House drought bill keeps 5 billion subsidy targeted by reformers

By Charles Abbott
WASHINGTON | Fri Jul 27, 2012 7:51pm EDT

(Reuters) - Farmers would get another round of the $5 billion a year "direct payment" subsidy, targeted by reformers as wasteful spending, in a Republican-drawn offer of disaster aid for farmers hurt by the worst drought in half a century.

The package, unveiled on Friday, combines drought relief with a one-year extension of the farm program. If passed by the House next week and accepted by Senate, it would end a farm-bill stalemate by deferring work until 2013, when cost-cutting pressure may be intense.

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The direct payment, paid to cotton, grain and soybean growers regardless of need, was marked for elimination in farm bills in the House and Senate this year. Budget hawks and environmentalists said the direct payment is wasted money, considering the farm sector enjoys boom times and the huge federal deficit.

An advocate for small farmers, the National Sustainable Agriculture Coalition, called for the House to "vote down this dirty extension bill." The bill would cut soil and water conservation programs while keeping the direct payment, it said.

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