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Southern farmers so far dodge cuts as Congress renews farm bill
WASHINGTON (AP)--As Congress prepared to take up a new farm bill earlier this year, prospects for Southern growers looked bleak. President Bush had proposed slashing the number of farmers eligible for government help. Midwesterners touting corn as a national wonder-crop had taken over the agriculture committees in the House and Senate. Even the most enthusiastic backers of federal subsidies were acknowledging that budget cuts were inevitable, with top Southern crops like cotton, rice and peanuts squarely on the chopping block. But after months of lobbying and negotiation, Southern farm groups are grudgingly satisfied with the legislation that passed the House last month. The region may yet see cuts as action moves to the Senate, but lawmakers so far appear inclined to continue the complex system of commodity supports that has treated Southern agriculture well over the years. "Not everybody is happy--but it could have been a lot worse," Keith Gray, director of national affairs for the Alabama Farmers Federation, said of the House bill. Lawmakers from the South historically have been among the most aggressive defenders of commodity payments, arguing that the region's major cash crops are expensive to grow and therefore particularly vulnerable without a government safety net. According to a June report from the Congressional Research Service, rice, cotton and peanuts received the highest per-acre payments of any crop over the past three years, getting triple or more what cheaper-to-grow crops like corn get per acre. So even though corn is more widely grown and accounts for a bigger overall share of payments nationally, farmers growing rice, cotton and peanuts are more sensitive to changes. "When you look at reducing total payments, it impacts those guys much quicker," said Kurt Guidry, an agriculture economist at Louisiana State University. As debate on the farm bill began, momentum appeared to be growing to scale back the commodity payments, which in recent years totaled some $11 billion annually. With high crop prices in some sectors and reports of wealthy landowners getting million-dollar subsidies, critics called for "rebalancing" spending on specialty crops, conservation and renewable energy. In January, the Bush administration proposed eliminating payments for farmers making more than $200,000 in adjusted gross income, down from the existing cap of $2.5 million. A group of House "reformers" called for phasing out the program altogether. What emerged in the House, however, mostly continues the status quo. Under Agriculture Committee Chairman Collin Peterson, D-MN, the House left payment rates for most crops stable while lowering the income eligibility cap to $1 million, which agriculture economists say will affect only the very largest operations. The bill made only minor adjustments to the maximum payment limits for individual farmers. But it does eliminate the "three entity rule" that has allowed some farmers to far exceed the current $180,000 limit by forming multiple farm businesses to receive extra checks. Depending on what loopholes emerge, that change could lower subsidies for some Southern farmers, particularly cotton and rice, Guidry and other economists said. But overall, "the House version of the bill doesn't really change anything for the Southern farms," said Stanley Fletcher, an agriculture economist at the University of Georgia. "Everything was based on the current program." Fletcher and others are quick to point out that the bill isn't finished, and leading Democrats such as House Speaker Nancy Pelosi, D-CA, and Senate Agriculture Committee Chairman Tom Harkin, D-IA, have said they want to see tighter payment limits in the final bill. "We can't afford to settle for an extension of the status quo," Harkin said recently. But just as critics ran into stiff opposition in the House, many farm-state senators are lining up to block cuts, beginning with Saxby Chambliss of Georgia, the top Republican on the Senate committee. "First and foremost, we are going to craft legislation that creates a real safety net for our farmers and ranchers," Chambliss said. "It is my hope that the bill will be philosophically similar to the 2002 farm bill." Date: 9/21/07
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