The Food Journal and Food, Nutrition & Science

An alliance between The Lempert Report and The Center for Food Integrity

Farm Bill Update

Farm Bill Update

In the News

May 25, 2008

Farm Bill Update

Lawmakers have overridden President Bush’s veto on spending for the current Farm Bill. The bill does not reduce subsidies to farmers, even as they enjoy record crop prices. The five-year, $300 billion plan, which covers nutrition programs, farming, food and fiber production, and aspects of the lumber and horse farming industry, favors the continuation of “direct payments” to those who farm crops like corn, rice and wheat.

Many members of the House, Senate and Bush administration have criticized these measures, especially in light of the fact that consumers are currently facing spiking grocery bills. However, urban lawmakers have been more concerned with maintaining – and improving – the aid provided by the Farm Bill’s food and nutrition programs.

Approximately 60% of the bill goes to food stamps and food pantries, which amounts to about $36 billion for next year alone. The new agreement increases food and nutrition spending by $10 billion over the next five years, enabling more people in need to become eligible for the program.

In exchange for increases in food stamp spending, farm state lawmakers lobbied to create a new subsidy – a permanent disaster fund – to alleviate drought conditions in the northern plains, a region where critics argue farmers shouldn’t be farming in the first place. Meanwhile, the bill reduces ethanol tax credits to 45 cents per gallon from 51. The current tax credit will extend through 2010.

The bill also includes the labeling of imported meat and vegetables for the first time with country-of-origin (COOL). And $405 million dollars will be spent over the next 10 years on cleaning up farm-related pollution from the runoff of nutrients in the Chesapeake Bay. The funds will be spent helping farmers and ranchers who have suffered from weather-related losses as well. To support some of the new spending, lawmakers plan to draw funds from customs fees.

Bush vetoed the bill after he had called on Congress to instate stricter crop subsidy rules and a federal law to prevent windfall payments to farmers who manipulate price supports. He objected to the two-year proposed extension on ethanol tax credits too. The Senate completed the override of the bill with an overwhelming 82 to 13 vote.

The Bush administration recently asked Congress for $770 million in emergency foreign aid for the neediest in the developing world – a response to rising global food prices. Domestically, retail food prices are forecast to increase to 5% this year, after a 4% rise in 2007 – the largest increase since 1990.

Last year, flour prices rose 31.7%, eggs 29.4%, peppers 19.4%, milk 18.5%, beans 16.9% and pasta 13.7%, according to the Congress Joint Economic Committee. Ethanol production topped 6.5 billion gallons in 2007, up from 2.1 billion gallons in 2002. The Agriculture Department expects that the average farm household will earn more than $89,000 in 2008, up 6.3% from 2007. By comparison, the average U.S. household earns $67,000.