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FACTBOX-Some provisions of U.S. farm bill

Source: Reuters - Tue, 4 Feb 2014 20:13 GMT
Author: Reuters
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Feb 4 (Reuters) - A U.S. farm bill was passed by the U.S. Senate on Tuesday and sent to President Barack Obama for his expected signature. The legislation, which was approved by the House of Representatives last week, will cost an estimated $956 billion over 10 years, a savings of about $16.6 billion compared with current funding, according to the Congressional Budget Office.

The following are some provisions of the wide-ranging legislation, which comprises everything from food stamps and farm subsidies to meat labeling and crop insurance.

FOOD STAMPS

Funding for the Supplemental Nutrition Assistance Program, commonly known as food stamps, was cut by about $900 million a year, or roughly 1 percent. SNAP and other nutrition programs account for more than three-quarters of the farm bill's spending - some $756 billion over a decade. Liberal lawmakers argued against the reduction at a time of relatively high unemployment. Conservatives said the cuts did not go far enough in a program whose spending has more than doubled since 2008. The savings are expected to come from reducing benefits to people who are also enrolled in a federal heating assistance program. An estimated 850,000 households in 16 states and District of Columbia will lose about $90 a month in SNAP benefits.

DIRECT PAYMENTS

The legislation ends a nearly two-decade-old program of direct payments to farmers, which cost about $5 billion a year and went to farmers and landowners no matter how much money they made or even whether they actually farmed their land. At a time of rising farm income, the plan had become politically untenable. With the end of direct payments, lawmakers have instead expanded and revised crop insurance programs, and the expansion could put the government on the hook for bigger payouts in times of poor harvests.

COUNTRY OF ORIGIN LABELING

This provision, which has been around since the 2002 farm bill, requires meat sold in the United States to be labeled as to where animals are born, grown and processed. It remained in the 2014 bill despite heavy lobbying from the meat industry, which said it was a bookkeeping nightmare for meatpackers. Mexico and Canada, two of the largest exporters of beef to the United States, have challenged COOL at the World Trade Organization. U.S. ranchers and consumer groups largely support COOL, arguing that consumers deserve to know where their meat comes from.

DAIRY

There was a battle between Democratic Representative Collin Peterson of Minnesota, backed by dairy farmers, and Republican House Speaker John Boehner over Peterson's proposal to couple a new margin insurance program with a system to cut milk production if prices fell below a certain level. Boehner, who had the support of cheesemakers and food processors who want lower milk prices, said he would not allow a vote in the House if it included Peterson's supply management plan. The final bill excluded supply management but made changes to the insurance plan, and Peterson said he could live with the compromise.

KING AMENDMENT

This amendment, intended to block a California law requiring that all eggs sold in the state come from chickens kept in nonconfining cages, was included in the House-passed bill but was dropped from the final legislation. Critics said the provision, pushed by Republican Representative Steve King of Iowa, could have invalidated hundreds of state laws on animal protection and food safety. King, supported by egg growers in Iowa and other states, said the California law violated the interstate commerce clause of the U.S. Constitution.

PAYMENT IN LIEU OF TAXES

Rural counties in the West breathed a sigh of relief after the farm bill included a payment in lieu of taxes program (PILT), which pays local governments for the tax revenue they cannot collect on federal lands. The $400 million-a-year program was a late addition to the farm bill after it was not included in the January budget deal. A bipartisan group of 16 senators had urged that PILT be included in the farm legislation.

CATFISH

U.S. catfish farmers and Southern lawmakers successfully fought to a keep a provision, first authorized in the 2008 farm bill, that shifted catfish inspection to the Agriculture Department from the Food and Drug Administration. Critics including Senator John McCain, Arizona Republican, called the provision a trade barrier designed to protect catfish farmers from imports, mostly from Vietnam. But supporters say USDA inspections would be more rigorous in the interests of food safety. They had a powerful ally in Senator Thad Cochran of Mississippi, the top Republican on the Agriculture Committee, who managed to keep the provision despite the Government Accountability Office saying it was "wasteful and unnecessary."

HEMP RESEARCH

With marijuana laws loosening, supporters of industrial hemp saw an opening and pushed through a provision that allows colleges and state agencies to grow and conduct research on the crop in the nine states where it is legal. Kentucky is among them and Mitch McConnell, the top Republican in the Senate, was a big backer of the provision. Industrial hemp, which can be used to make clothing, food, building materials and a number of other products, has low levels of the chemical that gets people high. Growing or using it is illegal under federal law.

BIOFUEL BLENDER PUMPS

A provision removes subsidies for fuel pumps in rural areas that blend gasoline with higher concentrations of biofuels, like corn-based ethanol. Ending the subsidies was a blow to the Obama administration, which in 2010 set a goal of helping gas station owners install blender pumps over the next five years to promote consumption of higher-ethanol gasoline.

CHRISTMAS TREE 'TAX'

Fiscal conservatives are particularly incensed by a provision in the bill that imposes a 15-cent fee on every fresh-cut Christmas tree sold in the United States, with the money being used to promote demand for trees. Critics call it a tax and say it will be passed on to consumers in the form of higher prices. Christmas tree growers say the fee, which is expected to raise about $2 million a year, is similar to other commodity "check off" programs, like the successful "Got Milk?" campaign, which use funding to promote an industry. (Reporting by Eric Beech; editing by Ros Krasny and Matthew Lewis)

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