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Friday, October 14, 2011

Farm leaders in Congress agree on outlines of new subsidy system, amount of budget cuts

A proposed new system of farm subsidies is to be outlined today by leaders of the agriculture committees in Congress, in a letter to the "super committee" that is looking for ways to cut the federal budget and deficit, Charles Abbott reports for Reuters. The cuts would total $23 billion over the next 10 years, Kansas Sen. Pat Roberts, top Republican on the Senate panel, told The Associated Press.

As expected, "The proposal would end the $5 billion-a-year direct payment subsidy," Abbott reports. "It would endorse a revenue-assistance program to shield growers from 'shallow losses' from poor yields or low market prices as the new basis for the U.S. farm program." In other words, a new system of crop insurance. (Read more)

DTN Executive Editor Marcia Zarley Taylor writes, “Since the 1980s, farm safety nets have largely focused on protecting farmers from low prices, not necessarily low incomes. Now a revolutionary consensus among farm groups means that a crop insurance program is emerging as the core replacement for decades of cumbersome programs involving price supports, direct payments and target prices." (Read more, subscription required) Thanks and a hat tip to Keith Good of FarmPolicy.com.

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