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Programs tied to price and revenue

Programs tied to price and revenue

In reauthorizing farm policies, Democrats and Republicans crafted a compromise to overhaul programs that protect farmers from market swings or bad weather. The law replaced direct payments with programs tied to price and revenue, and raised the threshold at which farmers would get a subsidy when commodity prices fall.

Further savings were projected from spending less on food stamps, based on an assumption states would exit an aid program as eligibility rules were tightened. Most states, however, defied predictions of budget analysts and increased their contributions to "heat-and-eat" aid programs, erasing much of $8.6 billion in projected savings.

"It's very premature to speculate about the farm bill savings when major programs haven't even gone into effect yet," Rachel McCleery, spokeswoman for Senate Agriculture Chairwoman Debbie Stabenow, a Michigan Democrat, said in an e-mail. Farmers will have until March to select from new subsidy options.

A drop in crop prices, combined with subsidies added in the new bill, may more than double payments in 2015 from what lawmakers anticipated, according to one estimate. Making matters worse, the government has proposed lowering a requirement to blend corn-based ethanol into gasoline, which may reduce demand for the grain.

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