The Obama Administration’s first budget proposal, released Thursday, would make sweeping cuts to the farm safety net included in the 2008 Farm Bill.
The $3.6 trillion budget called for, among other things:
• phasing out over a three-year period direct payments to producers with sales revenue of more than $500,000 annually.
• establishing a $250,000 commodity program payment limit.
• reducing crop insurance funds by $5.2 billion over 10 years.
• cutting Market Access Program funds, which are used by the wheat industry and others to promote sales of U.S. products, by 20 percent.
NAWG, other farm organizations and many Members of Congress are concerned about these proposals and their potential effect on production agriculture. These groups have started working together to educate the Administration where necessary and fight back unreasonable proposals.
Though $500,000 dollars in sales sounds like a large amount, it can easily be reached by a family farming operation. Of course no sales figure ensures profit at a time when per bushel input costs remain higher in many areas than commodity prices. And, as NAWG has frequently stressed to policymakers, direct payments are often important elements of an operation’s cash flow, ability to get credit and debt service.
Though farms that exceed the $500,000 in gross revenue account for only 5 percent of the total number of farms counted by USDA, they produce 74 percent of the total gross sales of all farms. USDA defines a farm as an operation with just $1,000 in sales.
For a summary of the proposals, please visit:
http://www.whitehouse.gov/omb/assets/fy2010_new_era/Department_of_Agriculture1.pdf