updated 12/13/2007 12:05:00 PM ET 2007-12-13T17:05:00

The Senate narrowly rejected an attempt to limit annual payments to farmers Thursday, frustrating lawmakers who had hoped that this year's multibillion-dollar farm bill would scale back the government's massive subsidy programs.

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The bipartisan amendment to the $286 billion bill would have limited overall farm payments to $250,000 yearly per married couple, down from the current limit of $360,000. It would have also attempted to close loopholes that allow some farmers to collect higher payments and required that farmers be "actively engaged" to receive subsidies.

"We have a federal farm program to help family farmers make it through tough times," said North Dakota Sen. Byron Dorgan, a Democrat who sponsored the amendment with Sen. Charles Grassley, R-Iowa. "It was not created to send multimillion-dollar payments to giant corporate farms, or payments to people who haven't been near a farm in decades."

The amendment was rejected 56-43. Under an agreement between the parties, the amendment needed 60 votes to survive.

Senate Agriculture Chairman Tom Harkin, D-Iowa, had hoped to take significant steps to reduce subsidies in the five-year farm legislation this year but was stymied by Southern lawmakers who favor current law. Southern crops such as rice and cotton are more expensive to produce than most other crops grown around the country.

Harkin voted for the amendment but acknowledged that it would have faced difficulty in House-Senate negotiations on the bill, which would extend and expand crop and dairy subsidies along with popular nutrition aid programs, including food stamps.

The amendment was the latest in a series of attempts to reduce subsidies in the bill. The Senate on Tuesday rejected another amendment designed to reduce government payments to wealthy farmers. The amendment by Sens. Richard Lugar, R-Ind., and Frank Lautenberg, D-N.J., that would have phased out most farm subsidies and replaced them with stronger crop insurance for all farmers.

The overall bill would attempt to limit subsidies by eventually banning payments to "nonfarmers" whose income averages more than $750,000 a year. The bill defines farmers as those who earn more than two-thirds of their income from agriculture.

There would be no income-based limits on what a farmer could collect, though the bill would ban individual farmers from collecting payments for multiple farm businesses.

A House measure passed in July would ban payments to all who earn an average $1 million a year or more.

The Bush administration has threatened to veto both bills, arguing they don't go far enough to reduce subsidies. An administration farm proposal suggested reducing payments to individuals who make more than $200,000. The current cap is $2.5 million.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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