New budget plan calls for cuts to farmers

www.farmweeknow.com
2010-02-02

President Barack Obama asked Congress on Monday to slash crop subsidies and to pare federal support for crop insurance, moves estimated to save $10 billion over 10 years. Obama targeted those areas for large cuts last year without success.

In his proposed budget for fiscal 2011, Obama suggested a sharply lower cut-off in income that qualifies for crop supports, implemented over a three-year period. It would save $2.26 billion over 10 years.

The administration plan would end crop subsidies to people with more than $250,000 adjusted gross income from off-farm sources or more than $500,000 on-farm AGI. The caps now are set at $500,000 off-farm AGI and $750,000 on-farm AGI.

"It is Congress's job to write the annual budget, and based on my conversations with House Leadership, no one is interested in making cuts to the Farm Bill after the battle we just fought to pass it a year and a half ago," said House Agriculture Committee chairman Collin Peterson."

There was no immediate estimate of how many people would be affected by the White House proposal. Out of 2.2 million farms, the U.S. Agriculture Department estimates 120,000 farms have sales above $500,000 a year.

Some $8 billion would be saved over 10 years by reforming administration of the federally subsidized crop insurance system to end "huge windfall profits." USDA is negotiating a new master agreement with insurers to reduce overhead payments.


Return to Article List