Farm Bill

In the decade 1995-2005, farmers in Rep. Wally Herger’s 2nd District received a whopping $1.8 billion in crop subsidies, with some farms pulling in as much as $1 million a year. Herger’s been a consistent backer of this governmental largesse, which has made him a popular figure in the farming community, particularly among rice growers.

Historically, the bulk of commodity payments has gone to producers of just five crops—corn, wheat, soybeans, cotton and rice—a policy that goes back to the Depression years. Last year, the five crops received 92 percent of the $21 billion in federal farm payments.

This year, for the first time in five years, the Farm Bill is up for renewal, again with billions of dollars in taxpayer money at stake. Pressure for reform has increased dramatically since 2002. Environmentalists are pushing for more spending on land, soil and wetlands conservation, and others are seeking more support for fruits, nuts and vegetables—the specialty crops that California produces in abundance.

They’re also calling for lowering the income cap for receiving subsidies from $2.5 million to $250,000. Giving the most money to the wealthiest farmers, they argue, encourages them to expand, undermining the family farm.

Interestingly, the Bush administration has called for an even lower ceiling: $200,000. (For married owners, the figures are doubled.)

The reform effort ran into a surprising roadblock in the House when Speaker Nancy Pelosi decided to support the bill that came out of the House Agriculture Committee, which is dominated by farm-state legislators. Worried that she could lose some farm-state seats in the 2008 election, and with them her Democratic majority in the House and her post, she backed a more traditional bill.

As a result, the House last week (July 27) approved a version of the bill that—despite some reformist tinkering around the edges, including $1.6 billion for specialty crops—would largely continue the ample payments to commodity growers, including rice farmers.

Herger, however, joined a number of other Republicans in voting against it.

It wasn’t that he didn’t like the agricultural elements of the bill, he said. It was because at the last minute Democrats, wanting to increase funding for certain nutrition programs and Food Stamps, added an amendment that would levy some $4 billion in increased taxes on foreign companies operating in this country.

“Good farm policy shouldn’t be held hostage to irresponsible tax policy,” Herger said in a press release.

In a phone conversation from his Capitol Hill office, Herger said the tax increase “sends the wrong message. We always hear about [the problem of] outsourcing jobs, so we should be doing everything we can to insource jobs from other countries.” Some 450,000 Californians work for foreign-based companies, he said.

He hoped at the time that the bill would lose and go back to committee, where the tax increase could be discussed.

He noted that the House bill reduced the income eligibility level to $1 million ($2 million for married couples). He also agreed that had it been reduced further—as the Bush administration and reform backers wanted—the Democrats wouldn’t have needed to tack on a tax increase.

The new cap would make only the 3,100 richest farmers ineligible, out of the 1.6 million receiving subsidies.

Herger said he would support further reduction of payments to the five commodity crops if farmers elsewhere, particularly in Europe, gave up their protective tariffs and allowed more American agricultural sales there. He defended the subsidy program, saying it made farming safe and noting that his grandparents had twice lost their North Dakota wheat farm because of a lack of protection.

As for the future of the bill, Herger made no predictions. The Senate will come up with its own version in September, after which the two versions will be reconciled and a final bill sent to President Bush. Herger said he was confident the president would veto any bill that included a tax increase.

Locally, David Lundberg, president of the Butte County Farm Bureau, said he was “pleased with what they came up with” in the House. “We can live with a million-dollar cap,” he added.

Like Herger, he said a farm bill wouldn’t be needed if there weren’t artificially imposed limits on trade.

Lundberg is a member of the Richvale rice farming family. In the 1995-2005 period, his business received $3,463,622 in subsidies.