Lobbyists for Banks to Beets Fight Over $1 Trillion Bill

After his side lost a fight over federal sugar aid in the Senate last month, Bob Simpson, the president of Jelly Belly Candy Co. of Fairfield, California, made plans to take his message directly to Congress.

“I need to get in front of our elected representatives,” said Simpson, who is also the chairman of the National Confectioners Association.

Simpson is likely to find the Capitol’s hallways crowded. With almost $1 trillion in federal spending over the next decade at stake, interest groups ranging from dairy farmers to crop insurers are converging on Washington. The insurers want to expand the number of crops they cover; cotton-growers want new protections against price swings; and almost everyone is playing defense against threatened budget cuts.

The rewrite of agriculture policy known as the farm bill, which resumes today in the Senate, typically occurs at five-year intervals and affects a wide range of businesses that can’t afford to stay away.

“The government is tightening its belt everywhere except the farm bill -- it’s the poster child for special interests,” said Andy Roth, vice president of government affairs for the anti-tax Club for Growth, who calls the measure “a cesspool for logrolling.”

Lobbying Dollars

Lobbying by agriculture interests increased to $138 million last year from $112 million in 2007, the year before the last farm bill passed, according to the Center for Responsive Politics, a Washington-based research group that tracks spending on lobbying. Agriculture-industry employees spent $91 million on the 2012 elections, up from $70 million in 2008. Much of that spending is concentrated on members of the House and Senate agriculture committees, which are dominated by rural lawmakers sensitive to farmer and agribusiness interests.

Lawmakers who supported the status quo on sugar aid, for example, received almost three times as much campaign cash from growers opposed to change than from users who want a new policy.

Crop subsidies benefiting buyers such as Archer-Daniels-Midland Co. (ADM) and funding food stamps used for purchases at Supervalu Inc. (SVU) are prime targets for lawmakers seeking cuts in the bill, which reauthorizes all U.S. Department of Agriculture programs for five years. Projected over a decade, the Senate plan would cost $955 billion, while a House version that may be debated later this month is estimated at $940 billion.

Senate Debate

The Senate today will start debating amendments, including a boost in U.S. international food aid and a possible insurance program for alfalfa, with a goal of passing a bill this week, according to Majority Leader Harry Reid, a Nevada Democrat. An unrelated plan to stave off a jump in student loan rates will also be attached to it, he said. Nutrition assistance, the source of about three-quarters of proposed spending, is the central controversy in what would be the most expensive non-appropriations legislation to pass the Senate this year.

Leaders of both the House and Senate agriculture committees tout their plans as saving money. By ending a farm-subsidy program that costs $5 billion annually and restricting some food-stamp payments, the Senate version would carve $23 billion over 10 years from spending under current programs. Some of the farm-aid cuts would go into expanded crop insurance.

“If every committee focused on streamlining and setting priorities and making tough decisions and saving money, I think we’d be pretty close to a balanced budget,” Senate Agriculture Committee Chairwoman Debbie Stabenow, a Michigan Democrat, told reporters.

Lobbying Power

At a time of budget cuts, it’s a test of lobbying power versus fiscal discipline, and special interests are winning, said Josh Sewell, a senior policy analyst with Taxpayers for Common Sense in Washington, a group advocating less federal spending.

“It shows narrow interests can really marshal their power where it matters for them,” Sewell said.

Sugar is a case in point, said Larry Graham, chairman of the Coalition for Sugar Reform, an umbrella group of sweetener users and organizations including the the Club for Growth, the U.S. Chamber of Commerce, and the National Association of Manufacturers.

Graham’s coalition includes organizations, such as the chamber, credited with helping to shift the House to Republican control in 2010. So far, the group has been unable to defeat the American Sugar Alliance, a collection of grower groups.

Producer Spending

Sugar producers spent at least $2.9 million on lobbying in the first three months of this year, according to filings with the Secretary of the Senate, and unlike the behemoths fighting them, “this is the only thing they care about,” Graham said. “Lawmakers don’t really know what’s in the legislation, but they’re thinking they want to support farmers. That makes it an uphill battle for us.”

An amendment to curtail sugar aid failed 45-54 in the Senate last month, with opposition from cane-state senators, including Republican Marco Rubio of Florida, and from Democrat Al Franken of Minnesota, the top U.S. state in production of beet sugar.

Senators who voted to keep sugar aid as-is averaged $9,045 in campaign donations from the sugar industry in 2011-12, according to a Bloomberg News analysis of Center for Responsive Politics data. The senators who voted to cut the program averaged $3,314.

For sugar growers, continuing current policies may be a matter of survival, as surpluses that have pushed prices down by almost half in the past 10 months and may trigger federal payouts this year, said Jack Roney, the sugar alliance’s economics director in Washington. The group has taken out advertisements in major newspapers supporting current policy.

Price Pressure

Sugar aid doesn’t cost taxpayer dollars most years because of higher prices, although an Iowa State University study suggests current supply restrictions may cost consumers $3.5 billion a year in higher grocery prices.

“There is value in supporting stable supplies of high-quality sugar,” he said.

This week, challenges may rise against a new dairy program that would boost prices by restricting supplies. Opposition may also emerge against crop insurance aid, including an attempt to strip out language in the bill that would keep the government from gaining savings from any negotiations with crop insurers.

Dairy interests spent at least $1.5 million in the first quarter of this year, Senate filings show, while crop insurance, backed by companies, including San Francisco-based bank Wells Fargo & Co. (WFC), attracts lobbying from the financial sector.

“The 2013 farm bill is very important legislation for our many agriculture customers,” said Angenette Lau, a Wells Fargo spokeswoman. “We’ve expressed our views in support of crop insurance.”

Senate Bill

The Senate committee’s bill, which largely resembles a plan that passed last year on a 64-35 bipartisan vote, is expected to be approved by the full chamber this week. From there it will have to be reconciled with whatever may pass in the House, a process sure to provoke more lobbying.

Spending opponents can already claim one victory: an amendment co-sponsored by Senators Richard Durbin of Illinois, the chamber’s No. 2 Democrat, and Tom Coburn, an Oklahoma Republican, to lower the government’s share of crop insurance premiums for farmers with adjusted gross incomes of more than $750,000. That was approved earlier, 59-33.

Still, some attention is already turning toward the House, where farm legislation stalled last year. A bill has moved out of the agriculture committee and the debate in the full chamber may begin the week of June 17, said Representative Collin Peterson of Minnesota, the committee’s top Democrat. The floor battles will rage on terrain generally more hostile to subsidies, he said.

Simpson, the Jelly Belly president, said he can take another fight.

“Our coalition is strong,” said Simpson, whose candies were a favorite of President Ronald Reagan. “We can turn this around.”

To contact the reporters on this story: Alan Bjerga in Washington at abjerga@bloomberg.net; Jonathan D. Salant in Washington at jsalant@bloomberg.net.

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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