Thursday, June 21, 2012

The Other Side of the Gillibrand Amendment

By now you probably heard that an amendment introduced that the Senate overwhelmingly defeated an amendment by Sen. Kirsten Gillibrand (D-NY) to preserve $4.5 billion in funding for the Supplemental Nutrition Assistance Program (SNAP) by trimming the guaranteed profit for crop insurance companies to 12% from 14%.  The vote, which was part of the overall discussion on the Farm Bill, wasn't even close, and the amendment was defeated by a  66-33 margin.

Those of us who participated in Bread for the World's Lobby Day on June 12, asked our senators to support the amendment.  Sen. Tom Udall was one of the 33 senators who voted yay, and Sen. Jeff Bingaman joined the majority who voted nay.  Here is the Roll Call vote.   (For Bread members in New Mexico, who would like to send  a note of thanks to Sen. Udall, click here.)

This was a missed opportunity to protect funding for a program that helps countless of our brothers and sisters put  meal on the table!

"Half of the food stamp beneficiaries are children, 17 percent are seniors, and unfortunately now 1.5 million households are veteran households that are receiving food stamps," Gillibrand said in a quote published in an article The Huffington Post.

But there is also the other aspect of Sen. Gillibrand's amendment: crop insurance.   Earlier this month, The New York Times published  piece entitled  Crop Insurance Proposal Could Cost U.S. Billions

To understand the issue better, it's important to know about crop insurance.  Here's how the Times describes it:

"Crop insurance has existed for decades, with the government now spending about $7 billion a year to pay about two-thirds of the cost of farmers’ premiums. Under the federal program, farmers can buy insurance that covers poor yields, declines in prices or both."

So how could it end up costing more to expand the crop insurance program?

"At the same time that high crop prices are prompting farmers to expand into millions of acres of land once considered unsuitable for farming, Congress is considering expanding a federal insurance program that reimburses farmers for most losses or drops in prices."

"The combination could cost the government billions of dollars if the newly farmed land does not yield enough crops and especially if crop prices fall."

And here is an important point made in the article:

"Even some farmers argue that the subsidies are already generous to agribusinesses, especially with the government facing large deficits. Jim Faulstich, a farmer and rancher in Highmore, S.D., said he was in favor of farmers having crop insurance, but added that the insurance should not be used to make money at taxpayer expense."

And mind you, the Gillibrand Amendment was not calling for a drastic reduction in crop insurance funding: only a limit on the guaranteed profit for insurance companies. 

This was a very viable way to ensure an adequate level of funding for SNAP, and the Senate dropped the ball.

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