The farm bill, one of the most crucial pieces of federal legislation to Montana’s economy, will be marked up in Senate and House Agriculture committees beginning Tuesday.

The five-year, $500 billion spending bill affects everything from Montana’s $3 billion farm economy to the state’s 120,000 low-income beneficiaries of Supplemental Nutrition Assistance, better known as food stamps, as well as conservation lands and timber policy.

Several groups who spoke with The Billings Gazette on Monday said they’ll be cautiously watching from the sidelines as Agriculture Committee members go to work.

Billions of dollars are expected to the cut from government programs like the Supplemental Nutrition Assistance Program, or SNAP, which Republican House leaders have indicated could be cut as much as $20 billion, while in the Senate Democrats are trying to limit nutrition program cuts to $4 billion.

One of the deeper cuts is to the federal "heat and eat policy," which in several states expands SNAP eligibility by linking it to home heating assistance. The cut won't impact Montanans, but others will, said Kate Devino, Montana Food Bank Network chief policy officer.

"The nutrition title of the farm bill will have a great impact on Montana.  The proposed changes to the “Heat and Eat” policy, as written in the Senate’s version of the Farm Bill passed last June, would not have a direct impact on Montana.  However, many other components of the Nutrition Title will have significant impacts for Montana’s low income families,"Devino said. "The cuts projected to be included in the House mark-up of the bill are likely to be even more damaging than those included in the Senate’s version of the bill."

Any SNAP cuts or the Emergency Food Assistance Program will greatly impact low-income families in every state, Devino said.

Nutrition programs like food stamps, commodities for seniors and milk for infants born into poverty account for 80 percent of farm bill spending. There are 123,967 Montanans receiving SNAP benefits, up from 80,114 in fiscal year 2008, according to state Department of Public Health and Human Services data. Participation jumped 57 percent during the recession and peaked in 2012, as more Montanans slipped into poverty and the government became more proactive about enrolling poor people who qualified. In state fiscal year 2012, which ended last June, SNAP spending in Montana totaled $195 million, including $27 million in Yellowstone County.

Senate Democrats argue that the cost of SNAP will taper off as the economy improves, a decline that accounts for $4 billion in the estimated spending reductions over the next decade. The House approach is more aggressive, asking for $20 billion in program cuts. The difference between the two approaches will have to be worked out in conference committee assuming the each chamber can get its bill approved by a majority of its members.

Most Montana groups prefer the Senate version of the farm bill over the House version, in part because the Senate managed to pass a farm bill last year, a good sign that the votes are there for passage this year provided the bill doesn’t change much. House Republican leaders refused to bring the House Agriculture Committee’s version of the farm bill to a vote last year, arguing that the general body lacked the votes to pass the bill. It isn’t clear if the House has the votes to pass a farm bill this year, but leaders have promised a floor vote.

“I think we’re off to a good start here and we’re actually excited about the potential of actually getting it done this year,” said Ryan McCormick, president of the Montana Grain Growers Association.

Farmers have agreed to the elimination of direct payments, a subsidy that many received annually whether they planted anything or not. Direct payments cost taxpayers about $4.9 billion a year. They will be replaced with a bolstered crop insurance program. The reasoning behind the change is that crop insurance doesn’t pay out every year. However the insurance will be subsidized, with the government picking up 60 percent of the cost.

There is also expected to be a new program to cushion revenue losses when commodity prices drop below a target range.

Nutrition and commodity programs are the farm bill’s biggest components, but there are several smaller provisions of interest to Montana, starting with the federal sugar program.

Sugar beets are a multimillion dollar component of southern Montana’s economy.

The sugar program regulates the amount of foreign sugar imported to the United States from most nations other than countries involved in the North American Free Trade Agreement. The program also offers some support when the price of sugar falls to extreme lows.

But there is a persistent lobbying effort by confectioners and food companies to end the sugar program and allow foreign sugar to flow freely into the United States.

Luther Markwart, lobbyist for the American Sugarbeet Growers Association, said he expects there will be attempts to eliminate the sugar program once the farm bill reaches the House and Senate floors. However sugar prices have fallen significantly in the last two years, which might make cutting the program, which most years requires no federal funds, difficult.

For Montana, the lawmaker to watch is Sen. Max Baucus, D-Mont. Baucus is a senior member of the Senate Agriculture Committee and likely to be a on the conference committee to reconcile differences between the House and Senate farm bill versions.

Monday, Baucus was rolling out a new farm bill provision to double the amount of spending on bark beetle timber harvests. Montana has lost 6.2 million acres of forest to bark beetles, second highest in the country, Baucus said. His proposal would increase tree removal spending to $200 million.

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