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Tuesday, March 31, 2009

Opinion: Obama's Budget Could Cripple Family Farmers

As Originally Posted to the Emporia Gazette

The tough payment-limit restrictions proposed in President Obama’s budget would cripple family farmers already suffering through the current recession. These cuts are coming during the worst economic downturn since the Great Depression — at a time when net farm income is projected to decline 20 percent.

Elimination of $16 billion to the farm safety net is one cut agriculture cannot afford. These proposed cuts would strike at the economic heart of full-time farm families of every sized operation. It would also threaten the viability of hundreds of thousands producers across the country and could further undermine this country’s economy.

The administration’s main proposal is to prohibit subsidies from going to farmers with gross sales higher than $500,000. During a three-year period, the direct payments paid to these farms would be eliminated. This is much tougher than the ’08 farm bill which cut off subsidies to farmers with adjusted gross incomes above $750,000.

The president’s proposed phase out of direct payments based on sales will impact a large percentage of Kansas farms representing a large proportion of total production in the state. Using the 2007 Census of Agriculture, 6-percent of farms in Kansas have sales of more than $500,000. However, these farms represent approximately 78 percent of all farm sales in the state.

Rural communities will suffer with the proposed cuts and phase out of direct payments. These dollars flow back into local communities through debt repayment, donations to churches, local property taxes to support public schools, support of Main Street merchants to buy groceries, shoes for kids, etc.

The farm safety net helps secure America’s food supply, which is all the more vital in hard times. Now is not the time to breach a program that helps farmers feed a hungry planet. Thanks to America's farmers, food availability is one less problem to worry about in this time of uncertainty.

Kansas farmers are especially aggravated by the shifting limits on adjusted gross income to limits on gross sales. These limits do not take into account most farming costs like buying new equipment and other expenses and are not an effective gauge of a farm’s income.

Agricultural producers who are already struggling with farm-related expenses that have increased as much as 40 percent during recent years cannot shoulder additional debt. Deeper cuts in agricultural support would have drastic bottom-line consequences on farm families.

Producers are also annoyed the administration is reopening a debate they believe was just settled. These budget cuts to ag producers threaten once again to change the rules midstream on American farmers and ranchers.

“You don’t change provisions of a farm bill, implemented less than a year ago, that had the support of more than 500 nutrition, conservation and farm organizations,” says Steve Baccus, Ottawa county farmer and president of Kansas Farm Bureau. “The provisions of the ’08 farm bill have not yet been fully implemented. This law must be given time to work before more changes are considered.”

These proposed budget cuts don’t take into consideration that producers and lenders alike have already made long-term business decisions based upon the commitment made by Congress in the five-year farm bill. To fiddle with figures and projections now will only exacerbate the current credit crisis.

Family farmers are vital to Kansas and America’s rural communities as well as this nation’s economy. Most Kansas farms are family-owned and operated. While they share the commitment to deficit reduction, additional cuts to the farm safety net would not be in their best interests or their communities.

The farm safety net now in place constitutes less than one quarter of one percent of the total federal budget and only 16 percent of the total farm bill.

Attempts to balance the budget on the backs of the American farmer, rancher and rural America will do little to balance the budget, and at the same time spell the end for many of these producers.

During the first week of March, approximately 150 Farm Bureau members from across Kansas traveled to Washington, D.C. to express their strong opposition to the more than $16 billion in cuts to the farm safety net proposed in the president’s 2010 budget.