Wednesday, May 21, 2008

Farm Bill contains new program that USDA says could cost $10 billion a year if prices fall

A new program added to the Farm Bill in final negotiations could cost billions if commodity prices decline from currently high levels, the Department of Agriculture warned this week. "They have taken a good idea and gone to an extreme," Deputy Agriculture Secretary Chuck Conner said. President Bush has said he will veto the bill, but it passed by veto-proof margins.

The new program, Average Crop Revenue Election, "received almost no attention during floor debate last week," Dan Morgan writes for The Washington Post. "The voluntary program guarantees farmers a subsidy if they suffer losses because of low prices or poor crops. Since the amount of the subsidy for 2009 is tied to recent record prices, farmers could reap a windfall if prices drop suddenly." Supporters of the program said USDA's $10 billion annual estimate was a worst-case scenario that was highly unlikely. (Read more)

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