Obama budget reduces pay to farmers
The Commercial Appeal (Memphis, TN), Bartholomew Sullivan
Published February 27, 2009
The Memphis-based National Cotton Council said Thursday that President Barack Obama
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's agriculture budget plan to limit direct payments to farmers is "extremely troubling" and that its cotton-specific provisions fail to heed recent developments.
The 2010 budget, released Thursday, calls for a $250,000 commodity program payment limit to "help ensure that payments are made to those who most need them."
It also eliminates cotton storage credits and reduces overseas brand promotion, to which the NCC also objected in a statement.
But longtime critics of the cotton subsidy program hailed the budget provisions as a the right step. The Bush administration had recommended caps based on income back in 2005, and some income limitations were placed in the 2008 farm bill.
In Ames, Iowa, Craig Cox, Midwest vice president of the Washinton-based Environmental Working Group, one of the harshest critics of farm subsidies, said the Obama
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plan appears to be "a significant and welcome step in the right direction."
"The Environmental Working Group has advocated for years that we reform our farm subsidy programs to assure that taxpayer support is going to working farmers and ranchers who really need this support to stay on the land," said Cox, a former deputy undersecretary for natural resources at the U.S. Department of Agriculture. "Our research . has indicated that a large portion of this taxpayer support has been going to very large farms and very wealthy landowners and, in fact, individuals who, frankly, weren't farming or ranching."
The NCC said that Obama
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's USDA budget proposal fails to recognize the work recently completed under the 2008 farm bill, passed over President Bush's veto. It said the means tests on adjusted gross income and program eligibility in that bill are only now being implemented and that their full impact "is not yet known."
The president's USDA budget phases out direct payments over three years to farmers with sales of more than $500,000 a year. The budget message says direct payments are made based on acreage, sometimes to large producers, regardless of crop prices. It says the direct payments based on acreage were introduced in 1996 and were intended to expire but were made part of both the 2002 and 2008 farm bills.
The NCC said the president's proposal "penalizes the farms that are responsible for the majority of food feed, and fiber production" in the United States.
The Obama
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USDA budget fully funds the nutrition plan for Women, Infants and Children and provides loans and grants to increase rural broadband. But it reduces crop insurance premium subsidies as "not ... a sound value to taxpayers."
And funding for overseas brand promotion would be cut 20 percent, which the NCC said was "confounding."
On the cotton storage credits, the Obama administration
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maintains that paying the storage costs of cotton put under loan with USDA allows farmers to keep it stored "longer than necessary."
It says the credit has a "negative impact on the amount of cotton on the market."
But NCC chairman Jay Hardwick said the move is short-sighted.
"Unlike other commodities, baled cotton lint is an identity-preserved product that requires off-farm storage in (Commodity Credit Corp.) -approved facilities," he said.
