TOPICS > Politics

Congress Passes New Farm Bill

July 27, 2007 at 6:30 PM EST
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JUDY WOODRUFF: The legislation passed by the House today is the first step toward approving a massive bill that shapes farm, food, environment, and even trade policy over the next five years. All told, it cost $286 billion.

Most of that money, $190 billion, is spent on food stamps and other nutrition programs. But one of the most controversial parts of the bill is the $42 billion it gives to farmers through crop subsidies, insurance, and other payments. There would be some changes in those payments: Subsidies would be banned for farmers if their income exceeds $1 million a year. Currently, farmers earning up to $2.5 million annually are eligible.

But many critics, including President Bush, say that change doesn’t go far enough. Instead, the president proposes banning subsidies for farmers whose income exceeds $200,000 a year. He has threatened to veto the bill if the Senate does not make those changes this fall.

We get our own debate on whether subsidies are too generous. And for that, we turn to two House members who have been central in this fight: Paul Ryan of Wisconsin, the ranking Republican member on the Budget Committee; and Democrat Earl Pomeroy of North Dakota, a member of the Agriculture Committee.

Gentlemen, thank you for being with us.

And, Representative Ryan, to you first, you believe these subsidies should be done away with or sharply curtailed. Why?

REP. PAUL RYAN (R), Wisconsin: I think they should be sharply curtailed because, first of all, I don’t think people making a million dollars should be getting almost unlimited payments. I supported the amendment to cap payments at $250,000.

The reason I do this is because I think the farm program ought to be a safety net for family farmers, not payouts to large corporate farms, number one. And, number two, the largesse of these subsidies will actually hurt us internationally in getting better trade agreements to open up our markets for our farmers.

The big problem with this bill as it passed is it doesn’t help farmers when they’re having a hard time. It sends them a check almost every year. They ought to get a check when they’re having bad years, not almost every year.

JUDY WOODRUFF: And, Representative Pomeroy, you think these subsidies should be continued. Why?

REP. EARL POMEROY (D), North Dakota: You know, agriculture involves exposing an awful lot of capital. You know, a family farmer puts everything on the table when they put a crop in, in the spring. And there are risks they can’t control, prices collapsing, a crop getting wiped out.

The federal government’s role is helping family farmers manage these risks. And that keeps family farming agriculture a central component of U.S. food production. You know, we’ve got a choice: We can go to massive, vast, corporate-style agriculture or keep family farmers front and center. And that’s what this farm bill does.

Benefiting family farmers

JUDY WOODRUFF: Representative Ryan, you hear Congressman Pomeroy saying that this helps family farmers.

REP. PAUL RYAN: I think this actually helps corporate farmers buy more family farms. And the problem with this is you're not only giving, you know, money to people who are making over a million dollars. These subsidies in many cases can have no limit at all.

We tried to pass an amendment that said, look, no more than at least a $250,000 of payments can go to you as a farmer. That's surely more than your average family farmer. The idea ought to be a safety net for family farmers, not large corporate farms, during tough times. This gives a check in subsidies that can go over a million dollars to people during good times and bad times.

To me, it's really corporate welfare for larger farm operations. It ought to be a safety net for those small, truly family farms. If we did that, we'd have better trade agreements, as well.

JUDY WOODRUFF: Congressman Pomeroy, how do you explain the farmers earning up to a million dollars a year need this kind of check from the government?

REP. EARL POMEROY: Well, actually, this bill does advance some meaningful payment limit reform. And let's remember, this is the first cut. We've got the Senate; we've got conference committee. It's possible there will be other action in this area, as well.

But right now, the maximum payments brought down by a 60 percent margin in this farm bill. This is the -- I've been on the Ag Committee for most of the 15 years I've been in Congress, and this is by far the most significant, meaningful payment limit reduction reform that I've seen during my years on the committee.

I frankly commend Paul Ryan here. I think the things he's pushing for are encouraging a healthy debate and bringing reform into the system. But what he would do is death by reform. He would essentially end the safety net for family farmers, if the provisions he's advocating would go into effect. We couldn't go as far as he wanted. We did incorporate some of the ideas, moved the reform bill forward.

REP. PAUL RYAN: I'm simply saying, let's cut off the checks at $250,000 and no more. I don't think that ends the family farm.

JUDY WOODRUFF: Well, there's a disconnect here, because you're saying $250,000 is the ceiling. And Congressman Pomeroy is saying it needs -- at this point, it needs to go up to a million, but it could...

REP. PAUL RYAN: Actually, that limit has a lot of Swiss cheese in it. They actually removed all limits on marketing loan programs. They increased subsidies for sugar. They increased loan payments for corn, soy beans, wheat and barley, so they actually increased payments in a lot of these areas.

REP. EARL POMEROY: You know, without boring you into the real weeds here, right now there has been a $2.5 million limit. We brought it down to where at $500,000. And, you know, agriculture, you need a lot of capital to stay in this business, $500,000, if you're not bringing 75 percent of your income in off that farm, you're limited right there.

And most of the farming operations that are falling into this area that are of question are not getting most of that money for family farming. So we think the limit is not a million; we think it's a half a million. And we think that this is meaningful reform. Again...

JUDY WOODRUFF: Congressman Pomeroy...

REP. PAUL RYAN: I would just respectfully disagree. But one of the problems with this bill, in my opinion, is that it's sending out checks to farmers when they have good prices, when they're doing well. We shouldn't be doing that.

We should help them when they're having a problem with the revenue, when they're having a bad crop or they're having bad prices. We shouldn't be sending checks out to farmers at all-time high prices. Yet those are the perverse structures within this bill, and that's what my farmers are telling me, the corn and bean growers in Wisconsin.

Helping the U.S. economy

JUDY WOODRUFF: Congressman Pomeroy, how do you explain that? Prices are good right now for farmers.

REP. EARL POMEROY: I believe that the portion of this program that puts so much into the direct payment is wrong. And I agree with Paul Ryan about that. But what he did with his proposal was take that money and remove it from support of agriculture. What I would do -- what I would do is take...

JUDY WOODRUFF: But specifically my question is, why, at a time when prices are high, do farmers need these direct payments?

REP. EARL POMEROY: Well, costs are high, Judy. Look, they've got three-dollar gas. We've got the highest gasoline, just for an example, to put the crop in they've ever had, and that compounds in terms of fertilizer costs. Land prices are soaring. It's not like it's a rosy picture on the expense side of the ledger, either. And so that's how this all figures in.

We can make changes along the line Paul Ryan is advocating, and this bill takes a big step in that direction. There's more work to be done on this thing. We're going to have at the end a reform farm bill, yet one that preserves a safety net for family farmers. That's good for U.S. agriculture, good for the food the consumers are buying in the grocery store, and good for family farming.

JUDY WOODRUFF: And, Congressman Ryan, you're saying that safety net, you see it differently?

REP. PAUL RYAN: I do see it differently. And Earl and I are good friends. We served on Ways and Means together, as well. I just see it differently than that. I think it ought to be a safety net for the true family farmer, not something that's sending out even more than million-dollar payments to certain farmers.

And I think we ought to help them in bad times. At a price when commodity prices are at an all-time high, we shouldn't be sending these checks out. And by doing it this way, it actually hurts our ability to go out overseas and get better trade agreements to open up those export markets for our farmers. So that's the concern I have with this approach.

JUDY WOODRUFF: Congressman Pomeroy, what about that point?

REP. EARL POMEROY: Well, interestingly enough, the administration proposed a proposal that would have had all of the money in direct payments. That's the administration's idea. They didn't want a countercyclical price protection; they didn't want a safety net.

REP. EARL POMEROY: And so I think they need to get -- I think they need to get their lines straight here. We want a safety net for farmers that works; we want reform in the payment program. And we've taken a big step in that direction with this bill we moved off the House floor.

Alternatives to subsidies

JUDY WOODRUFF: And, Congressman Ryan, the other point that one hears about this, about these subsidies, is that other businesses are supported in different ways. They're given tax breaks; they're given other types of tariffs that help them. So this is another way of supporting an important industry.

REP. PAUL RYAN: Well, I think there's a lot of protectionism in this bill. Sugar is a good example of many different layers of protectionism. And that protectionism goes beyond helping the family farmer: It raises taxes on American taxpayers; it raises prices for American consumers; and it hurts us from being able to open up export markets for our farmers.

And it actually hurts people in the developing world from lifting their lives out of poverty onto a life of self-sufficiency by propping up these protectionist barriers that we are doing in this agriculture policy. So I just think that the priorities are wrong. This bill will get vetoed by the president, according to his policy two days ago, if it stays as is.

So I think we're going to see changes made, probably through the Senate, if this is going to get signed into law by the president. If this bill were to land on his desk as is, it would get vetoed.

JUDY WOODRUFF: Quickly.

REP. EARL POMEROY: You know, our farmers are producing crops, competing in the global marketplace against subsidized markets of Europe or closed markets in Asia where we can't even get in to sell.

To suggest that we need to throw our doors open and forget about helping our farmers, or leaving our farmer exposed, unique to the world, is an unacceptable course for U.S. agriculture. We need to protect the family farmer, and that means helping with risks.

A family farmer exposes everything when they put their crop in. They've got risks they can't control. That's the role of the farm bill; that's what we've built.

JUDY WOODRUFF: Gentlemen, we thank you both. We're going to have to leave it there. And we will follow this farm legislation as it moves onto the Senate.

Congressman Pomeroy, Congressman Ryan, thank you both.

REP. PAUL RYAN: Thank you.

REP. EARL POMEROY: Thank you.