Lawmakers finish farm-subsidy bill

By Mary Clare Jalonick
Associated Press
Published: Friday, May 9, 2008 12:19 a.m. MDT
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WASHINGTON — Married farmers with joint incomes of up to $1.5 million a year could still qualify for crop subsidies under a five-year, $300 billion farm bill compromise that would boost the Agriculture Department's food and farm programs.

As details of the House-Senate compromise emerged Thursday, Agriculture Secretary Ed Schafer reiterated a Bush administration threat to veto the bill.

White House budget director Jim Nussle said the legislation still spends too much, relies on budget gimmicks and "doesn't have hardly enough reform."

"For those reasons, it would still be something that the administration would oppose," Nussle said.

House Speaker Nancy Pelosi, a supporter of the bill, said she wished it had gone further in limiting payments to wealthy farmers. Pelosi said she would have "preferred more commodity reform," referring to scaling back subsidies, but praised increases for nutrition programs, which make up two-thirds of the bill's cost.

The bill would eliminate some government payments to individuals who make more than $750,000 — or married farmers who make more than $1.5 million — in farm income annually. Individuals who make more than $500,000 in nonfarm income would also be ineligible for subsidies.

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Under current law, there is no income limit for farmers, and married couples who make less than one-fourth of their income from farming will not receive subsidies if their joint income exceeds $5 million.

The new legislation also would:

• Increase the nutrition programs, including food stamps and emergency domestic food assistance, by more than $10 billion;

• Expand subsidies for certain crops, extend dairy programs and increase loan rates for sugar producers;

• Make small cuts to direct payments, which are distributed to some producers no matter how much they grow;

• Cut a per-gallon ethanol tax credit that supports blending fuel with the corn-based additive from 51 cents to 45 cents in favor of more money for cellulosic ethanol, which is made from plant matter;

• Add dollars for conservation programs designed to protect farmland; and

• Eliminate loopholes that now allow farmers to collect subsidies for multiple farm businesses.

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