Farm subsidy cuts proposed again by White House

Washington-President Obama’s plan to cut farm subsidies by eliminating direct payments to farmers with annual revenues of more than $500,000 (GM March 9, p. 12) drew fire from farm groups and some lawmakers last week when the proposal was included with 120 other programs designed to cut $17 billion in spending over the next year. The proposed cuts, outlined in a 131-page document released by the White House on May 7, were included in the president’s $3.6 trillion budget request for fiscal 2010. The administration says the farm subsidy cuts to large farmers will save $9.8 billion over 10 years, while total federal payments to farmers would be cut by some $15 million through fiscal 2019. The additional savings would be gleaned by capping the amount of subsidies that any one person can collect at $250,000 per year, by reducing subsidies for crop insurance and overseas marketing assistance, and by eliminating payments for cotton storage. When the subsidy cuts were first proposed in February, farm groups voiced strong opposition, claiming the $500,000 threshold would unintentionally include too many average producers. According to statistics provided by the American Farm Bureau Federation in March, a typical soybean farmer that posts $500,000 in sales will make only $36,000 in profits because margins are being squeezed by high fertilizer, fuel, and other input costs. Some proponents of the subsidy reform cited a recent poll conducted by Worldpublicopinion.org, an international collaborative project managed by the University of Maryland, which found that 61 percent of Americans currently oppose most farm subsidies, 77 percent are in favor of providing subsidies to farms of 500 acres or less, and only 15 percent support taxpayer subsidies to large farms on a regular yearly basis. Lawmakers earlier this year rejected both a proposal to limit subsidies to individual farmers at $250,000 total and a proposal to eliminate subsidies to producers with an adjusted gross income of $250,000.