Bush Is Said to Seek Sharp Cuts in Subsidy Payments to Farmers
By ROBERT PEAR
Published: February 6, 2005
ASHINGTON, Feb. 5 - 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, including a 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.
Kenneth Cook, president of the Environmental Working Group, a research and advocacy group, said the proposal would reduce payments to big agribusiness operations. The savings, he said, would ease pressure on Congress to cut conservation programs financed in the same legislation.
"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 the 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 payment 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.
By ROBERT PEAR
Published: February 6, 2005
ASHINGTON, Feb. 5 - 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, including a 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.
Kenneth Cook, president of the Environmental Working Group, a research and advocacy group, said the proposal would reduce payments to big agribusiness operations. The savings, he said, would ease pressure on Congress to cut conservation programs financed in the same legislation.
"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 the 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 payment 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.
