WASHINGTON — After years of delay, the U.S. House passed a nearly $1 trillion farm bill Wednesday that would help many Maine farmers, but could cut food stamp benefits for as many as 10,000 state residents.

The five-year farm bill now headed to the Senate contains significant political compromises on several major issues.

EFFECTS OF THE BILL

FOOD STAMPS

Maine is one of 15 states, along with the District of Columbia, that may be forced to absorb all of the $8 billion cut to the program over the next decade. 

MILK PRICES

The farm bill would phase out the program that helps cover costs when the amount paid to farmers for milk drops below a set price, replacing it with a subsidized dairy insurance program.

ORGANIC FARMING

In addition to funding grants to improve and expand farmers markets, the bill includes $13 million to help farmers cover the costs of certifying their crops as organic.

Additional Photos

After years of delay, the U.S. House passed a nearly $1 trillion farm bill Wednesday that would help many Maine farmers, but could cut food stamp benefits for as many as 10,000 state residents. 2010 File Photo/The Associated Press

Some Democrats were unhappy with the $800 million-per-year reduction in food stamp funding contained in the bill, but that cut was only 20 percent of the reduction originally sought by House Republicans. The bill would eliminate subsidies on some crops but would retain billions of dollars in payments for major crops such as corn and soybeans. Dairy farmers, meanwhile, were still trying to decipher a new price support program that sparked a political fight that delayed action on the bill for weeks.

The bill passed, 251-166. Maine’s two Democratic House members split their votes.

U.S. Rep. Mike Michaud, District 2, called the bill “a boon to our state’s organic farmers” while praising funding that would help key agricultural sectors in Maine, such as potatoes and wild blueberries, two important crops in his district.

“This bipartisan bill, while not perfect, represents a true compromise that will greatly benefit Maine farmers and our state’s economy,” Michaud said in a statement.

U.S. Rep. Chellie Pingree, District 1, voted against the bill despite the inclusion of several “local-foods” and organic-crop initiatives that she has pursued for years. Pingree said she objected to the $800 million per-year cuts to the Supplemental Nutrition Assistance Program – or SNAP, as the federal food stamp program is called – and to the lack of major reforms to crop subsidy programs.

“This Farm Bill is a real missed opportunity,” Pingree said in a statement. “Subsidies for the biggest farms were protected while help for struggling families was cut.”

Following is a breakout of three areas of the 900-plus-page bill that are important to Maine: food stamps, local foods programs and dairy support.

FOOD STAMP REDUCTIONS

Maine is one of 15 states plus the District of Columbia that together might be forced to absorb the entire $8 billion in food stamp cuts over the next decade.

The reason: a little-known program dubbed “Heat and Eat” in some states that gives extra benefits to some food stamp recipients if they also receive minimal amounts of aid through the Low Income Home Energy Assistance Program, or LIHEAP.

For years, more than a dozen states have given as little as $1 each per year in LIHEAP assistance – or in Maine’s case a $5 check covering five years – to food stamp recipients who receive no other heating aid, allowing them to qualify for larger monthly SNAP allowances.

To supporters, the program is a way to maximize federal help for families who already qualify for food stamps. Critics, however, say “heat and eat” states are exploiting a loophole.

The farm bill would require states to give LIHEAP recipients at least $20 each per year for them to qualify for the program – a change that the authors contend will save more than $8 billion over 10 years by encouraging states to drop the program.

Maine officials, however, indicated the state may not drop it.

Roughly 10,000 Maine households currently take advantage of the heat and eat program, according to MaineHousing, which administers LIHEAP. If the farm bill passes, it would cost the state at least $200,000 a year, rather than the $10,000 it spends now, to keep those households in the program.

The Congressional Budget Office determined that changing the heat and eat threshold would reduce food stamp benefits by an average of $90 per month for about 850,000 households nationally.

But a Maine Department of Health and Human Services official said Wednesday that the department did not have figures for how much extra food stamp assistance, on average, participants receive through the program.

“We are in the process of analyzing this particular impact on our office,” said Bethany Hamm, director of the DHHS Office for Family Independence, which administers the SNAP program in Maine.

The issue presents a conundrum for Maine officials. Maine received just shy of $40 million in federal LIHEAP funding in fiscal year 2012 to provide heating assistance to more than 50,000 households. Using those figures, the $200,000 tied to the food stamp program would translate to a $4 benefit per household statewide – enough to purchase about a gallon of heating oil at current prices.

“There are an enormous number of people in the state of Maine right now who are cold and need all of the help they can get,” said Peter Merrill, deputy director of MaineHousing. “That’s not to say people on food stamps aren’t struggling. That’s why this is such a miserable decision.”

Merrill and Hamm said their departments would discuss what to do if the bill passes the Senate and is signed by President Obama, as is expected. Merrill said he “suspects that we will keep the program.”

“I’ve talked to our staff about the fact that we are going to have to make that decision,” he said.

HELP FOR FARMERS

The farm bill contains a number of provisions that farmers and agriculture interests say will likely benefit Maine.

The bill would:

• Provide $30 million (up from $10 million) for the Farmers Market Promotion Program, which offers federal grants to improve or expand farmers markets, community-supported agriculture and other direct-to-consumer programs.

• Allow organic farmers who purchase crop insurance to recoup more of any losses they suffer starting in 2015 by requiring the U.S. Department of Agriculture to base compensation rates on the retail or wholesale prices of organic products rather than on the prices of conventional products.

• Provide $13 million (up from $5 million) to help farmers cover the costs of certifying their crops as organic.

• Expand the ability of food stamp recipients to use their electronic benefit transfer (EBT) cards to make purchases at farmers markets and through community-supported agriculture programs.

With 139 farmers markets statewide, Maine has more such markets than nearly every other state.

Colleen Hanlon-Smith, executive director of the Maine Federation of Farmers’ Markets, said the farm bill provides federal money to create a “nutrition incentives” program that would increase the purchasing power of EBT cards when used at farmers markets. For instance, some markets might double the value of every EBT dollar spent while others might offer $5 in additional spending for every $20 spent, with the balance reimbursed with federal money.

There are currently 27 farmers markets in Maine that accept EBT cards; a dozen of those already offer “nutrition incentives” programs financed through grants, donations or other sources.

Hanlon-Smith said her organization was also pleased that the farm bill contains funding for programs to support the Farmer’s Market Promotion Program, to support young farmers and nutrition programs for senior citizens.

“So while the reduction to food stamps was disappointing, moving forward with some of these other pieces that will support local agriculture is positive,” Hanlon-Smith said.

Pingree supported many of those provisions while a member of the House Agriculture Committee and included several in a “Local Farms, Food and Jobs Act” that she introduced last year, but which was not approved.

“I wish I could vote for this bill because there are some good provisions that we fought for to help sustainable farmers,” Pingree said. “But in the end, it’s just too much of a giveaway to corporate special interests.”

Pingree is married to S. Donald Sussman, majority owner of Maine Today Media, which publishes the Portland Press Herald, Kennebec Journal and Morning Sentinel.

DAIRY POLICY

Changes are also coming to the way dairy farmers are protected from dramatic price swings that make milk a boom or bust commodity.

Whether those changes will be embraced by Maine’s industry is unclear.

The farm bill would phase out the Milk Income Loss Contract program that helps cover some costs for dairy farmers when milk drops below a set price. Instead, dairy farmers would be able to buy insurance policies to help cover losses when milk prices plummet, feed prices increase, or both. Premiums paid by small farms would be heavily subsidized.

The dairy insurance program became one of the most contentious aspects of the farm bill. House Speaker John Boehner, R-Ohio, refused to bring the bill to the floor until negotiators removed a requirement that farmers who buy insurance also agree to reduce milk production when there is a market glut.

So how will the new system affect Maine’s roughly 300 dairy farms, which represent the second-largest agricultural product in the state?

“We have to figure out what it means for Maine farms and are crunching the numbers to see what it means for farms’ bottom line and their out-of-pocket (costs),” said Julie-Marie Bickford, executive director of the Maine Dairy Industry Association.

Many Maine dairy farmers have been lukewarm to the insurance program because, they contend, it applies a one-size-fits-all approach to an industry that is anything but uniform. Maine farms range from a few cows to more than 1,500, but most are small by midwestern and western standards.

Instead, the industry had been pushing for more comprehensive reforms. Sen. Susan Collins, R-Maine, added language to the Senate version of the farm bill that would require the USDA to gather suggestions for more comprehensive reforms at public hearings around the country. But that language was dropped from the compromise in the final hours.

Kevin Miller can be contacted at 317-6256 or at:

kmiller@pressherald.com