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Posts Tagged ‘farm subsidies’
Friday, April 20th, 2012
According to a study authored by Iowa State University economist Bruce Babcock and commissioned by the Environmental Working Group, a government takeover of crop insurance programs could save taxpayers billions of dollars over the next several years.
With the decline of popular support for direct payment farm subsidies, crop insurance programs have taken center stage in Washington. As part of their agreement to drop support for direct payments, farm lobbyists from across the agricultural industry insisted that crop insurance be strengthened to protect farmers’ revenues and reinforce the farm safety net.
Current crop insurance programs rely on private insurers, with the federal government subsidizes up to 60 percent of the premiums that farmers pay to these companies. According to Babcock, these subsidies have led insurers to offer a wide variety of policies, protecting farmers against everything from natural disasters to a drop in corn prices. Since 60 percent of the costs are covered, many farmers have been eager to sign up for as many policies as possible.
The reliance on private corporations has also led to corruption, Babcock argued, with private insurers pocketing exorbitant fees. Overall, private crop insurance programs will cost taxpayers more than $90 billion over the next decade.
Babcock’s solution to this problem is a federalized crop insurance system that is free to farmers. His proposed crop insurance program would cover the risk of a poor harvest. If a harvest fell below 70 percent of average yields, the government would pay full market prices for any additional losses. This program, Babcock argues, would cost between $6 billion and $18 billion less than current programs, depending on the number of participants.
To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting www.farmloans.com.
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Written by: Justin Ellison / Farm Plus Staff Writer
Tags: crop insurance, direct payments, farm bill, farm subsidies
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Tuesday, April 17th, 2012
No-till farming advocates say that their revolutionary farming techniques could provide American agriculture with an environmentally friendly method of crop production.
Tilling fields to remove weeds, create furrows for irrigation, and shape the soil into rows for crop planting is the traditional method of crop preparation in the United States. However, this technique also leads to several less than favorable results, including the loss of organic matter, the death or disruption of soil microbes, and soil erosion.
Beginning in the 1940s, agricultural scientists began experimenting with new herbicides and farm chemicals in order to plant and harvest crops without the need for tilling.
No-till advocates believe that eliminating tilling can make farms more efficient and profitable. Less tillage reduces labor requirements, fuel costs, irrigation needs, and wear and tear on farm machinery. In addition, eliminating tillage can lead to less erosion and higher water infiltration and storage capacity.
In addition to economic benefits, no-till farming has been linked to a reduction in carbon emissions. Soil tilled by farm machinery mixes air into organic material, leading to dramatic increase in microbial activity and a rapid breakdown of organic matter. When broken down, this matter releases carbon into the atmosphere, increasing carbon dioxide levels and contributing to global warming.
Currently about 35 percent of American crops are grown using no-till methods. The U.S. Department of Agriculture currently offers subsidies for cover crops seeds and specialized equipment.
To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting www.farmloans.com.
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Written by: Justin Ellison / Farm Plus Staff Writer
Tags: farm subsidies, no-till farming, sustainable agriculture
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Sunday, April 15th, 2012
A recent report by congressional auditors suggests that limiting farm subsidies available to large-scale farmers could save taxpayers billions of dollars.
With the federal budget deficit continuing to rise and with politicians on both sides of the aisle clamoring for austerity cuts, taxpayer and representatives have targeted farm subsidies, looking for ways to reduce farm spending without undermining agricultural production. Farmers and politicians have already agreed to eliminate direct payment subsidies, a decades-long farm support staple, in exchange for increase crop insurance funding.
The latest congressional report could limit access to crop insurance support, however. By reducing the amount of money paid to farmers to offset the cost of crop insurance premiums, the government could save up to $1 billion a year. Under the current system, farmers buy private insurance, but the federal government covers up to 62 percent of the premiums.
Some politicians and political activists have already suggested capping crop insurance support at $40,000 in an attempt to limit wealthy, large-scale farmers’ ability to receive unlimited government support.
While few expect politicians to limit access to crop insurance in the current election year, the program’s increasing costs are sure to place it at the center of the political stage in the next few years. Already, crop insurance costs have exploded from $1.2 billion in 2000 to $7.3 billion in 2011. Expected costs over the next four years could reach $40 billion.
To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting www.farmloans.com.
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Written by: Justin Ellison / Farm Plus Staff Writer
Tags: budget deficit, crop insurance, farm bill, farm subsidies
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Sunday, April 15th, 2012
Across Kansas, real estate developers are exploiting tax loopholes from the 1980s to claim property as agricultural, saving them money on tax liability and costing state taxpayer millions of dollars in lost revenue.
In the 1980s, Kansas lawmakers attempted to offer farmers a much needed tax break, particularly farmers who owned land near rapidly developing suburban communities whose real estate values were skyrocketing. A law was passed giving agricultural land a significant property tax credit in order to offset rising land values and help struggling farmers.
While the legislation was only intended for actual farms committed to agricultural production, the law was written broadly enough to allow non-agricultural groups to benefit from the tax breaks. A 1989 court ruling found that the developer’s intention for the property did not matter, the success of the agricultural use did not matter, and overall profits did not matter. Given the broadness of the bill, the court refused to narrow its ruling to exclude land not devoted to agriculture.
As a result, land developers holding onto valuable property can toss out some seeds or plant a tree, claim their land is being used for agricultural purposes, and reap the benefits. In the most extreme cases, property worth millions of dollars is appraised for agricultural use for less than $100.
Developers maintain that they are not breaking the law and that any resident would take advantage of legitimate tax breaks in this economy. In addition, they argue that increased taxes would only be passed onto consumers in the form of higher prices for goods and services. Others say that taxpayers are subsidizing these developers and that the misuses of farm subsidies and agricultural tax breaks could lead to tension between farmers and taxpayers and could undermine future farm subsidies.
To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting www.farmloans.com.
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Written by: Justin Ellison / Farm Plus Staff Writer
Tags: farm subsidies, kansas, property tax
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Sunday, April 15th, 2012
Colorado Senator Michael Bennet and Representative Cory Gardner recently spoke out on the farm bill, agricultural labor policies, and farm subsidies.
In the latest farm bill hearing, held on the Campus of the University of Northern Colorado in Greeley, Colorado, Senator Bennet promised farmers that a new farm bill would be passed by the end of September. For the past several months, with politicians focused on the upcoming presidential election, farmers and ranchers have worried that a new farm bill would not be passed by the expiration of the current bill.
Bennet, a member of the Senate Agriculture Committee, told farmers that his colleagues were planning on introducing new farm legislation by the early summer in order to have a new bill in place by the end of 2012.
Bennet also tried to reassure farmers that his colleagues in the Senate were capable of working together to pass vital legislation. In light of the unusually heated atmosphere on Capitol Hill, many farmers are worried that politicians are more interested in scoring cheap political points than working together to address the needs of the farm community. Given the fact that Republicans and Democrats in the Senate have already agreed on $23 billion in agricultural spending cuts, Bennet believes that the Senate will be able to do its job by September.
In addition to the farm bill, Congressman Cory Gardner recent spoke about agricultural labor laws, addressing a recent ruling by the Department of Labor, which would limit the ability of minors to work agricultural jobs. Gardner criticized the Labor Department’s ruling as “screwy,” stating, “Our children, especially the next generation of agriculture need experience and there are so few experienced individuals in production agriculture today they may or may not be able to get it from their parents. We shouldn’t restrict them from getting an experience in agriculture just because it’s not their parent’s farm or ranch.”
To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting www.farmloans.com.
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Written by: Justin Ellison / Farm Plus Staff Writer
Tags: farm bill, farm subsidies, Michael Bennet
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Friday, April 13th, 2012
With the 2008 Farm Bill set to expire in a few months, Congress is rushing to pass a new set of agricultural legislation. According to Senator Chuck Grassley, the window for a new bill is rapidly closing. If legislation is not passed by August, Grassley said, a new bill for 2012 was unlikely.
Renewed every five years, the provisions of the current farm bill are set to expire at the end of September. If they expire without a new bill being passed (or without being temporarily extended), then a 1949 bill would automatically take effect, requiring farmers to severely limit planting, and requiring the government to spend billions of dollars in direct payments. While politicians in Congress are promising a new bill by September, they have also promised that they will not allow the ‘49 bill to go back into effect.
Grassley and others, however, are not optimistic that a new bill will be passed. According to Grassley, “If it doesn’t get done by August the 5th I don’t think it’s going to be done. It has to be done sometime this summer or you’re going to have to extend the existing farm bill because farmers need to know what next year’s program is.” According to a member of the Food and Agriculture Policy Research Institute at the University of Missouri, “There are a lot of things that would have to fall right for the bill to get all the way through the process and be signed this year. There are too many things that could go wrong between here and there.”
To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting www.farmloans.com.
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Written by: Justin Ellison / Farm Plus Staff Writer
Tags: chuck grassley, farm bill, farm subsidies
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Sunday, April 8th, 2012
Indiana Senator Dick Lugar recently reintroduced stalled legislation that would significantly reduce federal funding for the Supplemental Nutritional Assistance Program, collectively known as Food Stamps.
The Food Stamp program, along with several other federal nutritional programs, is one of the largest parts of the 2008 Farm Bill. Over half of farm bill funding goes to nutritional programs, which include traditional programs like Food Stamps, as well as those dedicated to improving local nutrition by encouraging consumption of locally grown produce.
As Congress debates reducing agricultural spending to help address the growing budget deficit, Democrats and Republicans are both targeting these nutritional programs. Senator Lugar’s legislation would significantly reduce Food Stamps funding, eliminating $40 billion from farm subsidy and nutritional programs. To put this in perspective, in 2010, the Food Stamp program distributed $63 billion of nutritional aid.
According to some analysts, this reduction would significantly cut access to nutritional aid. According to the Heartland Health Alliance Chief Nutritional Strategist, “A legislative plan by Senator Lugar to cut federal food stamp spending alone by $14 billion over 10 years as part of the 2012 Farm Bill reauthorization would eliminate nutrition assistance to more than 74,000 Illinois residents, of which more than 15,000 would be in Chicago.” Given that significant portions of Chicago’s population, along with countless urban and rural areas across the country, already encounter difficulties finding adequate, nutritional food, this elimination could be devastating to many low-income families.
To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting www.farmloans.com.
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Written by: Justin Ellison / Farm Plus Staff Writer
Tags: Dick Lugar, farm bill, farm subsidies, Food Stamps
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Friday, April 6th, 2012
A broad coalition of advocacy groups, ranging from farm organizations, commodity groups, environmental movements, and clean energy lobbyists, have petitioned Congress to include ample funding for renewable energy programs in the 2012 Farm Bill.
Over 100 organizations, representing a broad cross-section of American political life, urged Congress to continue funding over 37 renewable energy programs that are set to expire in September, when the current provisions of the 2008 Farm Bill end. The problem that these programs face, energy advocates say, is that unlike other farm programs, they are not connected to mandatory funding baselines. This means that in order to continue funding these programs, Congress will need to offset their costs with cuts from other sectors.
Given the current pressure to cut several billion dollars from the agricultural budget, many environmentalists are worried that Congress will be unable to find the political will to continue funding vital, but relatively obscure energy programs.
In a statement by National Farmers Union president Roger Johnson, “Renewable energy is a tremendous opportunity to help our rural communities thrive by providing them with additional sources of income. These programs are vital not only to rural America, but they also provide us with a clean, homegrown fuel that helps America become more energy independent, which is critical for national security. These programs need our support.”
To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting www.farmloans.com.
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Written by: Justin Ellison / Farm Plus Staff Writer
Tags: farm bill, farm subsidies, renewable energy
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Sunday, April 1st, 2012
Farmers from six states recently urged Congress to take action on passing a new farm bill in order to avoid the expiration of critically important federal farm programs.
The current farm bill, passed in 2008, expires at the end of September, leaving Congress only six months to pass a new set of farm legislation. While the House and Senate could simply renew current farm policy, farmers are adamant that a new bill be passed so that they can adequately plan and preparing their individual operations.
According to one Alabama farmer, ““It is critically important to provide certainty to those of us involved in production agriculture since we make long-term investment decisions based on federal farm policy.”
Complicating an already contentious issue is the upcoming 2012 election. In addition to involving a presidential race, one third of the Senate and all House seats are up for reelection. Several members of the Senate Agriculture Committee, including chairwoman Debbie Stabenow, will be fighting to maintain their seats in addition while simultaneously passing vital farm legislation. Given the acrimonious debates in Congress over the last two years, many farmers are suspicious that political can keep these two goals from overlapping.
At the latest public farm bill hearing, hosted by Arkansas State University, farmers expressed the urgency of passing a new bill and voiced their concerns at losing access to direct payment subsidies. The farmers who testified were adamant that crop insurance needed to be strengthened in order to replace the lost direct payments.
To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting www.farmloans.com.
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Written by: Justin Ellison / Farm Plus Staff Writer
Tags: crop insurance, farm bill, farm subsidies
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Sunday, April 1st, 2012
Montana Senator Max Baucus recently unveiled a new crop insurance program designed to take the place of direct payment farm subsidies.
Direct payments have been a major part of American agricultural policy for nearly 20 years. First introduced in the 1990s, direct payments were critical to farmers who encountered record low commodity prices. Direct payments cost taxpayers almost $5 billion last year.
Current high crop prices and record farm incomes have soured voters on direct payments. As part of the current farm bill negotiations, politicians have indicated that other farm support programs will replace direct payments. Farmers have indicated a willingness to eliminate these subsidies in exchange for strengthened crop insurance programs.
“They understand the budget crunch we are facing, and they are ready and willing to chip in their fair share,” Baucus said. “But they aren’t willing to shoulder the burden for the rest of the country — and I’m fighting to make sure they don’t have to. It’s not an easy fight, but it’s one I think we can win.”
The Revenue Loss Assistance Program recently proposed by Senator Baucus would supplement current crop insurance programs and would be triggered by losses due to weather, markets, or low quality harvests. In addition, the triggering mechanisms would be farm specific rather than region specific (as many current programs are). Farmers are optimistic that these programs will be beneficial, but are still worried about the future of these programs and the farm bill as a whole.
To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting www.farmloans.com.
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Written by: Justin Ellison / Farm Plus Staff Writer
Tags: crop insurance, farm subsidies, max baucus
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