President Obama's budget would cut farm subsidies. The budget's fact sheet for the Department of Agriculture says the proposal "targets aid to family farmers -- rather than corporate megafarms," and Obama said in his speech to Congress Tuesday night, "In this budget, we will ... end direct payments to large agribusinesses that don't need them." That echoed Obama's campaign rhetoric and other statements about limiting the definition of a farm.
A more detailed budget narrative says the budget calls for a $250,000 limit on commodity program payments and "reflects the president's commitment to fiscal responsibility by reducing direct payments to the largest farmers, reducing crop insurance subsidies, eliminating cotton storage credits, eliminating funding for the Resource Conservation and Development program, and reducing program funding for overseas brand promotion."
Direct payments to producers with annual sales of more than $500,000 would be phased out over three years. The narrative notes that such payments were started in as a supposedly temporary measure in the 1996 Farm Bill but were renewed in 2002 and 2008. "Large farmers are well positioned to replace those payments with aternate sources of income from emerging
markets for environmental services, such as carbon sequestration, renewable energy production, and providing clean air, clean water, and wildlife habitat," and the Agriculture Department will help develop those markets, the narrative says.
American Farm Bureau Congressional Relations Director Tara Smith told Tom Steever of Brownfield Network that $500,000 in sales is relatively small. “If you look at soybean farm, for example, that has $500,000 in sales, by the time you take out cost of production, that farmer actually only nets only $36,000,” she said. “To be nickel and diming those kinds of farmers, we have some significant concerns with that.” (Read more)
Agriculture Secretary Tom Vilsack has suggested that "wealthy landowners, who don't do much more than make telephone calls to inquire about production decisions, shouldn't be eligible for government payments," Bill Tomson writes for Dow Jones Newswires. Vilsack told reporters recently that he was "particularly interested in suggestions that would help ... target the payments to farmers that really need the payments and to ensure the payments are not being provided to ineligible parties."
Others say that cutting farm subsidies could have disastrous effects. In a letter to Vilsack, Oklahoma Rep. Frank Lucas, ranking Republican on the House Agriculture Committee, wrote, "At a time when the USDA recently reported that U.S. net farm income is down 20 percent from last year, it is irresponsible to even think of eliminating the one stable form of support for our producers." (Read more) "A plunge in commodity grain prices since last summer is shrinking profits across the farm sector, making it even more politically dicey for farm-state legislators to go along with any cuts in federal aid," note Brody Mullins and Scott Kilman of The Wall Street Journal.
Crop insurance subsidies would be reduced for "both insurance companies and farmers," the budget narrative says. "Over the last several years, subsidies for crop insurance companies have grown rapidly without improving program coverage or customer service for farmers. Current subsidy levels exceed what is necessary to encourage farmer participation and they do not constitute a sound value to taxpayers." The RC&D program was started in 1962 "to build community leadership skills," the narrative notes. "After 47 years, this goal has been accomplished," and state and local councils "are now able to secure funding for their continued operation without federal assistance."
No comments:
Post a Comment