led by Grassley and Sen. Byron Dorgan, D-N.D., said big government payments were driving up land prices and allowing large producers to push smaller operations out of business.

Under one program, a Florida real estate developer who controls 130,000 acres of farm and ranch land received at least $1.2 million in subsidies for the 2000 crop, according to Agriculture Department records. King Ranch Inc., a Houston-based company that owns 825,000 acres, got more than $638,000.

The large number of members of Congress who have distanced themselves with payment limits has been unusual, said farm program critic Ken Cook, president of the Environmental Working Group.

The Bush administration has taken no position on the measure, although officials have argued that existing programs unfairly benefit large farms and encourage the overproduction of crops that already are in surplus.

Democratic Sen. Dianne Feinstein was lobbied heavily by rice growers in her home state of California to oppose the limits but voted for them anyway.

"These payments really have to be for the needy. They can't be for the rich and famous," Feinstein said.