Farm Bill Passes Senate, On To President Obama For Signature

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Farm Bill Passes Senate, sent to President Obama for signature.

The US Congress has given its final approval to a sweeping 5-year farm bill that provides food for the needy, subsidies for farmers and legalizes the cultivation of hemp.

Tuesday, ending years of political battles, the Senate sent the measure to President Barack Obama, who is expected to sign it quickly. The Senate passed the bill 68-32.

The bill provides a financial cushion for farmers who face unpredictable weather and market conditions. But the bulk of it’s nearly $100 million a year cost is for the food stamp program, which aids about 15% of Americans.

Universities and researchers can expect to cultivate more  hemp, thanks to a section in the farm  bill passed the Senate Tuesday and is on the way to the Oval Office for the president’s signature.

Humans have used the tall, cane-like fibrous plant for centuries as a food, fuel and fiber, yet the federal government banned hemp as part of their war on Marijuana beginning in 1937.

Hemp supporters never forgot the plant, which could not be legally grown in the US, but imported from places like China and Canada.

Retail sales of hemp and hemp products in the US total about $500 million a year. It is estimated by economists that hemp products in the US will soon be a trillion dollar industry.

The end of marijuana’s prohibition in certain parts of the nation heralds the return of hemp, which is now legal at the state level in 9 states. Under a provision in the new farm bill, universities and researchers in those 9 states can now more easily obtain permits to grow hemp for research purposes.

“We are laying the groundwork for a new commodity market for Kentucky farmers,” Senate Minority Leader Mitch McConnell (R., KY), said in a statement recently reported in the WSJ.

The final bill gets rid of controversial subsidies known as direct payments, which are paid to farmers whether they farm or not.<

But most of that program’s $4.5 billion annual cost was redirected into new, more politically defensible subsidies that would trigger when a farmer has losses. The food stamp program was cut about 1%; the House had pushed for 5 times that much.

Senate Agriculture Chairwoman Debbie Stabenow, D-Mich., said before the bill passed that she and her House counterpart, Rep. Frank Lucas, R-Okla., tried to craft a bill that would work for all regions of the country, “from traditional row crops, to specialty crops like fruits and vegetables, to livestock, to organics, to local food systems.”

The final savings in the food stamp program, $800 million year, will come from cracking down on states that seek to boost individual food stamp benefits by giving people small amounts of federal heating assistance that they do not need.

That heating assistance, sometimes as low as $1 per person, triggers higher benefits, and some critics see that practice as circumventing the law. The final bill would require states to give individual recipients at least $20 in heating assistance before a higher food stamp benefit could kick in.

Some Democrats objected to the cuts, even though those cuts are much lower than what the Republican led House sought. The Senate-passed farm bill had a $400 million annual cut to food stamps.

During the debate some Republicans took to the Senate floor to say the bill does not do enough to trim spending.

The bill has a stricter cap on the overall amount of money an individual farmer can receive; $125,000 in a year, when some programs were previously unrestricted. But the legislation otherwise continues a generous level of subsidies for farmers.

In place of the direct payments however, farmers will now be able to choose between subsidies that pay out when revenue drops or when prices drop.

Cotton and dairy supports were overhauled to similarly pay out when farmers have losses. Those programs may trigger sooner than expected as some crop prices have started to drop in recent months.

The bill would save around $1.65 billion annually overall.

Critics say  that under the new insurance-style programs, those savings could disappear if the weather or the market does not cooperate.

Craig Cox of the Environmental Working Group, an organization that has fought for subsidy reform for several years, said replacing the direct payments with the new programs is simply a “bait and switch.”

“The potential for really big payoffs” is huge, he said.

Track Overview, Summaries, Related, and Citations of H.R. 2642: Federal Agriculture Reform and Risk Management Act of 2013 by clicking on H.R. 2642 link below:

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