Farm subsidies likely to be cut, just a matter of how much and which ones

The Republicans taking over the House of Representatives are promising to cut the federal deficit. For farmers, the question is no longer if farm subsidies will be cut but which ones and how much, the vice president of DTN writes. "Some legislators want to cut direct payments; others want to preserve them," Urban C. Lehner writes for DTN. "Some want to dismantle the Conservation Reserve Program; others are horrified at the thought." Those in the agriculture industry aren't speaking with a unified voice about possible cuts, either.

Lehner notes, "A Texas farmer expressed what’s on at least some farmers' minds ... A progressive farmer does not need subsidies. What USA farmers need is crop insurance to cover the growing risk." Meanwhile the Iowa Farm Bureau and others are "looking for a richer, county-based ACRE program, and are willing to give up direct payments to get it," Lehner writes. He cautions that the "Oklahoma Farm Bureau likes direct payments and the new chairman of the House Agriculture Committee is an Oklahoman. So the chances of Congress abandoning direct payments are slim."

Lehner acknowledges some cuts in farm spending are likely no matter what, but the deep cuts projected by many may not happen as "farmers' friends in Congress will fight to hang on to as much as possible and they've been successful facing budgetary pressure in the past." He adds that defenders of the status quo have one big factor in their favor: gridlock. With political gridlock between the split-party Congress, "we're more likely to see the whole government shut down for lack of accord on raising the debt ceiling than fresh legislative initiatives," Lehner writes. (Read more)