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U. S. NFU Opposes Subsidy Cuts

The Obama administration should drop its proposal to end the direct payment subsidy to large U. S. farmers, the National Farmers Union said March 9, pointing to a slump in dairy and crop prices.

The White House proposal has few supporters among farming groups and farm-state legislators. It calls for a three-year phase-out of direct payments to grain, cotton and soybean growers who have more than $500,000 a year in sales.

Delegates at the NFU convention in suburban Washington adopted language opposing any change in the 2008 farm law, still being implemented, and asking Congress to oppose cuts in direct payments.

Created in 2002, direct payments total $5.2 billion a year and are made regardless of prices. There are 126,000 farms in the category.

The administration says large operators “are well positioned to replace these payments with alternate sources of income from emerging markets for environmental services such as carbon sequestration, renewable energy production and providing clean air, clean water and wildlife habitat.”

“It’s more than dead on arrival,” said House Agriculture Committee chairman Collin Peterson, Minnesota Democrat.

Senate Agriculture Committee chairman Tom Harkin, Iowa Democrat, has spoken against the proposal, as did the chairman of the Senate Budget Committee, North Dakota Democrat Kent Conrad.

The two most direct routes to curtail direct payments go through the Agriculture and Budget Committee. Opposition by committee leaders makes success doubtful.

Two Senate backers of subsidy reforms, Iowa Republican Charles Grassley and Minnesota Democrat Amy Klobuchar, told the NFU convention that they opposed the White House proposal on direct payments.

Besides the proposal on direct payments, the White House proposed a limit of $250,000 for all subsidy payments to farmers, elimination of cotton storage payments and cuts on crop insurance subsidies.

NFU delegates also called for:

A higher payment rate in the Milk Income Loss Contract subsidy to offset this year’s plunge in milk prices.

Low-interest and emergency loans, including a foreclosure mitigation program, to help farmers weather the economic recession.

An increase in the ethanol-to-gasoline blend rate, now set at 10 per cent.

A ban on meat packers raising livestock in competition with farmers.

Provisions to create agricultural offset programs in a mandatory carbon emission cap-and-trade system to reduce greenhouse gases. Obama administration officials say farmers could earn money under a cap-and-trade system by adapting their operations to lock carbon in the soil.

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