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Food stamps, subsidies knotty issues as U.S. farm talks drag on

By Charles Abbott

WASHINGTON, Nov 21 (Reuters) - Time is quickly running out to write a new $500 billion U.S. farm policy this year and one of the biggest problems facing the four key negotiators on the project is how much to cut spending on food stamps for the poor.

Without an agreement by the end of this week it may be impossible to enact a new farm law this year. Congress is more than a year behind schedule in replacing the now-expired 2008 law; it adjourns for the year in mid-December.

The make-or-break issue for negotiators continues to be the size of cuts in food stamps.

The Republican-controlled House of Representatives proposed $39 billion in savings over a decade by tightening eligibility rules. That is nearly 10 times the savings backed by the Democrat-run Senate.

"We talked about it some," Colin Peterson, the top Democrat on the House Agriculture Committee, told reporters as the "big four" negotiators - the leaders of the Senate and House Agriculture committees - took a midday break.

There are disputes over crop and dairy subsidies as well. The Senate says the House would set target prices so high they would override the marketplace and the House says the new revenue protection system supported by the Senate is skewed toward the corn and soybean growers in the Midwest while disadvantaging those who grow wheat, rice and peanuts.

"The commodity title and SNAP (food stamps) are the two issues," said Peterson.

House Agriculture Chairman Frank Lucas brushed past reporters, responding only, "Having fun, having fun" when asked about progress. Late Wednesday, Lucas and the other negotiators said talks were moving in the right direction.

Peterson said the new bill would not repeal a U.S. law that requires packages of beef, pork, lamb and poultry to carry a label listing the country where the animals were born, raised and slaughtered.

Canada and Mexico won a World Trade Organization decision against the first set of U.S. rules on "country of origin" labeling for meat. They are now challenging the current set, unveiled earlier this year.

House Majority Leader Eric Cantor spearheaded the plan for sweeping change to food stamps, formally named the Supplemental Nutrition Assistance Program (SNAP). With nearly one in seven Americans currently receiving aid, Cantor said the program was an unaffordable burden on middle-class Americans.

Democrats voted en bloc against the Republican cuts and the White House has threatened to veto a farm bill that contains "unfair" cuts.

On Nov. 1 SNAP recipients saw a $5 billion cut in benefits, or roughly 7 percent per person, when part of the 2009 economic stimulus package expired.

The Center on Budget and Policy Priorities, a think tank, said this week that SNAP enrollment rose because of the 2008-09 recession and high jobless rates.

It said food stamp costs are certain to fall during 2014 and warned that additional large cuts "would make life harder for tens of millions of Americans."