Wednesday, January 30, 2013

Direct payments on chopping block, but House chairman says farmers should sign up for them

Congress is likely to remove direct payments from the Farm Bill later this year to cut spending, despite comments by House Agriculture Committee Chair Frank Lucas, R-Okla., that producers can definitely county on receiving the payments in October, Agri-Pulse reports. Direct payments have become a political target because they are paid to producers regardless of external factors, and we omitted from the Farm Bill that passed the Senate but died in the House last year.

Pat Westhoff of the University of Missouri told Agri-Pulse it would be a mistake to assume the bill is written in stone right now, adding that some legislators might want to change it. Roger McEowen of Iowa State University said there was no guarantee that direct payments would continue, but producers who signed up for them would have an argument that the government would have to honor those payments even if the program ends later this year.

Those who make that argument point to a 1996 Supreme Court case, United States v. Winstar Corp., about rules the government created and later repealed for failing thrift institutions during the savings-and-loan crisis in the 1980s. Three of the thrifts won damages for breach of contract.

Sign-ups for the direct and counter-cyclical payment program begin Feb. 19 through at local Farm Service Agency offices, to they a good place to work on a story about farm subsidies. (Agri-Pulse is subscription-only, but a free trial can be accessed here.)

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