Limit Subsidies for Agribusiness

Promises Stalled President Obama's promise is currently stalled:

"Obama will implement a $250,000 [farm commodity] payment limitation so that we help family farmers, not large corporate agribusiness. Obama will close the loopholes that allow megafarms to get around the limits by subdividing their operations into multiple paper corporations." — Blueprint for Change

Source: http://www.barackobama.com/pdf/ObamaBlueprintForChange.pdf

Other promises regarding agriculture.

UPDATES:

Updated: Tuesday, April 14, 2009

Congress stalls limits on farm subsidies

President Barack Obama wants a limit on agricultural payments, but Congress doesn't want to go along.

Obama campaigned on a pledge to limit individual farm payments to $250,000. Obama said that would ensure family farms and not "corporate agribusiness" got the money.

But measures to do just that recently died in committee in both the House and the Senate.

In his budget outline, Obama also proposed a different way to limit farm payments. If a farm had more than $500,000 in gross sales, it wouldn't get payments under Obama's plan.

That didn't get anywhere either. Neither the House nor the Senate included it in the budget outlines passed April 3, 2009.

It is possible that farm payments may come up again this year during the appropriations process. But people who follow agriculture policy said the chances for that are remote.

"I think it may be done for the year," said Otto Doering, a public policy specialist on agriculture at Purdue University. Congress passed a major farm bill last year, and revisiting the question of farm payments would be both complicated and controversial, he said.

"The farm bill was passed last year, and no one wants to touch it again," said Liz Friedlander, a spokeswoman with the National Farmers Union, which opposed the limits for farms with more than $500,000 in gross sales. Some farms of that size still struggle to turn a profit and should not be excluded from payments, she said.

As it stands now, the farm bill covers a five-year period and will expire in 2013. Is it possible we haven't heard the last from the Obama administration on farm subsidies? Sure. But given that Congress has rejected Obama's plans for the 2010 budget, we're rating this one stalled.

Sources:

Thomas, Senate Resolution on the budget , April 3, 2009

Thomas, House Resolution on the budget , April 3, 2009


Updated: Wednesday, April 1, 2009

Farm subsidies get trimmed in Obama budget proposal

President Barack Obama wants to direct federal agriculture subsidies away from "megafarms" and toward small farmers and sustainable agriculture. His 2010 budget proposal includes several ways to do this.

As he stated in the campaign promise above, he wants to limit farm commodity payments so that no one producer would get more than $250,000. But he also wants to stop larger farms from getting any payments. If a farm has more than $500,000 in sales revenue, it wouldn't get payments under Obama's plan. (He phases out the subsidies over three years.)

Obama's plan says these larger farms should replace the lost subsidies by expanding into new green initiatives.

"Large farmers are well positioned to replace those payments with alternate sources of income from emerging markets for environmental services, such as carbon sequestration, renewable energy production, and providing clean air, clean water, and wildlife habitat," his proposal states. "USDA will increase its research and analytical capabilities and conduct government-wide coordination activities to encourage the establishment of markets for these ecosystem services."

Several farming organizations, such as the National Cotton Council, are opposing these changes.

"The president's proposed limit penalizes the farms that are responsible for the majority of food, feed, and fiber production in the United States," Cotton Council chairman Jay Hardwick said in a statement. "According to the 2007 Census of Agriculture, farms with sales of $500,000 or more accounted for almost three-fourths of all agricultural products sold."

A reporter asked Agriculture Secretary Tom Vilsack about the administration's commitment to a $250,000 cap during a news conference on March 31.

"Obviously, this is a process in which Congress has a lot to say about precisely what the priorities ultimately will be and how they're funded," Vilsack said. "We should be open, as we are, to ideas and suggestions that Congress may suggest."

That doesn't sound like a rousing defense of a cap to us, so we will be watching to see what happens to this proposal.

Sources:

White House Office of Management and Budget, 2010 budget outline: Department of Agriculture

National Cotton Council, President’s Budget Undermines Confidence in Farm Policy , Feb. 8, 2009

Chicago Tribune, Farm subsidies are targeted for cut , Feb. 27, 2009


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