Two of the top Democrats on the Senate Agriculture Committee are praising President Obama’s new “honesty in budgeting” approach. But they strongly disagree on the president’s fiscal 2010 budget cuts for farm subsidies.
While Agriculture Committee Chairman Tom Harkin said he welcomed the president’s subsidy proposals, Arkansas Sen. Blanche Lincoln said they “threaten the safety net that enables producers to provide a safe and abundant supply of food and fiber.”
Their comments came as more farm organization leaders criticized the Obama administration’s budget recommendations with some saying growers were being called on to make sacrifices that go far beyond the one-half of 1 percent of the federal budget that is spent on farm program subsidies.
Lincoln, a member of a seventh-generation Arkansas farm family, said she appreciated the president’s efforts to craft a budget that “reduces the deficit while addressing the needs of working families across the country.
“However, the president’s budget would break the contract our federal government made with rural communities in the 2008 farm bill, which was fully paid for,” said Lincoln, chairman of the Production, Income Protection and Price Support Subcommittee of the Agriculture Committee.
“The president has called for shared sacrifice from all sectors of our nation. I believe that production agriculture has already paid that price and then some. We should not threaten the safety net that enables our producers to provide a safe and abundant supply of food and fiber by reopening the farm bill, which was completed less than a year ago.”
The farm bill, Lincoln also noted, is a multi-year contract with growers, which they have been relying upon in making future decisions. “It is unfair and unwise to change the rules before the bill has even been implemented.”
Harkin said the Obama budget proposals call for “tough choices,” but should make wise investments that restore the country’s fiscal health and cut the deficit in half over the first five years.
“President Obama’s budget outline recognizes we need every federal dollar to go where it can do the most good,” he said. “In scrubbing the budget, he has focused on reforming large commodity program payments and the direct Freedom to Farm payments. I welcome his engagement on both of these issues, where I have long sought further reforms.”
Harkin, who hails from the same state — Iowa — as Agriculture Secretary Tom Vilsack and Republican Sen. Charles Grassley, said he would have to analyze the other ag budget proposals as they are unveiled.
“The savings from crop insurance appear large based on all the analysis and work during the farm bill debate on the crop insurance program’s budget, premium subsidies to farmers, and compensation to companies and local agents.”
One of the farm groups urging the president to rethink his farm subsidy proposal was the USA Rice Federation, which represents many of the nation’s rice producers. USA Rice called on the government to stand by the promises it made in the Food, Conservation and Energy Act of 2008.
“The farm bill is less than a year old and not even fully implemented, and already contains cuts in direct payments,” USA Rice leaders said. “Moreover, the regulations to carry out the law’s strict new payment limitations and rules for eligibility, just published on Dec. 29, radically exceed statutory requirements and congressional intent.”
They said the proposals add to a feeling of uncertainty among producers who are already anxious about the economic crisis, the turbulence in commodity prices and production costs, weather-related production losses from the previous year, the ongoing unfair trading practices of foreign competitors, and the threat of a new multilateral trade agreement that threatens to export U.S. agricultural production and jobs to other countries.”
In the fiscal 2010 budget proposal the president announced Feb. 26, Obama is asking Congress to phase out direct payments to farmers with sales revenues of more than $500,000 annually over three years.
The budget language says direct payments currently are “made to even large producers regardless of crop prices, losses or whether the land is still under production. The program was introduced in the 1996 farm bill as a temporary payment scheduled to expire, but was included in the 2002 and 2008 farm bills.
“Large farmers are well-positioned to replace those payments with alternative sources of income from emerging markets for environmental services, such as carbon sequestration, renewable energy production, and providing clean air, clean water, and wildlife habitat,” the proposal said.
Farms with annual sales over $500,000 represented nearly 75 percent of all agricultural production in the United States in the latest Census of Agriculture, the USA Rice leaders said in a statement.
“Proposing to eliminate those farms from the direct payment program effectively puts at risk a majority the food, feed and fiber supply in this country by exposing them to the uncertainties of weather, market swings and financial instability without the safety net that direct payments provide.”
The group said a farm with $500,000 in annual sales could be, on average, a 750-acre rice farm — not a “large agribusiness” by any stretch of the imagination, but rather a typical family farm in the rice-growing regions of the United States. It should also be noted that $500,000 in sales does not translate into $500,000 in farm income, it said.
Leaders of the four organizations representing wheat, corn, sorghum and soybean growers also issued a statement criticizing the administration budget proposals during the Commodity Classic in Grapevine, Texas.
“As the leaders of participant organizations at the 2009 Commodity Classic, which represent almost 90 percent of our nation’s crop area planted, we would like to take this opportunity to reiterate the importance of the farm safety net as written in the 2008 farm bill,” they said.
“Production agriculture is a volatile business, and a workable farm safety net is vital to the security of our industry. The continued production of an abundant, affordable and safe food and feed supply for Americans and all those we export to around the world will be affected if this safety net is changed.”
The groups’ chief executives, all producers, said the small investment in agricultural programs by the federal government provides an “excellent return. The 2008 farm bill also includes many other reforms that will assist farmers in becoming more financially sound. Our organizations look forward to continued work with the Obama administration and Congress to ensure farm program monies are spent wisely.”
The statement was drafted by David Cleavinger, president of the National Association of Wheat Growers; Bob Dickey, president of the National Corn Growers Association; Toby Bostwick, chairman of the National Sorghum Producers; and Johnny Dodson, president of the American Soybean Association.
Besides phasing out direct payments, the administration budget:
• Reduces funding for the Market Access Program.
• Reduces funding for the payment of storage costs of cotton that is put under the Commodity Credit Corp. loan program by the USDA.
• Provides $1.3 billion in loans and grants to increase rural broadband capacity and improve rural telecommunication service.
• Boosts funding for “food safety inspection and assessment and the ability to determine food safety risks.”