Hill bud­get cut­ters are keen on chop­ping farm sub­si­dies

The Washington Times Weekly - - Politics - BY CLAIRE COURCHANE

For bud­get hawks, fed­eral farm­sub­sidy pro­grams have long been a huge but elu­sive tar­get, but crit­ics say the time might fi­nally be right to reap a har­vest of sav­ings by cut­ting pay­ments to farm­ers as lawmakers gear up for a mas­sive fight next year on a new long-term farm bill.

The fed­eral deficit cri­sis, com­bined with a new class of House GOP lawmakers who have shown a will­ing­ness to at­tack sa­cred spend­ing cows through­out the bud­get, has changed the equa­tion on Capi­tol Hill.

“It has be­come im­pos­si­ble to jus­tify these pro­grams,” said Rep. Ron Kind, Wis­con­sin Demo­crat, “es­pe­cially right now, with record-high com­mod­ity prices.”

A study by the an­ti­sub­sidy En­vi­ron­men­tal Work­ing Group puts the to­tal pay­ments to farm­ers from dozens of pro­grams at $260 bil­lion since 1995, and even se­nior House Repub­li­cans such as Ma­jor­ity Leader Eric Can­tor of Vir­ginia have cited farm pro­gram cuts as a po­ten­tial area of

with

the

White agree­ment House.

“This farm bill is go­ing to be one where the bud­get will dic­tate pol­icy,” pre­dicted Na­tional Cot­ton Coun­cil Vice Pres­i­dent Gary Adams, ac­cord­ing to a re­port in the Delta Farm Press.

It may sound like a fa­mil­iar tune. Farm sub­si­dies, many dat­ing back to the Great De­pres­sion, have been crit­i­cized for years as pro­grams that ben­e­fit rel­a­tively few farm­ers but cost tax­pay­ers bil­lions of dol­lars, pay­ing out in both good and bad crop years. But po­lit­i­cally, cut­ting farm pay­ments has proven an up­hill strug­gle.

The con­ser­va­tive Amer­i­can En­ter­prise In­sti­tute, in a study re­leased July 12, says the gov­ern­ment could save $100 bil­lion over 10 years with­out af­fect­ing the nation’s food sup­ply or the vi­a­bil­ity of U.S. agri­cul­ture. The study also crit­i­cizes the di­rect­pay­ments pro­gram, a per-acre pay­ment given to farm­ers and landown­ers that costs tax­pay­ers $5 bil­lion a year.

“In the cur­rent fis­cal en­vi­ron­ment, spend­ing sub­stan­tial fed­eral funds on farm pro­grams that have no real eco­nomic or equity jus­ti­fi­ca­tion is highly prob­lem­atic,” the AEI re­port says.

Barry Good­win, one of the study’s au­thors, at­tacked a num­ber of ar­gu­ments used to de­fend farm pay­ments, con­tend­ing that farms do well as busi­nesses and the rate of farm fail­ures is “very, very low.”

“Farm house­holds tend to be much wealth­ier than non­farm house­holds by a con­sid­er­able amount. And this has been shown over and over again,” Mr. Good­win said.

The build­ing de­bate of the next farm bill, which must be passed in 2012, is far from Congress’ first at­tempt to strip sub­si­dies. Repub­li­cans in the mid1990s launched an am­bi­tious drive to wean farm­ers from guar­an­teed crop sub­si­dies and other fed­eral pro­grams, with very lim­ited suc­cess.

“We tried to move away from farm pro­grams in the mid-’90s, and peo­ple were will­ing to sign on to that since the com­mod­ity prices of farm prod­ucts were pretty good,” said Bruce Jones, an agri­cul­tural econ­o­mist at the Univer­sity of Wis­con­sin. “Re­ver­sal of mar­ket con­di­tions led to the price of grains fall­ing, and then farm­ers started hurt­ing.”

The new study calls for elim­i­nat­ing di­rect pay­ments and sub­si­dies for crop in­surance and disas­ter aid, a slash­ing of pro­grams that trou­bles pow­er­ful agri­cul­tural lob­bies. Mary Kay Thatcher, a spokes­woman for the Amer­i­can Farm Bu­reau Fed­er­a­tion, said lawmakers should not be mis­led by the cur­rent strength of the agri­cul­tural econ­omy into think­ing it’s time for sub­sidy cuts.

“When prices go up, they al­ways go back down,” Ms. Thatcher said. “The rea­son we write a farm bill is for the bad years.”

Ms. Thatcher added that al­though most farm­ers would not feel an im­me­di­ate hit from los­ing sub­si­dies, that would change as food prices and mar­kets fluc­tu­ate.

Gary Si­p­i­orski, an agri­cul­tural econ­o­mist at Vita Plus, a Wis­con­sin-based firm that works with live­stock and agri­cul­tural pro­duc­ers, said that al­though sub­si­dies were only 1 per­cent to 5 per­cent of most farms’ gross in­come per year, they can be sig­nif­i­cant dur­ing times of need.

But Mr. Kind said the push to re­duce fed­eral farm sub­si­dies is “long over­due,”

“I couldn’t think of a bet­ter time [to] fo­cus on this for bud­get sav­ings.” he said. “So I hope we don’t let this mo­ment pass.”

ASSOCIATED PRESS

Fed­eral sub­si­dies for farm­ers are cited by bud­get-cut­ters on Capi­tol Hill as a po­ten­tial area of agree­ment with the White House. The sub­si­dies cost tax­pay­ers bil­lions of dol­lars a year. “It has be­come im­pos­si­ble to jus­tify these pro­grams,” said Rep. Ron Kind, Wis­con­sin Demo­crat.

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