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Obama signs sprawling farm bill, lauds rural progress

U.S. President Barack Obama speaks during a visit to Michigan State University in Lansing, Michigan February 7, 2014. REUTERS/Kevin Lamarque
U.S. President Barack Obama speaks during a visit to Michigan State University in Lansing, Michigan February 7, 2014. REUTERS/Kevin Lamarque

By Roberta Rampton

EAST LANSING, Michigan (Reuters) - In a large barn smelling faintly of horses, President Barack Obama signed the $956 billion farm bill into law on Friday, comparing the five-year law to "a Swiss Army knife" because of the variety of ways it can support jobs in America.

"It multi tasks," Obama said, describing how the law supports not only farmers and ranchers but poor families on food stamps, researchers working on biofuels, and businesses developing and exporting new products from rural America.

Obama signed the bill - which the Congressional Budget Office says will save $16.6 billion over 10 years compared to current funding - at Michigan State University, the oldest land-grant university in the nation. Using a different measure, lawmakers have estimated the savings at $23 billion.

Michigan is the home state of Senator Debbie Stabenow, chairwoman of the Senate Agriculture Committee, who was on hand for the signing along with a small group of Democratic lawmakers and U.S. Agriculture Secretary Tom Vilsack.

The White House invited 50 lawmakers, including Republicans involved in the years-long negotiation process that produced the final bill. But in a sign of ongoing tensions with Obama, no Republican lawmakers attended.

The president noted the compromises involved in the legislation, which runs to over 350 pages, and called the bill, passed with bipartisan support, "a good sign."

He also urged lawmakers to keep the momentum going and pass bills to reform immigration laws, extend unemployment insurance, and raise the minimum wage.

The farm bill cut funding for food stamps to the poor by about $8 billion over 10 years, or about 1 percent - a measure decried as too harsh by anti poverty groups and too generous by Republicans, who sought even larger cuts.

Obama has made addressing the gap between rich and poor a major policy focus for his administration this year.

USDA's Vilsack said there would be changes in the way his department delivers food stamps, but downplayed the impact of the cuts, carved out by cutting benefits to recipients who are also enrolled in a federal heating assistance program.

"I would expect and anticipate not a significant impact on the overall availability" of food stamps, he said.

Some 47.4 million Americans receive food stamps, according to USDA's most recent figures. The CBO's analysis of the farm bill assumes a $90 million reduction in food stamp funding for 2014 - which would amount to about $2 per recipient, if cuts were spread equally - rising to $800 million in 2015.

The bill ended nearly $5 billion in annual automatic payments to farmers and landowners, long criticized as a waste of taxpayer money, and consolidated a variety of overlapping conservation programs.

The bill also expanded a crop insurance program for farmers and left a host of other farm supports intact. It contained provisions on everything from farmers markets to funding into chronic deer wasting disease.

"The last five years have been the best five years in agriculture in the history of the country," Vilsack told reporters traveling with Obama, noting farm income has been at record highs as exports surge.

"Obviously we want to continue that momentum, and that required the passage of a farm bill," Vilsack said.

Obama announced his administration would do more to work with small rural businesses to connect them with potential investors and export markets.

Before the bill signing, Obama and Vilsack donned safety glasses and toured a pilot plant at the Michigan Biotechnology Institute, where researchers were working on scaling up a process that compresses waste material from corn crops into pellets to use for animal feed or to make fuel.

The center, a subsidiary of the Michigan State University Foundation, helps researchers and companies commercialize products made from plant materials, such as polylactic acid, a biodegradable material agricultural giant Cargill developed to make plastic bags.

The farm bill's energy title will provide $800 million in loan guarantees over 10 years to small manufacturers and biorefineries, Vilsack said, describing how soybeans are used in Ford car seats and corn cobs are used in plastic soda bottles.

"There's just an amazing opportunity here to bring manufacturing back," Vilsack said.

(Reporting by Roberta Rampton, editing by Ros Krasny and Chizu Nomiyama)

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