Home / Farm Management / Farm Programs & Policies / Farm policy / Washington to cut subsidies

Washington to cut subsidies

DANIEL LOOKER 11/17/2011 @ 3:07pm Business Editor

They mean it this time. Cuts to subsidies for commodity crops are virtually certain, even if the exact new farm programs haven't been hammered out by the congressional agriculture committees charged with writing a new farm bill.

By Thanksgiving, the 12-member Joint Select Committee on Deficit Reduction must show how it will cut more than $1 trillion from the deficit over 10 years.

At press time, agriculture was likely to contribute just over $20 billion to that in Congress. And three major groups battled to influence the 12 deficit cutters known as the Super Committee: farm and commodity groups, conservation and wildlife groups, and supporters of spending on food stamps and other nutrition programs for the poor.

They're not one big happy family.

Most Republicans in Congress want bigger cuts in general, with nutrition programs paying for a share of them. One of their top goals is avoiding any more cuts to federal subsidies for crop insurance.

To protect their programs, conservation and nutrition groups want to end or reduce direct payments, limit payments from any new commodity program to modest-size farms, and tie crop insurance to conservation compliance rules.

The nonfarm critics

Even before the October 14 deadline for members of Congress to submit ideas to the Super Committee, serious farm bill proposals were being written.

The Congressional Research Service looked at a dozen of them and broke them into four categories: minor policy changes, revised revenue programs, enhanced crop insurance, and other ideas such as going back to a Farmer-Owned Reserve and acreage set-asides.

To get a feel for how activists outside of farm country view all this, consider the way the Environmental Working Group (EWG) describes some of the new ideas.

Here's how David DeGennaro, a former staffer for Representative Ron Kind (D-WI) who now works for EWG, describes revenue programs proposed by the American Soybean Association and the National Corn Growers Association: “The plans proposed by the Soybean Association and Corn Growers would set a revenue guarantee for each participating farmer. They want a new government program to supplement existing crop and revenue insurance. The guarantee would be based on the five-year rolling average income, meaning that for most crops, the program would start out guaranteeing the record income levels of the last five years. If a farmer's revenue should fall back down to a more normal historical average, he or she could triple-dip by making decent money in the marketplace, collecting crop insurance, and cashing in on the new revenue guarantee.

“The audacity of these proposals would be breathtaking if they had come from any other industry,” he adds.

DeGennaro contends that when commodity groups say they'll give up direct payments, which cost about $5 billion a year, “they are striving to shift most or all of the money for direct payments into some other, less obviously unfair and wasteful program.”

CancelPost Comment

Vice-President Xi Likes the "Cutting Subsidies" id 03/09/2012 @ 9:40am The Chinese Vice-President and "Heir Apparent" for the Presidential Post was in Iowa as part of his "China Promo" tour. He oozed 'Family Values', Love of the Farming Life, Hospitality, etc., IF he could be one of this years bevy of Presidential Candidates, he might even be a front runner. On top of all that great PR, he penned an order for about $4 Billion worth of Iowa Soy-why thanks, Mr Xi. But every step and stop on his trek across the US, he also made a point of declaring what a good thing getting rid of subsidies would be, how that would open up Markets and "level the playing field." Sounds like this is something the Chinese REALLY want. That, in and of itself, ought to be a compelling reason for leaving the subsidies in place.

Report Abuse Reply

Yield Exclusion Can Boost Your APH By: 01/18/2016 @ 10:26am If you farm in a region that’s been hammered by years of drought – or maybe too much rain –…

Farmers Business Network Announces New… By: 12/17/2015 @ 2:42pm Farmers Business Network, Inc., (FBN) a rapidly growing data sharing and analysis service for…

Silver Linings in EPA Ruling for RFS By: 12/04/2015 @ 4:20pm The EPA’s final blending mandates for biofuels announced Monday are already affecting corn…

This container should display a .swf file. If not, you may need to upgrade your Flash player.
Ageless Iron TV: Tractors at War