July 17, 2011

Farmers worry about effect of subsidy cuts

WASHINGTON — Farm groups are rushing to save government subsidies they've long received.

WASHINGTON — Farm groups are rushing to save government subsidies they've long received.

President Obama and lawmakers have targeted $30 billion or more in agriculture spending cuts as they try to negotiate a deficit-reduction deal.

Farmers say they know they will have to take a hit. But they fear too many cuts will send booming crop prices into a dive, raising the potential for another 1980s-era farm crisis.

Budget negotiators are looking at three pots of agriculture money:

* Direct payments, which are subsidies that farmers get regardless of what they grow

* Crop insurance, which helps farmers in the event of losses

* Conservation money, which pays farmers to protect environmentally sensitive land

As happens every five years when Congress renews a farm bill, lobbyists and lawmakers from farming states are fighting to save their piece of the pie. Now it's just happening a little earlier, and largely out of public view, as Washington tries to find a way to raise the nation's debt limit and cut spending before the government defaults on some payments Aug. 2.

A new farm bill isn't due until next year but could be pushed up if lawmakers are forced to find immediate savings. A budget deal could dictate the terms of the cuts or leave it up to the congressional agriculture committees.

The chairman of the House Agriculture Committee, Rep. Frank Lucas, R-Okla., says he hopes negotiators will tell lawmakers exactly how much they want cut from the farm budget and let the agriculture committees hash out the details.

Negotiators are looking at reductions of $30 billion to $35 billion over 10 years, which amounts to a more than a 15 percent cut from the three programs.

"If they give us an absolute number, we will meet that number," Lucas said. "But don't make major policy decisions on the back of a piece of yellow paper or a napkin at the White House rural America and production agriculture have to live with."

Rep. Collin Peterson of Minnesota, the top Democrat on the committee, says such large cuts would make it almost impossible for Congress to write a new farm bill and figure out how to protect producers from a downturn. "It's a mess is what it is," he said.

As rice and cotton groups have pushed back, negotiators have discussed making fewer cuts from direct payment programs and cutting deeper from crop insurance or conservation programs.

Midwestern corn and soybean farmers generally depend on crop insurance more than Southerners do, and lawmakers and groups that represent that region are fighting for direct payment cuts instead of crop insurance cuts.

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