Senate votes new limit on farm subsidies; Southern lawmakers protest

WASHINGTON (AP) _ Big grain and cotton farms may see their government payments shrink. <br><br>Despite opposition from major farm groups, the Senate voted overwhelmingly Thursday to impose an annual limit

Friday, February 8th 2002, 12:00 am

By: News On 6

WASHINGTON (AP) _ Big grain and cotton farms may see their government payments shrink.

Despite opposition from major farm groups, the Senate voted overwhelmingly Thursday to impose an annual limit on agricultural subsidies of $275,000 per farm.

Under existing rules, growers generally are held to $460,000 in annual payments, but subsidies essentially are unlimited under a program that guarantees minimum revenue for grain, cotton, soybeans and other commodities.

The Senate's 66-31 vote to cap payments at $275,000 followed public disclosure over the past year about how such operators have reaped unusually large subsidies under programs intended to keep family farms from going under.

For example, a Florida real estate developer who controls 130,000 acres of farm and ranch land received at least $1.2 million in subsidies for his 2000 crop, according to government records.

The vote was a bitter defeat for senators from the South, where cotton and rice interests are particularly dependent on federal subsidies.

``That's a big vote. It's the new reality in farm programs,'' said Sen. Pat Roberts, R-Kan.

The $275,000 limit was added to a Democratic-authored overhaul of farm programs that would extend subsidies for another five years. A House-passed farm bill would allow farmers to receive even more money than they can under existing law.

The Senate approved another amendment that would restore food stamps to many legal immigrants by cutting off subsidies to growers who periodically leave their farms fallow. The cutoff would free up about $140 million a year for food stamps.

Southern Democrats threatened to abandon the farm bill, arguing that payment limits were unfair to growers of cotton and rice because of the relatively high cost of producing those crops compared with corn and soybeans, the Midwest's main commodities. Sen. Zell Miller, D-Ga., said the $275,000 limit was a ``poison pill.''

After they were soundly defeated, however, the southerners were more conciliatory.

Senate Majority Leader Tom Daschle, D-S.D., wants to get the legislation out of the Senate next week, so that House and Senate negotiators can begin working on a compromise version.

Backers of the subsidy cap, led by Sens. Charles Grassley, R-Iowa, and Byron Dorgan, D-N.D., said big government payments were driving up land prices and allowing large producers to push smaller operations out of business.

``The single most effective thing Congress could do to strengthen the fabric of rural communities and family farms across the nation is to stop subsidizing megafarms that drive their neighbors out of business by bidding land away from them,'' said Sen. Tim Johnson, D-S.D.

Critics of the measure predicted farmers would find ways to circumvent the limits by restructuring their operations. ``I'm sure there are people sitting down tonight to figure out just that,'' said Ohio farmer Tony Anderson.

The Bush administration has taken no position on the measure, although officials have argued that existing programs unfairly benefit large farms and encourage the overproduction of crops that already are in surplus.

The American Farm Bureau Federation and organizations representing wheat, corn, cotton, rice and soybean growers wrote to wavering senators Wednesday to urge ``no'' votes on limits. The groups argued that payment limits penalize farms that expand to cut costs.

Crops vary widely in their cost of production, depending on the need for fertilizer, special equipment, irrigation and the like. Rice is among the most expensive to grow, at $386 an acre, followed by cotton at $298, according to the Agriculture Department. Corn costs $166 per acre to produce, while soybeans, which require relatively little fertilizer, can be grown for $79 an acre.