By Erik Wasson - 06/15/12 03:31 PM EDT
A new farm bill compromise floated by Sen. Kent Conrad (D-N.D.) on Thursday could be what is needed to get the bill through the Senate, but fiscal conservatives and environmentalists are crying foul.
The Conrad amendment would reinstate one of the farm subsidies eliminated by the underlying bill, the Agriculture Reform, Food and Jobs Act of 2012, and would reestablish and raise target prices for all major commodities, except cotton.
Oxfam International, which works to eradicate poverty world-wide, is also against the Conrad move. It argues the target prices subsidies distort world trade, causing U.S. commodities to be dumped on the world market and thereby hurting Third World farmers.
"Oxfam strongly opposes Senator Conrad’s amendment, which moves U.S. farm policy in the wrong direction, back to trade-distorting, special-interest giveaways that have created disastrous impacts for poor farmers in developing countries, and done nothing to help most farmers or consumers in the U.S. Congress should not guarantee high prices for selected commodities at the expense of poor farmers and American taxpayers," spokesman Ben Grossman-Cohen said.
The Conrad amendment, which the North Dakota Democrat has been working on with Sen. Saxby Chambliss (R-Ga.), would raise target prices on all commodities by 5 to 7 percent.
For rice, this means a price floor of $11 per hundredweight. For peanuts, it would mean a $25.25 per hundredweight price.
Chambliss had been seeking a $13.98 per hundredweight price for rice and $26.70 for peanuts.
Conrad, who chairs the Senate Budget Committee, says the amendment will not add to the deficit, but deficit watchdogs are not so sure.
They have already said the scoring on the new crop insurance is flawed because it doesn't take into account a scenario in which the bottom falls out of historically high crop prices for an extended period.
The Conrad proposal makes things worse, they said.
“We’ve seen this before,” said Joshua Sewell of Taxpayers for Common Sense. “The Ag Committee plants a new subsidy after weeding out an existing one and pats itself on the back. Then some commodity group huffs and puffs about how the new-fangled government intervention into the economy isn’t generous enough for them, so the committee brings back the subsidy they eliminated and keeps the new one. So taxpayers end up with an even more complicated and disjointed system.”
He added that “bringing the counter-cyclical program back from the dead would take this bill in the wrong direction.”
“It’s bad enough the committee chose to plow $35 billion into new 'shallow loss' entitlements instead of realizing the full savings of eliminating [the Average Crop Revenue Election Program] and direct and counter cyclical payments. This Farm Bill pandering to every parochial interest is the last thing we need while facing a $1.3 trillion deficit on a $15 trillion debt,” Sewell said.
The House-passed budget and President Obama's 2013 budget had called for much deeper deficit savings from farm programs than the Senate farm bill provides.
The Environmental Working Group is also not pleased.
"Whether subsidies are based on revenue or price, they are still subsidies that are no longer needed in light of record farm profits and an already bloated crop insurance program that already guarantees up to 85 percent up to a farmer's revenue,” said Scott Farber of the Environmental Working Group. “Rather than divide the spoils from the discredited direct payment program, the Senate should devise a farm bill that provides a true safety net without making cuts conservation and feeding assistance programs."