New farm bill shifts subsidies, cuts food stamps, retains meat labeling rules

The passage of a nearly $1 trillion farm bill Tuesday was met with praise by some Maryland farmers, but some were left disappointed.

House Bill 2642 passed the House 251-166 last week, and the Senate 68-32 Tuesday. The passage of the bill prevented the government from reverting back to 1949 farm policies, which many warned would have resulted in milk prices soaring to as much as $8 per gallon.

Many Maryland dairy and grain producers welcomed the bill.

The most relevant change for crop farmers is the bill's elimination of the $4.5 billion per year direct payment program, which paid farmers for the land they owned regardless of whether or not they grew crops.

In 2012, Carroll farmers received $981,851 from the program, according to the latest figures from the Environmental Working Group's subsidy database.

The bill uses savings from that program to expand funding for crop insurance, which protects farmers when they have reduced revenue or when crop yields are low.

Lynne Hoot, executive director of the Maryland Grain Producers Association, said most Maryland grain farmers understand that direct payments were doomed because the public did not understand them. Such payments were put in place to comply with World Trade Organization standards that call for subsidies that are not directly tied to crop production.

She said most Maryland grain farmers are pleased that crop insurance programs are expanded under the bill.

"Crop insurance is important to Maryland farmers," Hoot said. "We suffer drought when the rest of the country does not."

Under the bill, dairy farmers were able to reach a compromise concerning protections for when feed costs start to rise and milk prices drop, which will benefit farms differently depending on their size.

"I think far and away the overwhelming sentiment is that the farm bill has been dealt with, there has finally been a compromise and we are finally able to move forward," said Amber Sheridan, director of corporate communications for the Maryland & Virginia Milk Producers Cooperative Association.

But not all farmers are happy.

Many Maryland cattle and poultry farmers are angry the farm bill did not eliminate rules that require meatpackers and retailers to include country-of-origin labels on meat. The labels must note on certain cuts of meat where the animals were born, raised and slaughtered.

Scott Barao, executive vice president of the Maryland Cattlemen's Association and a cattle farmer in Woodbine, said he fears that Canada and Mexico - the two countries that trade the most meat with the U.S. - may enact tariffs in retaliation to the rules. The two countries are opposed to country-of-origin labels because they believe the labeling will undermine their producers' competitiveness.

"It is going to close markets to U.S. beef," Barao said.

Canadian officials are set to discuss the situation at a hearing before the World Trade Organization Feb. 18.

The passage of the bill ends a three-year debate between House Republicans and Senate Democrats that centered largely on how much would be cut form the Supplemental Nutrition Assistance Program, otherwise known as the food stamp program.

Over a 10-year period, the bill will save $16.6 billion, according to the Congressional Budget Office. Total spending under the bill is about $956 billion, with $756 billion going to nutrition programs.

House Republicans originally wanted much deeper cuts to SNAP than were passed in the bill. A version of the bill passed by the House last year cut about $40 billion from food stamps, while the Senate passed a version of the bill that cut just a fraction of the program.

Under the bill, SNAP will be cut by more than $8 billion, which is expected to reduce benefits for about 850,000 low-income households nationwide, according to reports.