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HEADLINE: Senate Committee Approves Continued Farm Subsidies; GOP Effort to Cut Payments Defeated

BYLINE: John Lancaster, Washington Post Staff Writer

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A Senate committee yesterday approved a new farm policy blueprint that would continue to shower subsidies on large-scale producers of traditional row crops such as corn and wheat. The vote came after farm-state Democrats defeated an effort by Republicans to scale back crop payments that they say encourage overproduction and waste.

The Senate Agriculture Committee voted 12 to 9 in favor of the farm bill, which could arrive on the Senate floor by the end of the month.

Passage of the measure is by no means assured. Conservationists say the bill favors large-scale farmers at the expense of small producers and the environment, and they have found willing allies among fiscal conservatives who say it would distort markets and undercut the Bush administration's free-trade agenda. The House passed its own version of the legislation Oct. 5. The bill sponsored by Sen. Tom Harkin (D-Iowa), who chairs the committee, would increase conservation programs by $ 1.8 billion annually over the next decade, compared with $ 1.2 billion in the House alternative. Like the House bill, however, it essentially would leave intact -- and in some cases enhance -- the traditional farm-subsidy programs that have shaped American agriculture since the 1930s.

Harkin acknowledged as much yesterday, describing the bill as a "nudge" toward a more flexible, market-oriented approach but one that also provides a strong safety net for farmers beset by low prices and high production costs. "We're not going to make any sharp turns," he said.

In that regard, both the Senate measure and the House bill -- each of which carries a 10-year price tag of about $ 170 billion -- amount to an admission of failure. The last time lawmakers passed a farm bill, in 1996, they sought to phase out subsidies, providing farmers with cash payments to help ease the transition. But the transition never happened: Farm prices collapsed, and Congress has stepped in each year with multibillion-dollar "emergency" bailouts that have driven the cost of farm programs to new peaks.

Harkin's bill includes direct payments to farmers based on production, as well as subsidized loans and a new "counter-cyclical" subsidy that makes up the difference between crop prices and a target set by the government. Harkin had originally favored spending more for conservation and research but scaled back his proposals after southern Democrats insisted on a larger share for farmers.

Sen. Richard G. Lugar (Ind.), the ranking Republican on the panel, said the bill would perpetuate subsidies that encourage overproduction, depress prices and flow disproportionately to the wealthiest farmers in a few midwestern and southern states. Lugar cited a recent Agriculture Department study showing that 47 percent of crop payments in 1999 went to large commercial farms with an average household income of $ 135,000.

"This is wild -- it is totally out of bounds," Lugar said.

Lugar has proposed throwing out the payment programs in favor of a system that would provide farmers with vouchers for buying crop insurance, which would provide a safety net in lean years. He said he would offer the amendment on the Senate floor rather than in committee, where it lacked the votes to pass.

Administration officials have criticized the House bill as too expensive and potentially at odds with trade agreements, and they have expressed sympathy with Lugar's goals. For now, however, they have thrown their support behind Sens. Pat Roberts (R-Kan.) and Thad Cochran (R-Miss.), who yesterday offered an alternative set of commodity programs that they say are more consistent with free trade. Their amendment failed on party lines.

In defending Harkin's bill, Sen. Kent Conrad (D-N.D.) produced a chart showing that the European Union subsidizes farmers an average of $ 313 per acre per year, compared with $ 38 in this country. "If we don't help our producers in what is fundamentally a trade war, our people are going to go right down the drain," Conrad said.



LOAD-DATE: November 16, 2001