Bloomberg News

Farm Lobby Scores Again as Rural-Urban Allies Beat Tea Party

January 28, 2014

Farm Lobby Scores Again as Rural-Urban Allies Top Opponents

Workers package grapefruit at Packers of Indian River Ltd. packaging facility in Fort Pierce, Florida, on Jan. 9, 2014. Photographer: Mark Elias/Bloomberg

A coalition spanning grocer Kroger Co. (KR:US) to Iowa soybean growers is on the verge of victory with a deal on a five-year agriculture bill in a Congress that can’t seem to agree on much of anything.

The accord, which the Congressional Budget Office today said will cut $16.6 billion over 10 years, reflects the clout of rural and urban allies who hung together even when the House of Representatives split them apart, as well as lots of lobbying money. In all, groups pressing for the bill spent more than $100 million in the first nine months of last year.

The bipartisan agreement, unveiled last night by House and Senate leaders, cuts food stamps, the biggest U.S. Department of Agriculture program, less than Republicans demanded while modifying subsidy programs for crop growers and leaving mostly unscathed companies that provide insurance for farmers.

“The great thing the ag coalition did was include inner-city and suburban food-stamp recipients in addition to the more conservative farmers,” said Steve Bell, a former top Republican Senate budget aide and now senior director of economic policy at the Bipartisan Policy Center in Washington. “The combination of strong Republican advocates and Democratic food stamps advocates is unbeatable.”

Two Decades

Passage would wind down the agriculture community’s toughest fight in almost two decades as the influx of House lawmakers vowing to curb spending and end subsidy programs tried to rewrite the legislation. Lawmakers predicted the measure would easily pass the Senate after House approval, which could come as early as tomorrow and has the support of Speaker John Boehner, an Ohio Republican.

“Not only is this a good bill, it’s almost a miraculous farm bill,” House Agriculture Committee Chairman Frank Lucas, the Oklahoma Republican who led conferees in reconciling House and Senate versions of the measure, said today during a call with reporters. Lucas and his Senate counterpart, Michigan Democratic Senator Debbie Stabenow, predicted President Barack Obama will sign the bill after passage.

At least 325 companies and organizations, including Monsanto Co. (MON:US), PepsiCo Inc. (PEP:US), and Dean Foods Co. (DF:US), registered as lobbyists in 2013 to work on the Senate’s farm bill through the end of October -- the fifth-most of any legislation, according to the Center for Responsive Politics.

$111 Million

Only bills on the federal budget, appropriations, immigration and defense generated more lobbying interest, according to the center, a Washington-based research group that tracks campaign donations.

Agribusiness, an industry of crop and livestock producers, food manufacturers and dairy farmers among others, spent $111.5 million on lobbying in the same period, more than the defense industry and labor unions, according to the center.

Companies and individuals in agriculture made about $93 million in campaign donations during the 2012 presidential campaign and have given $20 million so far in 2014 congressional races.

The agreement on farm-policy legislation is among the few bipartisan achievements of this Congress, which this month cleared a $1.1 trillion spending bill and overcame disputes on presidential nominees to confirm more than a dozen.

“The conferees and their leadership have produced a framework that will serve the best interests of soybean farmers,” said Ray Gaesser, president of the St. Louis-based American Soybean Association and a farmer from Corning, Iowa.

Vote Scorecard

It’s a missed opportunity for sanity in agricultural policy, said Andy Roth, vice president of government affairs for Club for Growth in Washington, which supported treating food stamps and farm policy in separate bills to cut costs for both.

That group, along with small-government advocate Heritage Action, today urged lawmakers to oppose the bill. Both groups said they will include the vote on scorecards used to rate members of Congress in their re-election campaigns.

“This 949-page bill is yet another bloated proposal that House and Senate leaders are rushing through Congress without giving members and the public enough time to read and understand the bill,” said Roth in a statement. “This bill continues, for blatant political reasons, the unholy marriage of agricultural subsidies and food stamps -- two completely separate issues.”

The House Rules Committee forwarded the plan last night to the House floor, with a vote on procedure today to set up approval as soon as tomorrow.

‘Step Backwards’

“This logrolling prevents the long-term reforms that both farm programs and food stamps deserve,” said Representative Marlin Stutzman, an Indiana Republican. “As a farmer and a conservative, I cannot vote to take a step backwards.”

The legislation would cut nutrition programs including food stamps by $8 billion over 10 years -- one-fifth of the $40 billion sought by Republicans and fought by Democrats and food retailers. Crop-growers facing loss of $50 billion in subsidies retained about two-thirds through other aid, and crop insurers that paid out $17 billion after the severe 2012 were largely unscathed.

“We have done nothing that changes eligibility or eliminates anyone from food assistance help,” Stabenow said yesterday. “We have gone after waste, fraud and abuse.”

The bill governs farm subsidies, which encourages planting of soybeans, cotton and other crops that lower materials costs for commodity processors including Bunge Ltd. The legislation subsidizes crop-insurers such as Ace Ltd. (ACE:US) and funds purchases at Kroger and other grocers with food stamps, its biggest cost.

Shift Spending

Kroger, the biggest U.S. grocery-store chain, is “pleased that there appears to be growing, bipartisan support for the farm bill,” Keith Dailey, spokesman for the Cincinnati-based company, in an e-mail.

Reductions to the Supplemental Nutrition Assistance Program, or food stamps, will affect consumer decisions, he said. “Our expectation is that customers may shift to spending more of their cash on food and less cash on other things,” Dailey said.

Wells Fargo & Co. (WFC:US), which sells coverage to farmers through Rural Community Insurance, said farm-bill passage “should help take some uncertainty out of the marketplace,” Alan Elias, a spokesman for the San Francisco-based bank, said in an e-mail. The company is the second-biggest provider of farm policies after Ace, which had no comment.

Some lobbying groups expressed disappointment with compromises.

Crop Subsidies

A plan to raise a cap on crop-subsidy payments to as much as $250,000 per farm couple from $100,000, sought by southern cotton and rice growers whose farms are larger than their northern counterparts, showed “profound disrespect for the democratic process” by changing policies already agreed to in both chambers, according to the Washington-based National Sustainable Agriculture Coalition.

Groups representing meatpackers such as Tyson Foods Inc. (TSN:US) that sought to roll back meat-labeling standards challenged at the World Trade Organization said they’d oppose the bill, which left the rule intact.

“We will literally use all our resources to kill this bill,” Wyoming rancher Scott George, president of the National Cattlemen’s Beef Association, said in a conference call today.

The National Association of Manufacturers, whose members include Alcoa Inc. (AA:US) and Eli Lilly and Co. (LLY:US), also opposes the bill’s labeling provisions, citing their potential wide impact on trade. The organization will continue to work with the U.S. Trade Representative and lawmakers to find a way to solve the problems the labels pose should the farm law pass Congress, said spokeswoman Jamie Hennigan in an e-mail.

Democrats Unhappy

Many Democrats also were unhappy with cuts in food stamps, especially as some farmers may be in line for higher subsidies, a contrast that Representative Rosa DeLauro of Connecticut this month said was “unconscionable.”

While food-stamp advocates didn’t get everything they wanted, their role in the coalition prevented cuts from being any deeper, Bell said.

During the bill’s journey to final action, the House refused to consider a Senate-passed plan in 2012 and then rejected the Senate’s measure last year.

At one point, the House passed separate initiatives governing farm aid and food stamps. Those proposals were reconnected in negotiations with senators that produced yesterday’s deal.

The House rejection in 2013 stung Boehner, who backed the bill, then lost support from more than a quarter of his caucus. Further embarrassments continued through the government shutdown last year, finally causing the Ohio Republican to ignore some party colleagues to pass legislation.

To contact the reporters on this story: Alan Bjerga in Washington at abjerga@bloomberg.net; Julie Bykowicz in Washington at jbykowicz@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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Companies Mentioned

  • KR
    (Kroger Co/The)
    • $51.0 USD
    • 0.83
    • 1.63%
  • MON
    (Monsanto Co)
    • $116.19 USD
    • -0.08
    • -0.07%
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