WASHINGTON -- House Speaker Nancy Pelosi signed off Friday on a five-year farm bill that would keep multibillion-dollar subsidies flowing to cotton, corn and a handful of other crops, deeply disappointing Bay Area food and environmental activists who had hoped that Congress might shift federal farm policy this year to combat obesity, air and water pollution and industrial farming.
Pelosi, a San Francisco Democrat, hailed as reform a bill that would grant subsidies to farmers earning up to $1 million -- five times more than the cap sought by the Bush administration -- while increasing actual payments to farmers. The bill comes during the most prosperous era American agriculture has seen in decades as crop prices and farm income approach or set record highs.
"Bush seems to be taking a harder stance on millionaires than the Democratic Party, which is surprising," said Kari Hamerschlag, policy director for the California Coalition for Food and Farming, a Watsonville group urging lawmakers to move money from crop subsidies to environmental and nutrition programs.
The bill, finished late Thursday night by the House Agriculture Committee, would add $1.6 billion for environmental and pest detection programs and research for California's fruit, nut and vegetable crops. It also would add money for farmers' markets and to provide more fresh produce in school lunch programs. Approval of the money is a breakthrough for the state's specialty crop industry, which receives no direct subsidies.
But the bill leaves the big commodity programs intact for cotton, corn, wheat, rice, soybeans and a handful of other crops that have been subsidized since the Dust Bowl in the 1930s.
Last year, farmers received more than $21 billion in crop subsidies. Average farm incomes are about 20 percent higher than the average U.S. household income.
The committee even threw in an export subsidy for tobacco.
If anything, "we've actually increased the rates at which we support prices" for subsidized crops, said Daniel Sumner, a leading farm economist and director of the Agricultural Issues Center at UC Davis. "We've really done nothing of a significant nature to change those programs. ... I think that's a mistake for the country."
Pelosi's prime motivation in supporting the current farm policy apparently is to preserve the re-election prospects of freshman Democrats in rural districts who toppled Republicans in November and helped secure Democrats their House majority and Pelosi the speakership. Nine of the freshmen sit on the House Agriculture Committee. Several said they feared any vote to reform farm programs would endanger their political prospects.
Pelosi spokesman Brendan Daly said the speaker was trying to "balance equities" between competing groups.
The Bay Area has become a hotbed of opposition to this year's farm bill. Food activists have teamed with environmentalists to form the most potent coalition in 75 years against the traditional farm lobby, one of the most powerful in Washington. Subsidized commodity interests dominate the House and Senate agriculture committees.
Led by Michael Pollan, a professor at UC Berkeley, and Berkeley restaurateur Alice Waters, food activists have become a force against crop subsidies, pushing for what Pollan calls a food bill, not a farm bill.
The activists want more diverse and locally grown food as well as more fresh food in federal nutrition programs such as food stamps and school lunches. They have tied the nation's obesity epidemic to subsidies for corn and soybeans -- the source of high fructose corn syrup and vegetable oils widely used in processed foods.
Ken Cook, president and founder of the Environmental Working Group, said the activists are "shocked that this would be considered reform."
House Agriculture Committee Chairman Collin Peterson, a Democrat whose Minnesota district receives large corn subsidies, said Pelosi backs his bill and will use her power to make sure it passes the House next week.
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Peterson called the $1 million payment limit a "huge change in direction" and warned that the House leadership would quash any attempt -- a rebellion has been promised by Rep. Ron Kind, D-Wis. -- to make any significant changes.
"This is not a deal just between me and the folks that represent these people," Peterson said, referring to members representing subsidized farmers. "The speaker is involved in this."
Peterson dismissed critics outside the traditional farm belt.
"I know people on the outside can sit and complain about this, but frankly most of those people have no clue what they're talking about," Peterson said. "Most people in the city have no concept of what's going on here."
Commodity groups ridiculed the idea that subsidies have anything to do with obesity.
"The farm bill did not require people to eat more than they should," Daren Coppock, chief executive of the National Association of Wheat Growers, told a Washington conference this year. "If the farm bill causes obesity, it also causes AIDS, global warming, the extinction of endangered species, bad grades in school and probably dancing."
But the activists, backed by many agricultural economists, argue that the subsidies produce no public benefit. If federal tax dollars are to be spent in the farm economy, they argue, the money should go to things that benefit the public as a whole.
"I think shifting subsidies into environmental programs ... is a much better way of supporting the goals that U.S. taxpayers and consumers have for our agriculture programs," said Ann Tutwiler, a leading farm policy expert who is a managing director for the Hewlett Foundation.
The same goes for shifting money to nutrition, she said. "Where the activist community is coming down is a better place for U.S. farm policy to be."
Martha Noble, a senior policy analyst at the Sustainable Agriculture Coalition, said alternatives to crop subsidies include "conservation, research for organics and specialty crops -- fruits, vegetables, grasses, things that grow in a diversified food system -- certainly better nutrition, more attention to local foods and local markets."
Activists groups have taken aim at payments for commodities for two reasons: The money provides incentives to increase the use of pesticides and fertilizers and expand farm operations to capture more subsidies. That leads to larger farms and monocultures of single grain crops such as corn and wheat over millions of acres in the Midwest. The subsidies also raise land prices, winding up in the pockets of landowners, who may or may not be farmers, and making it difficult for younger farmers to get started.
Cattle ranchers who use grass pastures are at a disadvantage to large feed lots that use subsidized corn and other feed grains, Noble said, and places such as Iowa and Indiana that once grew apples and vegetables now grow mainly corn.
"We could have a much better agricultural system in this country, more diversity, more diverse food available in lots of different regions" without the subsidies, Noble said.
Rep. Kind promised to lead a fight on the House floor, hoping to pick up many Democrats for his plan to change the bill.
"We anticipate large bipartisan support," Kind said. "I don't think the farm bill is in final form by any stretch of the imagination. The process is just starting."
© 2007 Hearst Communications Inc.