WASHINGTON -- The Senate Thursday approved $3 billion in cuts to farm programs over the next five years, but lawmakers rejected a proposal backed by Sen. Chuck Grassley to reduce subsidies to the nation's largest farms.

Thursday's actions came during consideration of a broad deficit-reduction bill that trims $39 billion in social service spending over the next five years and raises revenue by opening Alaska's Arctic National Wildlife Refuge to oil drilling.

The Republican-backed bill, approved 52-47, must now be reconciled with similar cuts presently under consideration in the House.

The Senate measure makes modest cuts to farm programs between 2006 and 2010. The bill would reduce commodity payments 2.5 percent and cut $1 billion from conservation programs.

Grassley's plan would have found savings in the farm program to offset those cuts. He called for capping subsidies at $250,000 per married farming couple and closing loopholes that he says large farms use to exceed payment limits. The change would save the government $1.1 billion over five years, Grassley said.

The plan's supporters say large farms exploit the subsidies by overproducing, which leads to lower commodity prices and higher land values and rental rates.

Democratic Sen. Tom Harkin backed the plan, saying that "by cutting payments to the largest farms, we will shift the burden of budget cuts away from America's family farmers."

But opponents of the plan said that now was not the time to consider changing farm policy.

"This issue will be dealt with in the farm bill in 2007," said Senate Agriculture Committee Chairman Saxby Chambliss, R-Ga, who lead the effort to ultimately defeat the measure 54-46.

Lawmakers from southern farm states have fought efforts to reduce farm payments for years because rice and cotton cost more to grow and receive higher subsidies.

But the measure still has broad, bipartisan support, said Grassley, adding, "I will continue to fight for the small and medium-sized farmers with this good, sound policy that was behind this amendment."

Ken Cook, president of the Environmental Working Group, called the defeat of the measure "a sellout not only for taxpayers but for more than 95 percent of the farmers in this country."

In a report released this week, the group found that 62 percent of the $12.5 billion in farm payments last year went to the top 10 percent of recipients. The largest producer, Riceland Foods Inc of Stuttgart, Ark., received $14.6 million in 2004.

Contact Raam Wong at r-wong@northwestern.edu.