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Peterson: Ag subsidy cuts excessive

The Republican head of the House Budget Committee, Rep. Paul Ryan, R-Wis., may find opposition from his own party regarding the cutback of agriculture subsidies by $30 billion over the next 10 years. He’s also meeting opposition from fellow House members such as Seventh District U.S. Rep. Collin Peterson, a DFLer from Detroit Lakes.

Rep. Frank Lucas, R-Okla., chairman of the House Agriculture Committee, said, “Members of the House Agriculture Committee and I will write the next farm bill.”

Peterson said Monday that President Barack Obama’s deficit commission called for $10 billion in savings from farm programs over 10 years.

“That’s something people can live with,” said Peterson. “However, there’s no justification for a $30 billion cut. Overall, we’re talking about a 25 percent cut for ag, and we’re not seeing 25 percent cuts to other parts of the budget bill.”

Ryan has proposed cutting $30 billion over 10 years by spending less on a crop subsidy program called direct payments and giving smaller subsidies to crop insurance. Direct payments were already expected to be a major target in the 2012 farm bill. That farm bill will cover the years from 2013 to 2018.

Leon Johnson, county executive director for FSA West Otter Tail County, said he is not aware of a specific bill that could affect ag insurance and direct payments.

“All programs are being looked into for possible cuts and insurance,” said Johnson, “and direct payments have been mentioned.”

Peterson said that agricultural bills also include food stamps and conservation issues. In future months, he said it will be difficult to see reconciliation between House and Senate agricultural versions.

The $3.5 trillion budget plan put forward by Ryan has grabbed headlines, according to the Associated Press, because of its proposed revamps of Medicare and Medicaid and its tax cuts. Political analysts say the bill awaits a floor vote in the House, and has no chance in the Democratic controlled Senate.

The 72-page report laying out Ryan’s plan said crop prices and deficits are both hitting new highs. It noted that net farm income this year is forecast to hit the second-highest total in 35 years, and that farmers’ five most profitable years in the last 35 have all been in the past decade.

Peterson formerly chaired the U.S. House Agriculture Committee when his party controlled the legislative body. He said the current bill includes loan rates with an effective safety net and a program that provides help when it’s needed most.

“This also allows farmers to make decisions based on the market while providing protection when prices are low,” he said.

The Associated Press said that farmers who sign up for direct payments get them regardless of how much they grow or what happens to crop prices in any given year. The fixed per-acre payments are based on a farm’s historic production of eligible crops, such as corn.

Ryan’s plan leaves the details of how to achieve those savings up to Lucas’ committee and presumes the changes won’t take effect until the next five-year farm bill, which Lucas plans to write next year.

Said American Farm Bureau Federation President Bob Stallman, “It’s vital that decisions to cut farm program spending be made with a recognition of the cyclical nature of our farm economy and its ties to a global economy that can be even more volatile.”