Iowa proposal to end direct payments garners mixed reactions

Last week we reported the Iowa Farm Bureau had broken with most mainstream agriculture groups in favoring the end to direct payments to farmers beginning with the 2012 Farm Bill. Now, Iowa's "landmark vote for overhauling farm subsidies is getting attention from farm groups and policymakers around the country," Philip Brasher of the Des Moines Register reports. "Whether it gets their support is another matter." The American Farm Bureau Federation will rule on the Iowa proposal when it reviews its policies in January.

"The smaller and more populist-leaning National Farmers Union likes the idea of ending the fixed payments," Brasher writes. Roger Johnson, president of the union, explained, "We really think that the support that's provided to farmers and ranchers ought to be based on some sort of rationale that involves performance below average, a disaster, low prices, poor production." Congress is interested in the idea as well after "the House Agriculture Committee brought in Iowa State University economist Bruce Babcock to lay out a plan for shifting the money that goes to fixed payments into expanding the Average Crop Revenue Election program," Brasher writes.

Many farmers across the South and Plains states favor the fixed payments and will likely resist giving them up, Brasher writes. "The direct payments are more important on some crops than others in terms of the contribution they make to income," John Anderson, an economist with the AFB, told Brasher. U.S. Department of Agriculture data shows "rice growers receive $96 an acre, while cotton farmers collect about $34 per acre," Brasher writes. "Payments to corn growers average $24 an acre." (Read more)