Boom Times on the Farm Fuel Drive to Cut Agriculture Subsidies

Boom Times on the Farm Fuel Drive to Cut Agriculture Subsidies

Record U.S. agricultural profits are
making crop subsidies a prime target for deficit reduction as
the process of writing a new farm bill begins with lawmakers and
divided rural interest groups battling over the size and shape
of the cuts.
Net farm income reached a record $98.1 billion in 2011, the
Department of Agriculture said this week. Officials ranging from
Republican House Budget Committee Chairman Paul Ryan and
President Barack Obama to the leaders of both congressional
agriculture committees have recommended cuts to farm programs of
up to $48 billion over 10 years as a way to help lower a deficit
projected at $1.33 trillion this year.
“There’s just no way that farm organizations can argue
there’s a needs-basis” for subsidies that are as generous as in
the past, Earl Pomeroy, a former Democratic congressman from
North Dakota and member of the House Agriculture Committee, said
earlier this month.
Farm subsidies predicted to reach $11 billion in 2012 will
be under scrutiny today as the Senate Agriculture Committee
holds its first hearing on a new five-year farm bill. The
legislation would authorize spending for all USDA programs,
including the subsidies, which encourage production and lower
commodity costs for Cargill Inc. and Archer Daniels Midland Co.
The current farm bill, passed in 2008, expires Sept. 30.

Obama Plan

Organizations including the American Farm Bureau
Federation, the largest U.S. farmer group, have already said
that subsidies will probably decline. President Barack Obama, in
the budget he released this week, proposed $32 billion in
reductions over 10 years by lowering crop insurance and
environmental-conservation payments and ending a program that
pays farmers regardless of crop prices. The average prices of
corn, wheat and soybeans traded in Chicago all were records last
year.
House Agriculture Committee Chairman Frank Lucas, a
Republican from Oklahoma, criticized Obama’s plan, saying it
“shows a lack of perspective and understanding in how
agriculture can realistically contribute” to deficit reduction.
Last year, in tandem with the failed congressional
“supercommittee” effort to rein in federal spending, the top
Republicans and Democrats on the House and Senate farm panels
crafted a plan to cut no more than $23 billion in spending over
10 years.

Certainty Called For

Farm groups say they want certainty in farm programs so
their members can make business decisions. Last week, 82
agriculture, environmental and other organizations ranging from
the League of Rural Voters to the Evangelical Lutheran Church in
America wrote a letter to congressional and farm-panel leaders,
calling for Congress to “aggressively act to ensure that a new,
comprehensive farm bill is passed this year.”
Rural prosperity should make it easier to reduce aid to
growers of corn, soybeans and other crops, Agriculture Secretary
Tom Vilsack told reporters this week.
The good times in farm country — the USDA projects profits
will total $91.7 billion this year — that make cuts more
possible may also work against a bill being approved this year,
Pomeroy said.
With this year’s congressional calendar crowded with a
legislation including a payroll-tax extension and federal
budget, farmers may be pushed to the side, Pomeroy said. Should
debates over these measures become drawn-out, the clock will run
out on any farm bill before lawmakers leave town to campaign for
the November elections, he said.

Supercommittee’s Failure

Senator Debbie Stabenow, the Michigan Democrat who leads
that chamber’s agriculture committee, said after the
supercommittee failure that the subsidy-cut plan that emerged
could form the basis of a new farm bill. The goal, she said
yesterday in an e-mail, is to “make sure we’re getting the most
out of every dollar but not undercutting critical programs that
sustain our national food system.” Quick passage is a “top
priority,” she said.
The committee’s own makeup may make that difficult, said
Robert Thompson, a senior fellow at the Chicago Council of
Global Affairs and a former World Bank farm projects director.
The Senate Agriculture Committee, led by Democrats,
includes seven current or former farm-panel chairmen and a
former U.S. agriculture secretary. On the House side, more than
half of the Republicans on the farm panel are first-term members
elected in the 2010 wave of Tea Party supporters who seek to
reduce government spending. House Democrats include advocates of
agribusiness, a former organic farmer and champions of foreign
nutrition aid and food stamps.

Tea Party

“Agriculture in this country needs to recognize that the
era of subsidies is phasing down,” said Representative Reid
Ribble of Wisconsin, a first-term Republican associated with the
Tea Party who is a member of the House Agriculture Committee.
Deficit reduction and government regulation are bigger concerns
for the farmers in his dairy-heavy district than are subsidies,
he said yesterday in a telephone interview.
“Agriculture is very complicated,” said Representative
Marlin Stutzman, a Republican Agriculture Committee member from
Indiana who was elected in 2010. “You’re really trying to wrap
your head around this, but I think the farmers themselves are
willing to take a new direction,” said Stutzman, who co-owns a
4,000-acre farm.
Lawmakers in farm states will have to unite to get a bill
through Congress, said Mary Kay Thatcher, chief lobbyist with
the Washington-based American Farm Bureau Federation.

Death by Cuts

“This isn’t a situation where every group will be able to
do what it wants and get what it wants,” Thatcher said. Unless
lobbyists and lawmakers can agree on a plan, agriculture will
face “death by a thousand cuts” once current law expires,
leaving farm programs to limp along under temporary extensions
that will probably include cuts, she said.
Pomeroy, the former North Dakota congressman, said a farm
bill could pass Congress this year should the more-experienced
Senate farm panel take the lead, then use passage in that
chamber as pressure on the House to get a deficit-reducing deal
done during an election year.
Delaying doesn’t do anyone any good, said Thompson. The
one-time World Bank official puts the odds of a farm bill
passing Congress this year at less than 30 percent.
“It would be nice if something actually happened,” he
said. “But I’m not holding my breath.’