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Mixed reaction greets Obama's USDA budget proposals

Agriculture.com Staff 02/02/2010 @ 9:26am

The Obama administration found a bit of support across the aisle for part of its USDA budget proposals Tuesday. Senator Chuck Grassley of Iowa, the ranking Republican on the Finance Committee, said he wasn't sure he liked a proposal to lower the payment limit on direct payments from $40,000 to $30,000, but he's more inclined to support another idea, lowering eligibility for all farm program payments to individuals with adjusted gross income from farming of $500,000 or less. Currently the AGI cap is $750,000.

Grassley told reporters Tuesday that when it comes to lowering the cap on direct payments, "I haven't studied the impact of that. I think it could be a negative. But it's very much a positive on trying to tighten up payments to higher income people."

Grassley added that "the President proposes and Congress disposes," a reminder that many ideas coming from the White House don't survive when Congress puts together the budget, no matter which party is in power.

Grassley also had doubts about the Obama administration's plan to save $8 billion over 10 years by reducing the reimbursement to crop insurance companies.

"I'm not saying some money can't be saved, but the policy I support is that we maintain a private sector (delivery of insurance)," he said. Grassley said he wants to make sure that private delivery remains a reliable system. He doesn’t want to go back to having USDA in charge of all compensation to farmers for weather losses. "I think we've been successful at having 92% of Iowa farmers signed up. I want to maintain that."

Obama is likely to find opposition to some USDA cuts from his own party. Senator Blanche Lincoln (D-AR), chairman of the Senate Agriculture Committee has already said she will "oppose cuts to programs important to agriculture and rural communities."

"Put simply the President's proposal picks winners and losers," Lincoln said in a statement released Monday. "By targeting policies that rural America relies upon, this proposal places a disproportionate burden on the backs of farmers and rural communities. While I too believe we must reduce the federal deficit, we must all share in this responsibility."

"In 2008 I worked hard to pass a five-year farm bill that was fiscally responsible. This bill contained over $4 billion worth of cuts to farm programs, was completely paid for and did not contribute to the deficit," she added. "The Farm Bill is a contract with our farmers that they depend on to make business decisions. Changing the rules in the middle of the game would be detrimental to their operations and would cost us even more jobs in rural America."

The budget proposals are also drawing opposition from farm groups. The American Soybean Association said Monday that it's disappointed in proposals to cut farm programs and eligibility for payments, as well as a proposed reduction the the Market Access Program, which supports export promotion.

National Farmers Union opposes cutting as much from crop insurance as the administration proposes but it supports its plan to increase funding for research.

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