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Farm bill cuts would include wealthy producers

Trying to tighten the federal budget, the Bush administration Wednesday proposed to reduce farm spending by $18 billion over the next five years.
/ Source: The Associated Press

Thousands of the nation’s richest farmers would lose their government subsidies under a Bush administration plan to curb farm spending.

Proposals released Wednesday would reduce federal agriculture spending by $18 billion over the next five years. They represent President Bush’s vision of a new farm bill: a system of supports that would protect farm income and crop prices and keep food prices stable.

Anyone making more than $200,000 in adjusted gross income would be cut off from farm payments, under Bush’s plan. At that level, “you’re the richest guy in the county,” Deputy Agriculture Secretary Chuck Conner said.

These producers, about 80,000 in all, are among the top 2.3 percent of taxpayers, officials said. It’s hard to know just who would be cut off, said Ken Cook, president of Environmental Working Group, which tracks subsidies. Cook said many high-profile recipients, such as media mogul and CNN founder Ted Turner, probably were cut off in 2002, when Congress imposed the current $2.5 million income cap.

“You end up eliminating absentee owners who have a lot of income they’re trying to shelter in agriculture,” Cook said. “It could be a small-town lawyer or a business executive in Memphis, Tenn., who’s put some money into a cotton plantation.”

For everyone else who is eligible, the ceiling on payments would still be $360,000, and there would still be loopholes allowing some to collect millions of dollars above the limits.

Most payments go to growers of five major crops — corn, soybeans, wheat, rice and cotton.

In all, the plan is not a radical departure from current farm programs, which Democratic leaders and major farm groups have pushed to maintain.

“I believe so strongly in what farmers said,” Agriculture Secretary Mike Johanns said, describing forums he held in dozens of states. “They like the structure of this farm bill, but they have a big vision for the future.”

Some proposals, such as payment limits for the wealthy, are touchy subjects on Capitol Hill.

Another could be a new revenue protection plan. Instead of paying farmers when prices are low, which the subsidy program does, Bush proposes to pay them when revenues drop.

“This safety net will actually work better across commodities to provide a true safety net,” Johanns said.

Corn growers like the concept, but many other farm groups want to keep things as they are.

Many of the changes are designed to fend off trade challenges from other countries; the World Trade Organization in 2005 ruled some cotton subsidies illegal in a case filed by Brazil.

The administration proposes to:

  • Reduce spending on loan programs, which are viewed as more vulnerable to trade challenges.
  • Boost direct payments and offer additional money to farmers for conservation practices.
  • Continue dairy and sugar programs that limit supplies to support prices.
  • Eliminate a prohibition keeping fruits and vegetables from being grown on land eligible for subsidies; double purchases of fruits and vegetables for school lunch and other nutrition programs.
  • Provide $2.1 billion in loan guarantees for plants that make ethanol fuel from wood chips, grasses and feedstocks other than corn and provide $1.6 billion to research non-corn sources of ethanol.

Johanns also promised changes to the Food Stamp program that would make it available to more working poor and elderly people, but he said details must wait until Bush unveils his budget plan next week.

A name change for the program is also in store: “Food and nutrition programs, or something other than food stamps,” Johanns said.

The House Agriculture Committee chairman, Rep. Collin Peterson, D-Minn., said he found some ideas interesting and he would like to pursue them. But, he added, “I don’t agree with everything they are suggesting.”

His Senate counterpart, Democratic Sen. Tom Harkin of Iowa, said the proposal “takes significant steps in the right direction” but nonetheless “falls short of the investment levels needed to reach our nation’s objectives.”

Sen. Craig Thomas, R-Wyo., applauded limiting payments but wants to see more focus on conservation programs.

Wheat, rice and dairy producers and nutrition groups said the ideas were not enough; cotton growers worried about limiting payments.

Groups that represent sugar growers, fruit and vegetable farmers, conservation groups and food companies said the plan was a good first step.

The biggest general interest farm group, American Farm Bureau Federation, said it would study the ideas. The National Corn Growers Association withheld judgment.

Johanns’ plan would cost $87.3 billion over the next five years, not counting food stamps and other nutrition programs, compared with $105 billion spent on farm programs over the past five years.

The current farm bill, written in 2002, expires at the end of this year. Lawmakers are anticipating having fewer dollars for farm programs; Bush has promised to balance the budget within five years, and the Democratic-run Congress is insisting on budget cuts to pay for new spending.