By a vote of 216-208, the House of Representatives approved legislation to overhaul U.S. farm programs.
According to The New York Times, the bill would consolidate or cut $20 billion in farm numerous subsidies, including a $5 billion annual subsidy to farmers and landowners regardless of whether they plant crops.
Some of the funds would be redirected to the crop and livestock insurance programs, which protects farmers from drought and other tough farming conditions. The bill would also establish subsidies for peanut, rice, cotton, fruit, and vegetable growers, and make changes to supply restrictions on milk produced and sold in the United States.
The bill would also remove a provision that causes farmers to revert to 1949 prices if Congress doesn’t adopt a new farm bill. While this provision sounds silly and outdated, it is designed to incentivize lawmakers to pass the farm bill on time, prompting many lawmakers to dispute its removal.
While all of this sounds fine and dandy, the bill likely isn’t going anywhere amid political gridlock in Washington. GOP leaders pushed the bill through without the inclusion of food stamps, which makes up 80 percent of the bill’s original cost. Republicans claim that food stamps will be dealt with later, but House democrats are furious, insisting that GOPs are using the bill to fulfill their own political interests and cut spending that helps poor. Thus, president Obama has vowed to veto the legislation if it ever reaches his desk.
“A vote for this bill is a vote to end nutrition in America,” said Representative Rosa DeLauro of Connecticut.
Nonetheless, the agriculture specifics of the farm bill are starting to take form, and the legislation could be adopted in the near future if both parties can reach a compromise on food stamps.
Agriculture stocks mostly traded higher on Thursday. Market Vector Agribusiness (MOO), Potash (POT), Mosaic (MOS) and Monsanto (MON) all rose in the neighborhood of two percent. The iPath DJ-UBS Livestock ETF (COW) traded lower by one-half of a percent.