News from the Tennessee Valley Business

Southern farmers OK with House’s subsidy legislation

By Ben Evans
Associated Press Writer

WASHINGTON — As Congress prepared to take up a new farm bill earlier this year, prospects for Southern growers looked bleak.

President Bush had proposed slashing the number of farmers eligible for government help. Midwesterners touting corn as a national wonder-crop had taken over the agriculture committees in the House and Senate.

Even the most enthusiastic backers of federal subsidies were acknowledging that budget cuts were inevitable, with top Southern crops like cotton, rice and peanuts squarely on the chopping block.

But after months of lobbying and negotiation, Southern farm groups are grudgingly satisfied with the legislation that passed the House last month. The region may yet see cuts as action moves to the Senate, but lawmakers so far appear inclined to continue the complex system of commodity supports that has treated Southern agriculture well over the years.

‘It could have been worse’

“Not everybody is happy ... but it could have been a lot worse,” Keith Gray, director of national affairs for the Alabama Farmers Federation, said of the House bill.

Lawmakers from the South historically have been among the most aggressive defenders of commodity payments, arguing that the region’s major cash crops are expensive to grow and therefore particularly vulnerable without a government safety net.

According to a June report from the Congressional Research Service, rice, cotton and peanuts received the highest per-acre payments of any crop during the past three years, getting triple or more what cheaper-to-grow crops like corn get per acre.

So even though corn is more widely grown and accounts for a bigger overall share of payments nationally, farmers growing rice, cotton and peanuts are more sensitive to changes.

“When you look at reducing total payments, it impacts those guys much quicker,” said Kurt Guidry, an agriculture economist at Louisiana State University.

As debate on the farm bill began, momentum appeared to be growing to scale back the commodity payments, which in recent years totaled some $11 billion annually.

With high crop prices in some sectors and reports of wealthy landowners getting million-dollar subsidies, critics called for “rebalancing” spending on specialty crops, conservation and renewable energy.

In January, the Bush administration proposed eliminating payments for farmers making more than $200,000 in adjusted gross income, down from the existing cap of $2.5 million. A group of House “reformers” called for phasing out the program altogether.

What emerged in the House, however, mostly continues the status quo.

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Save $84.50 a year off our newsstand price:
Subscribe today for only 38 cents a day!

Leave feedback
on this or

Email This Page