Farm bill hits new roadblocks, finds new scandal

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April 2002

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Farm bill hits new roadblocks, finds new scandal
After lengthy debates and bickering in both the House and Senate, the farm bill looked like it was finally ready to become a law. But not so fast.

Ever since its passage in the Senate it has been holed up in committee, ironing out details of contention and succumbing to last-minute compromises. Entirely new programs and allotments have been added to the bill that critics say already catered to almost every special agricultural interest.

Among the brand new elements is a $3 billion quota buy out for peanut farmers, with a fine print that spells out fishy at best. Once again it was the farm subsidy watchdog, the Environmental Working Group, that uncovered the puzzling intricacies of the peanut subsidy. Elizabeth Becker publicized the findings in a March 4 New York Times article.

The cash payments peanut farmers will receive is meant to be compensation for the negative impact of the North American Free Trade Agreement (NAFTA). Since NAFTA, American peanut farmers have lost out in competition to Canadian and Mexican nuts. Under the new system, the government will actually buy out a farmer's share of commodity quotas that have been in place for the last 70 years. Although the farmers are essentially selling their license to grow a certain amount of peanuts on a certain amount of land, they will still be allowed to grow and sell peanuts on the same land.

As it turns out the quota system could be quite lucrative for clever investors like the John Hancock Insurance Company which owns a large share of peanut quotas it never intended to farm. It stands to gain as much as $2.1 billion from the U.S. government in the quota buy out. Quotas for peanuts can in fact be traded and rented.

Other hotly contested clauses and provisions in the bill include limits on how often a dog can be bred (much to the consternation of the American Kennel Club), limits on food stamps to legal immigrants, an overall $275,000 individual subsidy cap, and several provisions for conservation and environmental concerns.

A bill that has spent over a year in the many houses and halls of Congress will be finalized by a 21-member committee of Senators and Representatives in the coming months. —Tara Dix

For more on the intricacies of the peanut subsidy program

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