The FarmPolicy blog reviews major media reports on several of the key issues to be decided.
One issue is whether farm subsidies will continue to go disproportionately to the largest and richest farmers. Sen. Harkin is expected to propose an income eligibility limit of $750,000 per year, which would not affect many farmers. For comparison, the House earlier passed a limit of $1 million per year (and double that for married couples), which would affect even fewer farmers. A stronger reform proposal to watch comes from Senators Byron Dorgan (D-ND) and Charles Grassley (R-IA), who propose an income cap of $125,000 (and double for married couples). Under this proposal, the federal government would help subsidize low-income, middle-income, and upper-middle-income farmers. High-income farmers would still get our admiration, good wishes, and food dollars, but not our tax money.
An even more dramatic reform proposal is summarized in the Washington Post this morning.
An alternative exists, in the form of a bill being prepared by Sens. Richard G. Lugar (R-Ind.) and Frank R. Lautenberg (D-N.J.). Their proposal would replace the existing array of subsidies for favored commodities with government-funded crop insurance that would cover all farms and ranches, whether they grow strawberries or soybeans. Farmers would get paid if, but only if, their incomes in a given year dropped at least 15 percent below the previous five years' average in their respective counties. This is still an incredibly sweet deal; what other American industry can count on federally funded protection from the vicissitudes of capitalism? But it would save $20 billion over five years, money that Mr. Lugar and Mr. Lautenberg propose to spend on deficit reduction, nutrition and a soil conservation program that pays farmers to restore wetlands and wildlife habitats.The Post editorial's subheading today was: "Congress gets ready to flub farm subsidy reform again." I'm neither naive nor hopeless. The status quo proposal in the House seemed politically fragile, barely squeaking through the floor vote with great gobs of bacon grease. It is not obvious to me what will happen in the Senate.