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The Washington Post reports that while negotiators for the US Senate and House of Representatives have negotiated an agreement for a new $300 billion farm bill, President Bush has said he will veto it because it increases subsidies to farmers at a time when farm income is at record highs.

According to the Post, the bill "is stuffed with plums for key constituencies. Dairy farmers will get as much as $410 million more over 10 years to cover higher feed costs, and negotiators tucked in an annual authorization of $15 million to help 'geographically disadvantaged farmers' in Alaska, Hawaii, American Samoa and Puerto Rico. The bill assures growers of basic crops such as wheat, cotton, corn and soybeans $5 billion a year in automatic payments, even if farm and food prices stay at record levels … Advocates of the bill stressed that eligibility will be tightened by prohibiting anyone earning more than $500,000 from off-farm sources to participate in the farm programs. Those earning more than $750,000 from farming would also be ineligible for the automatic payments. Currently, only those with more than $2.5 million in income from all sources are ineligible."

However, there are elements in the bill that seem more palatable to people on both sides of the aisle, and that run the risk of being lost in a veto and eventual renegotiation of the bill's terms. The Post writes that "lawmakers in both parties pointed to improvements in the nutrition, conservation and research programs that account for the bulk of the bill's costs. Eligibility for the food stamp program will be eased by increasing the income deduction allowed to qualify, and the minimum benefit will be raised."

KC's View:
One of the comments made by a lawmaker in the piece is that it is going to be tough to explain to urban residents why farmers are getting both high prices and government subsidies. I'll vouch for that…I'm hardly an expert on the issue of subsidies, but it does seem that the payments are more related to politics than actual need.

Then again, it is a pretty good bet that the promised veto also has more to do with politics than policy.