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Bigger U.S. subsidy cuts considered

Congress could slash U.S. farm subsidies far more than expected, perhaps by twice as much as proposed two months ago, to help trim the federal deficit, Agriculture Secretary Tom Vilsack said Jan. 8.

“It could be $23 billion. It could be $48 billion. It could be $33 billion,” Vilsack said on the sidelines of the annual meeting of the six million-member American Farm Bureau Federation (AFBF).

AFBF president Bob Stallman also told reporters there was strong pressure to cut agriculture spending. Vilsack and Stallman said budget pressures will make it hard to write a new farm law this year despite a Sept. 30. deadline.

A cut amounting to $48 billion would be about five per cent of farm bill funding, and twice the $23 billion suggested by Agriculture Committee leaders last fall.

The White House has suggested $33 billion in cuts. Republicans in the U.S. House voted for $48 billion last spring.

Crop subsidies and conservation payments are expected to bear the brunt of cuts. A chief target is the $5-billion-a-year “direct payment” subsidy to grain, cotton and soybean farmers.

There is no consensus on a new farm law. Some proposals would end crop subsidies created during the Depression era.

While crop subsidies are the headline issue, three-quarters of Agriculture Department money is spent on food stamps and other nutrition aid to the poor.

Convention delegates were to vote this week on a proposal by Farm Bureau leaders to end most existing crop subsidies and to create an insurance-like program in its place. It would assure growers of getting 70-80 per cent of their usual crop revenue.

Large cuts to traditional farm subsidies could make federal crop insurance the primary shield for growers against steep losses.

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