Posted on 02/06/2005 7:38:25 PM PST by Aussie Dasher
AUSTRALIA has been quick to welcome news that US President George W. Bush will unveil sharp cuts in previously sacrosanct farm subsidies when he releases his 2006 Budget later in the day.
"This is very welcome news and we obviously support the proposal of the Bush administration to significantly limit the level of subsidy to farm production in the United States," Trade Minister Mark Vaile said. Australia last year signed a free trade agreement with the United States which was strongly criticised by some in the country's powerful farm industry for not going far enough to protect Australian agricultural interests.
Mr Vaile said Mr Bush's planned subsidy cuts, revealed over the weekend by The New York Times, would result in "a significant cut in overproduction of agricultural products in the United States" and ease downward pressures on world agricultural prices.
The newspaper quoted Bush administration officials said some 5.7 billion US dollars would be cut from farm subsidies over a decade in a bid to cut an overall budget deficit predicted to hit a record 427 billion dollars this year.
Mr Vaile claimed that in addition to the US budget problems, Australia's negotiations during the recent free trade talks played a role in bringing about the cuts in aid to US farmers.
"As a result of negotiations, (there is) a commitment to reduce the level of subsidy and so either way, it's very very positive news for the Australian farming community," he told the ABC.
The head of the Australian National Farmers Federation, Peter Corish, said many Australian crops would benefit from the US move.
"Particularly cotton, wheat, barley, corn, soya beans for example will all benefit – it will certainly add to our competitiveness longer term," he told the ABC.
Dubya, you're a champion!!!
Sam Donaldson is deeply saddened
Any type of subsidies is an affront to the free-market system.
Great news -- if it comes to pass. But the next time a few politicians want to win the Iowa caucus, watch what happens.
That's well said -- I totally agree.
Newt Gingrich promised to end farm subsidies 10 years ago...
and they've just gotten bigger!
I don't understand any of this?? I thought our govt was paying farmers to "NOT" plant crops. If you are saying we over plant then what is this subsidy and who is getting it? Are these crops being harvested by migrant workers from Mexico??
Sorry, I'm just confused here.
All I know is, under this plan, every American will experience the joy of enjoying Australian produce at a much more reasonable price.
| Rank | Recipient* | Location | Total USDA - Subsidies 1995-2003 |
| 1 | Riceland Foods Inc | Stuttgart, AR 72160 | $519,191,315 |
| 2 | Producers Rice Mill Inc | Stuttgart, AR 72160 | $288,614,747 |
| 3 | Farmers Rice Coop | Sacramento, CA 95851 | $134,309,556 |
| 4 | Cenex Harvest States Cooperatives | Brandon, SD 57005 | $40,763,897 |
| 5 | Tyler Farms | Helena, AR 72342 | $37,010,598 |
| 6 | Dnrc Trust Land Management - Exem | Helena, MT 59620 | $29,025,894 |
| 7 | 1st National Bank Sioux Falls-sep | Sioux Falls, SD 57101 | $27,168,554 |
| 8 | Pilgrim's Pride Corporation | Pittsburg, TX 75686 | $26,461,206 |
| 9 | Missouri Delta Farms | Sikeston, MO 63801 | $25,328,080 |
| 10 | Ducks Unlimited Inc | Rancho Cordova, CA 95670 | $20,391,397 |
| 11 | Mt Board Of Investments - Sep | Billings, MT 59115 | $18,799,886 |
| 12 | Cargill Turkey Products | Harrisonburg, VA 22801 | $17,593,150 |
| 13 | J G Boswell Co | Corcoran, CA 93212 | $17,290,870 |
| 14 | Bureau Of Indian Affairs | Horton, KS 66439 | $15,173,963 |
| 15 | Mcnutt Bros Dairy | Dublin, TX 76446 | $13,514,404 |
| 16 | Morgan Farms | Cleveland, MS 38732 | $12,268,540 |
| 17 | Due West | Glendora, MS 38928 | $12,072,379 |
| 18 | Dublin Farms | Corcoran, CA 93212 | $11,913,936 |
| 19 | Napi | Farmington, NM 87499 | $11,749,291 |
| 20 | Wolfsen Land & Cattle Co | Los Banos, CA 93635 | $11,491,136 |
| 21 | Colorado River Indian Tribes Farm | Parker, AZ 85344 | $11,105,388 |
| 22 | E And V Farms | Poplar Grove, AR 72374 | $10,106,247 |
| 23 | Perthshire Farms | Gunnison, MS 38746 | $10,053,760 |
| 24 | Walker Place | Danville, IL 61832 | $9,800,761 |
| 25 | Bruton Farms Partnership | Hollandale, MS 38748 | $9,553,184 |
| 26 | Tackett Farms | Schlater, MS 38952 | $9,472,020 |
| 27 | Dixie Farms | Vance, MS 38964 | $9,287,221 |
| 28 | State Of Washdnr | Ellensburg, WA 98926 | $9,191,338 |
| 29 | R Gorrill Ranch Enterprises | Durham, CA 95938 | $9,135,028 |
| 30 | Hansen Ranches A Pts | Corcoran, CA 93212 | $8,616,787 |
| 31 | Omega Plantations | Tunica, MS 38676 | $8,399,394 |
| 32 | Mitchener Pltg Co | Sumner, MS 38957 | $8,382,250 |
| 33 | Soudan Farming Co | Marianna, AR 72360 | $8,286,228 |
| 34 | Rodgers Farms | Belzoni, MS 39038 | $8,278,618 |
| 35 | C J Ritchie Farms | Visalia, CA 93291 | $8,225,657 |
| 36 | Buttonwillow Land And Cattle Co | Buttonwillow, CA 93206 | $8,135,045 |
| 37 | Kelley Enterprises-a-tn Prtnershp | Burlison, TN 38015 | $8,074,427 |
| 38 | Starrh & Starrh Ctn Growers | Shafter, CA 93263 | $7,991,530 |
| 39 | New Hope Farms | Schlater, MS 38952 | $7,922,506 |
| 40 | Gila River Farms | Sacaton, AZ 85247 | $7,856,072 |
Hopefully it will bring down the price of groceries for the average family.
WOW, thanks for the help folks. This subsidy cutting is great. Newt must of had it right!
I don't know how we got into that mess in the first place but this looks like a step in the right direction.
Yes, interesting to see those figures, which pretty much confirm what I've heard.
It might be possible to justify some sort of limited subsidies for family farms, but a policy that encourages large agribusinesses to get even larger is in nobody's interest.
The obvious solution would be to put a lid on the size of the subsidy to any one person or corporation. But I don't expect major reform of these farm programs anytime soon. It's been tried before.
I'll wait to hear what the word from the heartland will be when they find this out. Farm subsidies is just another term for welfare. I reckon this to be on the level of saying he'll end the 'wet foot-dry foot'policy for Cubans.
The heartland will go crazy if this ever goes through, though I doubt it will.
It's not going to happen.
It won't. If it goes through you can say goodbye to the family farm and rural America as we know it. Basically it would mean the only employment is the factory farm of agri-biz and fast food.
There'd be no more reason for Paul Harvey's ADM commercials. It'd be a monopoly.
agri-biz is all publically traded. you'd still get the ads. What I'd imagine would happen is that without the subsidies the price of farmland drops, the corporations come in and buy it for dimes on the dollar. I've heard of isolated cases where this is happening with bankers. The farmers go out and the bankers or consortiums of dentists move in as "gentleman farmers."
Bush Is Said to Seek Deep Cuts in Farm and Commodity Programs
By Robert Pear / New York Times
President Bush will seek deep cuts in farm and commodity programs in his new budget and in a major policy shift will propose overall limits on subsidy payments to farmers, administration officials said Saturday.
Such limits would help reduce the federal budget deficit and would inject market forces into the farm economy, the officials said.
The proposal puts Mr. Bush at odds with some of his most ardent supporters in the rural South, including cotton and rice growers in Alabama, Arkansas, Georgia, Louisiana and Mississippi.
The new chairman of the Senate Appropriations Committee, Thad Cochran of Mississippi, and more than 100 farm groups are gearing up to fight the White House proposal. The administration's willingness to push the proposal, despite such protests, suggests how tight the new budget will be.
Most of the subsidies are paid to large farm operators growing cotton and rice and, to a lesser degree, corn, soybeans and wheat.
Mr. Bush would set a firm overall limit of $250,000 on subsidies that can now exceed $1 million in some cases.
The proposal comes as the administration is seeking significant changes in other programs long considered sacrosanct, with the proposed revamping of Social Security to allow personal investment accounts and a move to shake up the Civil Service system.
Mr. Bush's farm proposal found support from some people who frequently criticize his policies.
For example, Kenneth Cook, president of the Environmental Working Group, a research and advocacy group, said that it would reduce payments to large agribusiness operations and that the savings would reduce pressure on Congress to cut conservation programs.
"This proposal is a very big deal," Mr. Cook said. "I am stunned and impressed. The Bush administration is opening the door to reform on the most contested issue in agriculture policy today. Taxpayers will no longer have to subsidize every bushel of grain or bale of cotton. They will no longer have to subsidize the demise of the family farm."
In the past, when Congress considered limits on payments, Mr. Cook said, the administration took no position. The Senate approved a $275,000 limit in 2002 but dropped it in negotiations with the House.
Agriculture Department officials said Mr. Bush's proposals would cut federal payments to farmers by $587 million, or about 5 percent, next year and would save $5.7 billion in the coming decade. The officials spoke on condition of anonymity because they did not want to upstage release of the president's budget, scheduled for Monday.
The budget includes other proposals intended to produce large savings in farm programs, the officials said, but they refused to give details.
In theory, the maximum payment to a farmer, through multiple entities, is now $360,000 a year. But Keith J. Collins, chief economist at the Agriculture Department, said that growers had found many legal ways to get around the limit and that some growers received several times that amount. One type of aid, which involves marketing assistance loans, is not subject to any limit, he said.
In setting a firm overall limit of $250,000, the president's plan would tighten requirements for the recipients of such payments to be "actively engaged" in agriculture, and it would generally prevent farmers from claiming additional payments through multiple entities.
Farm subsidies have been a major issue in global trade talks, as poor farmers in the developing world demand that the United States and other wealthy countries cut back subsidies for their domestic producers.
Efforts to cap farm payments have produced odd alliances. Fiscal conservatives like the Heritage Foundation have joined some environmental groups and family farmers in the Midwest in supporting stricter limits. Opponents include the American Farm Bureau Federation. the nation's largest farm organization, as well as many commodity groups and politicians of both parties from rice and cotton states.
Mr. Cochran, the former chairman of the Senate Agriculture Committee, said he would "work as hard as I can to oppose any changes" in current payments limits, set by Congress three years ago.
Speaking this week to the National Cotton Council, a trade group, Mr. Cochran said he knew that some people wanted to reduce farm program payments.
"We always know there is a threat to lower levels of payments to producers from some in the Congress," he said. But, he added, the payments are economically important to rural communities, and "the risk caused by changing payment limits far outweighs the benefits."
In a letter to Mike Johanns, the new secretary of agriculture, a coalition of more than 100 farm groups said they too would resist such cuts.
"With prices for many major commodities falling sharply from last year, reductions to farm programs would come at precisely the time that these supports are most needed in rural America," the coalition said.
The White House proposal is a vindication of sorts for Senator Charles E. Grassley, Republican of Iowa, who has advocated "reasonable payment limits" for three decades.
"When 10 percent of the nation's farmers receive 60 percent of the payments, it erodes public confidence in federal farm programs," said Mr. Grassley, who describes himself as the only family farmer in the Senate. "Unlimited farm payments have placed upward pressure on land prices and contributed to overproduction and lower commodity prices, driving many family farmers off the farm."
Mr. Collins, the Agriculture Department economist, said, "When the government subsidizes every bushel and every acre, it encourages large farm operations to grow larger."
Subsidy payments take several forms and are computed according to complex formulas that take account of "base acres," "target prices" and other factors. In some cases, the government makes direct payments to farmers. In others, it lends money to farmers and assures them, in effect, that they can receive more than the market price for their crops, if that price declines.
In a report last year, the Government Accountability Office, an investigative arm of Congress, said farmers used many "schemes or devices" to circumvent existing payment limits. Under federal law, payments are supposed to go only to people who are "actively engaged in farming," but, the report said, many people not involved in farm operations have received large subsidies.
Moreover, it said, individuals who on their own could receive no more than $180,000 for a farming operation sometimes set up a partnership composed of three partners, each of whom receives $180,000 in subsidies, thus tripling the total amount of payments to the farming operation. A federal advisory commission, said many of the largest farms had changed their business structure to "avoid payment limits."
An exhaustive study by the Agriculture Department found that "government payments increase with farm size and sales," so "payments tend to be concentrated among the larger farms." In 2001, it said, "59 percent of government payments went to producers on farms with a net worth of $600,000 or more." But, it added, about one-third of all farms receive commodity subsidies, and the "government payments often make a significant contribution to farm income, regardless of the farm's size."
Senator Blanche Lincoln, Democrat of Arkansas, said payment limits would be particularly unfair to rice and cotton farmers because production costs were higher for those crops than for others.
Mrs. Lincoln, the daughter of a rice farmer, said some farmers would have difficulty surviving under stringent payment limits.
But Brian M. Riedl, an economist at the conservative Heritage Foundation, said stricter payment limits were needed because farm subsidies had become "America's largest corporate welfare program."
These changes have to be made. It will turn the program from subsiding the demise of the family farm to actually supporting the family farm.
Please explain, I'm really anxious to understand this issue.
Nice of Bush to stick it to the people who put him in office.
I wish Bush actually cared about Americans more than: Mexicans, EUro-peons,and now Australians.
His act is wearing thin, and is going to put their friends,the Clintons, back in the White House.
Search around the many articles at the Heritage Foundation.
http://www.heritage.org
There's a lot of articles in 2002 when they passed the last farm bill.
Big agribusiness got Bush elected? Read what Bush is actually proposing.
I wanted to know what someone from a rural community thought of it, not the Heritage Foundation.
Best explanation of subsidies is in PJ O'Rourke's book "Parliament of Whores." Has a whole chapter on it.
In general people think the government giving them money is swell, in all parts of the country.
That's the main problem.
Hey, don't look at me, I'm from NYC. On average NY gets about 80 cents back from the Federal gov't for every dollar we put in...I did get a tax refund once.
Is he leaving alone small farmers?
Small farmers don't get much subsidy money in the first place.
there's a lot of wealthy farmers out there.
This might help you..
Sixty percent of all farmers and ranchers do not collect government subsidy payments, according to USDA, mostly because the crops and livestock they produce do not qualify for subsidy programs (see state breakdown). Among subsidy recipients, large farms collect almost all the money. Nationwide, ten percent of the biggest (and often most profitable) subsidized crop producers collected 72 percent of all subsidies, averaging $34,424 in annual payments between 1995 and 2003. The bottom 80 percent of the recipients saw only $768 on average per year.
http://www.ewg.org/farm/region.php?fips=00000
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