[env-trinity] Subsidy cuts face hard fight in Congress

[Tom Stokely]

http://www.sacbee.com/content/business/story/12367222p-13223441c.html
 

      
     
             
           
     
     
Move to pare ag support opposed
Subsidy cuts face hard fight in Congress
By Michael Doyle -- Washington Bureau
Published 2:15 am PST Wednesday, February 16, 2005
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WASHINGTON - Legislation planted Tuesday will give the Bush administration a chance to show it's serious about cutting farm subsidies. 
Backed by rural reform and taxpayer advocacy groups, lawmakers introduced what may be a long-shot bid to limit the subsidies provided cotton, rice, wheat and corn growers. If successful, the bill could take a bite out of some big California farms. 

"Farm payments that were originally designed to benefit small-and medium-sized family farmers have contributed to their demise," said Iowa Republican Sen. Chuck Grassley, chairman of the powerful Senate Finance Committee. "Unlimited farm payments are driving many family farmers off the farm." 

The so-called Rural Preservation Act would impose a tough new cap of $250,000 on the subsidies that any one farm could receive. The current putative limit is $360,000. However, farms can obtain more by subdividing into various partnerships, and some forms of payments are exempt from the limits altogether. 

Federal farm payments in California, for instance, include the $1.5 million paid in 2003 to the Los Banos-based SJR Farming, according to a database maintained by the Environmental Working Group. Likewise, the compiled Agriculture Department records show Los Banos-based Wolfsen Land and Cattle Co. received $1.2 million and the Visalia-based C.J. Ritchie Farms received $1 million in 2003. 

Representatives of the three farms could not be reached or declined to comment Tuesday. 

All told, California farms received $672 million in federal commodity subsidies in 2003. Some 210 California farms received more than $360,000 in 2003, the Environmental Working Group database shows, and 428 received more than $250,000. Most grew rice in the Sacramento Valley or cotton in the San Joaquin Valley. 

"I think that cutting agricultural subsidies is OK with me, as I prefer a market-based program," said Fresno County rancher John Harris. "I haven't analyzed specific ideas, but most of the crops we raise are not involved in the subsidy crop sector." 

But by and large, the subsidy limit proposal draws scorn from politically influential farm organizations and their Capitol Hill allies. 

"It negatively impacts farms in California," said Tulare Republican Rep. Devin Nunes, a member of the House Agriculture Committee. 

"What people don't talk about is that a lot of these are small farmers who sell their cotton and who make up their losses through the federal payments." 

Nunes further dismissed the idea as a "cheap trick" that will almost certainly die in Congress, given the steadfast opposition of major farm groups. 

The new legislation would limit to $100,000 the amount of direct payments and counter-cyclical payments a single farmer could receive. 

These are two forms of subsidies, the latter tied to downturns in market prices. The bill also would impose a $150,000 cap on loan deficiency payments and marketing loan gains, which are two other forms of federal support that critics say are currently provided without effective limits. 

The Bush administration last week proposed similar subsidy changes as part of the fiscal 2006 budget proposal. That subsidy proposal, though, came without any of the fanfare or political buildup that usually accompanies the White House's top priorities. It is not yet clear how hard the administration will fight to overcome farmer resistance. 

"The president's budget gives us a lot more impetus," Grassley said, while adding that he would take whatever level of support Bush might choose to offer. 

Bush himself has mentioned the farm subsidy cut once since his budget was released, in a brief reference as part of a speech to Detroit businesspeople. 

In 2002, 66 senators - including California Democrats Dianne Feinstein and Barbara Boxer - voted in favor of subsidy limits similar to those being proposed. Feinstein and Boxer later reversed their positions, though, and the congressional negotiators dropped the proposal. 

"I don't think it will go anywhere," Nunes said. 

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