Des Moines Register
02/07/06
Farm spending cuts sought again
But getting $1.1 billion in subsidy reductions approved in an election year
won't be easy.
By PHILIP BRASHER
REGISTER WASHINGTON BUREAU
Washington, D.C. — President Bush is resurrecting proposed cuts in farm
spending that Congress soundly rejected last year.
Crop subsidy cuts would total $1.1 billion for 2007, down nearly 6 percent from
what the government plans to spend this year.
The reductions include a 5 percent, across-the-board cut in payments to farmers
who produce grain, cotton and milk, and a new $250,000 limit on the subsidies
that any individual can receive.
Few Iowa farms would be affected by the $250,000 cap on individual payments,
but the 5 percent reduction in crop payments would be another matter: Corn and
soybean growers in Iowa received about $1.5 billion in federal subsidies on their
2004 crops.
Agriculture Secretary Mike Johanns said farmers need to help lower the federal
budget deficit. Their subsidies "have by and large been spared from deficit
reduction," he said Monday.
But winning congressional approval for the cuts will be even tougher this year
than it was in 2005, given that all of the House of Representatives and a third of
the Senate are up for election this fall.
"It's not clear to me that this really has any legs at all," said Bruce Babcock,
director of Iowa State University's Center for Agricultural and Rural
Development. "To tell you the truth, it's not very creative policy, either."
The $250,000 cap on individual payments has strong support in Iowa and mirrors
a proposal developed by Sen. Charles Grassley, R-Ia.
However, Southern lawmakers strongly oppose the $250,000 limit because it
would fall hardest on the region's large cotton farms. Last year, the Senate
defeated a similar proposal, 53-46.
The chairman of the Senate Agriculture Committee, Saxby Chambliss, R-Ga.,
said the president's proposed cuts in farm subsidies "once again unfairly target
agriculture. I expect Congress to reject them again."
Mary Kay Thatcher, an American Farm Bureau Federation lobbyist, said farm
groups should be able to block the payment limit at least until next year, when
farm programs come up for renewal.
Under existing law, payments are theoretically capped at $360,000 per person,
but loopholes allow farmers and landowners to collect some subsidies in
unlimited amounts.
Bush also is proposing to reduce crop insurance subsidies. The cut would not
kick in until 2008 but would save taxpayers $1.26 billion during the next decade.
The White House argued that farmers can handle cuts in subsidies after having
three years of strong income, due in part to relatively high prices for livestock.
Corn and soybean farmers have benefited from several years of good weather
and government payments that have compensated for the decline in market
prices that followed the large harvests.
But Thatcher said farm subsidies should not be cut while the Bush administration
is negotiating at the World Trade Organization for global reductions in agricultural
subsidies and tariffs.
"If we give up some of our domestic support programs, all that means is we have
less leverage to get other countries to bring down their tariffs," she said.
Iowa Sen. Tom Harkin, senior Democrat on the Agriculture Committee, said the
president did not propose enough spending for conservation programs and rural
development. "This budget once again confirms that the Bush administration's
rhetoric about farmers and rural America does not match its actions," he said.
The White House proposed spending $4 billion on conservation programs in
2007, up from $3.8 billion this year. Most of that increase would come from
adding 250,000 acres to the Wetlands Reserve Program, pushing the enrollment
to 2.2 million acres.
The size of the Agriculture Department budget is driven in part by demand for
federal nutrition programs, including food stamps and school lunches, and
swings in commodity prices, which determine the size of farm subsidies.
This year's budget is expected to total $95.7 billion, up from $85.3 billion last
year. Based on Agriculture Department projections, the budget would fall to
$92.8 billion in 2007 were Congress to accept the administration's proposals.