Read the original article at The San Francisco Chronicle.

Administration officials have dashed hopes among farm-state lawmakers from both parties that President Bush will sign a nearly $300 billion farm bill that they finished Thursday.

The veto warning sets up an effort by House Speaker Nancy Pelosi, joined by many farm-state Republicans, to override a veto and defend government payments to farmers earning record incomes even as food prices soar.

Administration officials said the bill, which would set U.S. food policy for the next five years, is loaded with budget gimmicks that disguise a $20 billion increase in spending.

“At a time of record farm income, Congress decided to further increase farm subsidy rates, qualify more people for taxpayer support, and move programs toward more government control,” Agriculture Secretary Ed Schafer said.

Schafer dismissed lawmakers, including Republicans, pushing to override the veto. “The same people stand up and say they’re against corporate welfare and tax cuts for the rich,” he said. “I have visited face to face with our president and he was direct and plain. The president will veto this bill.”

Lawmakers have wrestled for months to expand subsidies to farmers while also boosting conservation and nutrition programs – plus creating first-ever supports for California’s fruit and vegetable growers – to get a bill that can appease everyone and ostensibly meet budget limits.

Income limits

House Agriculture Committee Chairman Colin Peterson, D-Minn., and other farm-state lawmakers hailed as a historic reform a new ban on government payments to farmers who earn more than $750,000 a year and landowners who more earn than $500,000.

But Ferd Hoefner, policy director of the Sustainable Agriculture Coalition, said that under the proposed new limits, a married couple could earn up to $2.5 million and still qualify for government farm payments.

Most of the spending in the bill goes to food stamps, school lunches and other nutrition programs that will receive a $10.4 billion increase. Farm subsidies will cost about $40 billion a year, Peterson said.

Other provisions boost protection for sugar producers, expand tax breaks for thoroughbred racehorses and add subsidies for several crops, all part of an effort to corral support from a broad swath of lawmakers, each with their own interests.

Republican lawmakers from the House and Senate Agriculture committees met with Bush at least twice over the last week to urge him to sign the bill, which lawmakers think is an election-year bonanza for both parties.

Subsidy reform

Bush allied instead with a coalition of environmental, overseas development and taxpayer groups pushing for greater reform of farm subsidies, which affect U.S. diets and promote greater concentration of agriculture among large producers. Bay Area farm and food groups wanted to shift money away from payments to big grain producers and direct policy to support more nutritious and locally grown foods and more environmentally friendly farming practices.

“Faced with a mounting food crisis at home and abroad, Congress had the opportunity through the farm bill to shift funds from wasteful agricultural subsidies for large-scale farms to food aid to meet the needs of the poor,” said Raymond Offenheiser, president of Oxfam America, an overseas poverty and development group. “But instead, congressional leaders settled on a bill that will continue to be costly to taxpayers, undermine our rural economy, damage our trade relationships and hurt the world’s poorest farmers.”

Pelosi has relied on Peterson, a staunch supporter of subsidies, to shepherd the bill through Congress, hoping to aid Democrats in rural districts.

Pelosi said Thursday the bill contains “significant reform” in farm supports and praised the $1.3 billion lawmakers said they included in marketing aid to fruit and vegetable growers, which she said is “a special interest to me in California.” She said her chief interest was the increase in spending on food stamps, food banks and other nutrition programs.

The bill was mostly hammered out over months of negotiations in a closed-door conference committee and primarily among farm-state lawmakers. Negotiators bent over backward to preserve crop subsidies and add a big new “permanent disaster” program, while doling out money to appease environmental and nutrition interests. Some environmental programs were targeted to save money, though overall spending on conservation spending increased.

California Sen. Barbara Boxer became so concerned about several environmental provisions that she put a hold on the bill last week, blocking action, said her spokeswoman Natalie Ravitz.

“As pieces started to leak out of the conference committee we became more and more concerned,” Ravitz said. These included changes to a Wetlands Reserve Program in the Sacramento area to protect migratory bird flyways and a provision on pesticides that could have had the federal government discouraging the use of safer pest-management approaches such as organic farming and integrated techniques that rely on crop rotation and other natural methods of control.

Hold was effective

Blocking the bill “put out a message about how serious we were, and we got their attention,” Ravitz said.

Peterson had tried to put payment limits and other restrictions on conservation programs, drawing a parallel between crop subsidies and conservation. Environmental groups objected, arguing that conservation programs have a public benefit, whereas payments to growers of corn, wheat and other subsidized crops have no public benefit and may do considerable public harm. Boxer largely blocked Peterson’s effort. She also secured a new research program for honeybees and other pollinators in sharp decline, though the program will require funding.

Boxer, who has taken the hold off the bill, said she was pleased that the negotiators restored several of the environmental provisions. “We need to encourage, not restrict, participation in conservation programs such as those that help us restore and protect our wetlands, clean our air and conserve and improve our water resources,” Boxer said.