On Jan. 27, House and Senate leaders announced what just a few months ago seemed impossible—a deal on a five-year, almost half-trillion-dollar farm bill. The legislation had languished for more than a year as Democrats and Republicans haggled over food stamps and crop subsidies. Two things broke the impasse: an unusual urban-rural alliance that hung together to preserve threatened programs; and lots (and lots) of money from lobbyists.
The legislation cuts food stamp spending by $8.6 billion over 10 years—a fifth of the $40 billion that Republicans wanted and that Democrats and food retailers fought to protect. Crop growers will lose $50 billion in subsidies over the next decade, including an end to the controversial direct payments program, which gave checks to some farmers regardless of financial need. Growers will get back about two-thirds of that lost spending in the form of enhanced crop insurance and other benefits.
“The great thing the ag coalition did was include inner-city and suburban food stamp recipients in addition to the more conservative farmers,” says Steve Bell, a former top Republican Senate budget aide and now senior director of economic policy at the Bipartisan Policy Center in Washington. “The combination of strong Republican advocates and Democratic food stamp advocates is unbeatable.” If the bill is signed into law (which seems likely by early February), it will conclude one of the toughest spending fights in almost two decades.
In all, groups pressing for the bill spent $150 million on lobbying in 2013, according to the Center for Responsive Politics, which tracks political spending. At least 350 companies and organizations, including Monsanto (MON), PepsiCo (PEP), and Dean Foods (DF), hired lobbyists in 2013 to work on the Senate’s farm bill. Only debates over the federal budget, immigration, and defense spending attracted more lobbying muscle, according to the center.
It was quickly apparent who got at least some of what they wanted and who didn’t. The American Soybean Association praised the bill as being in the “best interests” of growers, who will benefit from federal crop insurance. Kroger (KR), the largest U.S. grocery store chain, is “pleased that there appears to be growing, bipartisan support,” says spokesman Keith Dailey. That makes sense, because most food stamps, which were cut by less than originally proposed, are spent in big-box supercenters such as Wal-Mart Stores (WMT) and in major supermarkets including Safeway (SWY) and Kroger. Wells Fargo (WFC), which sells coverage to farmers through the government’s Rural Community Insurance program, predicts the bill will “help take some uncertainty out of the marketplace,” says spokesman Alan Elias.
Many advocates for the poor, as well as Democrats in Congress, were furious about the partial food stamp rollbacks. About 850,000 U.S. households will see their food support cut by about $90 a month. Southern cotton growers were upset over losing billions in direct crop payments, although they’ll stand to gain from a new subsidy program that will pay them if prices drop. And groups representing large meatpackers such as Tyson Foods (TSN) were disappointed that the bill left intact rules requiring all meat sold in the U.S. to carry a country-of-origin label saying where the animal was born, raised, and slaughtered. The rules prevent companies from labeling meat as being entirely of U.S. origin if, for example, the pig or calf was born in Canada and slaughtered in the U.S. The industry says the rule threatens to incite a trade war with other nations. “We will literally use all our resources to kill this bill,” Wyoming rancher Scott George, president of the National Cattlemen’s Beef Association, said in a Jan. 28 conference call.
Of course, there’s no way everyone will be happy with everything in a megabill like this one, especially when Washington isn’t in any mood to spend. In the past, lobbyists armed with millions of dollars might have expected to walk away from the fight with fistfuls of special tax breaks and other incentives. This time the goal was merely to keep their pet programs from getting cut to the quick.
