Obama: Cut direct farm payments

SALEM, Ohio — The Washington winds shifted subtly with the release of the Obama administration’s first budget proposal for the U.S. Department of Agriculture.

The president’s fiscal year 2010 budget provides $26 billion for the USDA, which basically matches the agency’s funding in 2008. (Click here for a .pdf of the USDA’s budget proposal.)

The department will also receive $28 billion of the $800 billion stimulus package.

The USDA budget proposal follows the three areas President Barack Obama identified as priorities in his address to Congress Feb. 24: energy, health care, and education.

As with previous years, a huge chunk of the proposed USDA budget targets nutrition assistance and programs for low-income families. The president’s budget would add another $1 billion annually for program reforms that improve access to nutrition programs, enhance school meals, or improve oversight. Roughly two-thirds of the USDA’s budget is for food assistance programs.

Additional funds are earmarked for national forest operations (a $50 million increase), and strong support is continued for conservation programs, including the Environmental Quality Incentives Program, or EQIP, the Conservation Security Program and the Conservation Reserve Program.

Renewables a key

The budget also boosts rural development efforts, specifically for utilities, infrastructure, like broadband capacity, and renewable energy.

Specifically, the president wants to double the country’s supply of renewable energy in the next three years — investing $15 billion in various agencies to develop wind and solar technology; advanced biofuels; clean coal; and more efficient vehicles. He is also seeking legislation that places a market-based cap on carbon pollution.

Payment limitation

But to pay for increases, the USDA budget includes cuts, including a controversial reduction in the commodity program payment limit to $250,000, and to phase out direct payments over three years to farmers with sales revenues of more than $500,000.

The decision could impact many full-time family farmers.

According to the 2007 Census of Agriculture, large family farms (sales between $250,000 and $500,000) and very large family farms (sales over $500,000) make up only 9 percent of all farms, yet they produce more than 63 percent of the value of all agricultural products sold. In Ohio alone, more than 6,300 farms have sales of more than $250,000.

The president would also reduce crop insurance premium subsidies.

Payment limitation efforts are likely to receive a fight, particularly since the leaders of the Senate ag committee are on opposite sides of the battle. Chairman Sen. Tom Harkin, D-Iowa, has long sought reform of the commodity program payment system. Across the aisle, Ranking Minority Member Saxby Chambliss said in his prepared statement of the budget proposal that efforts to cut direct payments “will be met with my strong opposition.”

The announcement comes on the heels of an extension of a comment period for the 2008 farm bill payment limits rule. On Jan. 26, U.S. Agriculture Secretary Tom Vilsack extended the comment period for the program payment limitation and payment eligibility rulemaking process for another 60 days.

The farm bill’s existing rules, however, remain in place for the 2009 crop year.

RC&D cuts

Ohio would also be hit by the elimination of the Resource Conservation and Development (RC&D) program. There are currently nine multi-county RC&D programs operating in Ohio.