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Posts Tagged ‘subsidies’

California Farmers Benefit Little From Subsidies

Wednesday, August 11th, 2010

The 2008 Farm Bill is full of subsidies designed by congressional Democrats to help farmers through the hard economic times. Although the subsidies have good intentions, experts believe that these subsidies are in fact doing the opposite.

According to information obtained by the Environmental Working Group, California growers who specialized in rice and cotton, or other select crops, were the only producers to benefit from the program.

Experts point out that cotton subsidies have caused a number of farmers to plant cotton even when the demand and prices are low. “The government has decided in their wisdom to encourage production of crops the market doesn’t want,” San Francisco farmers Philip Bowles told the SF Gate. “It must make political sense because it certainly doesn’t make economic sense.”
Economists believe that such actions encourage economic hardships with smaller farms allowing for larger, corporate farms to buy them out.

Most California farmers that grow fruits and vegetables did not receives direct subsidies and those who did received only 48 percent from the government. Subsidies are mainly aimed at grains, cotton, dairy and some specialty crops.

This problem is just one of the many reasons why the House Agriculture Committee is meeting with farmers to plan changes on the current Farm Bill. The committee wants farmers to shape the 2012 Farm Bill to fit the needs of small farms.

“If we can somehow write an intelligent farm bill that’s attuned to the goals of public health and environmental responsibility, we can certainly create a set of incentives that steer agriculture in a more responsible direction,” Professor James McWilliams of Texas State University said.

Hearings are going on around the country before a draft of the bill is prepared.

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Minnesota Farmers Respond to Obama’s Plan

Tuesday, March 10th, 2009

Another state is lashing out against President Obama’s budget. Although there is no way to entirely make everyone happy, each state seems to have their own response to the problem.

Congressional farm leader, Collin Peterson, from Minnesota, is standing up against the announced plan. If the plan would go into play, thousands of Minnesota farms would see a huge portion of their income disappear.

However, at the same time many farmers like Fred Dauer see the importance of the cuts and think it will greatly benefit Minnesota agriculture.

“If you gross over $500,000 you don’t need to get any help from the federal government,” Dauer told Minnesota Public Radio.

Dauer himself does receive some payments from the federal government, but many of his crops including sweet corn, peas and alfalfa do not qualify for subsidy programs.

He pointed out that many of the larger farms use the money from the government to buy more land and slowly squeeze out small farms. This has a huge impact on Minnesota revenue because according to census, most agriculture sales come from small farms.

Others point out that farms, such as soybean farms, that have a revenue of $500,000 ultimately only make $36,000 a year in the long run. That is well below the average income of Americans.

Regardless of the debate to the “proper” solution, few point out that Obama is offering alternatives for farmers to make extra money. His plan includes subsidy payments for “environmental services” including wind turbines and sequestering carbon on the land.

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Lobbyists are Prepared to Fight for Farm Subsidies

Tuesday, March 10th, 2009

Obama - NY Times

Many powerful farm lobbiest are not seeing eye to eye with President Obama after he announced his budget includes a proposal to cut government subsidies to large farms.

President George W. Bush suggested similar ideas but was fought off by the same lobbyists.

Bush planned to limit annual farm subsidy payments to $250,000, and Obama’s plan looks very similar. Obama wants to eliminate one type of subsidy to farms with sales over $500,000. This subsidy is in the form of direct payments.

According to an Agiculture Department spokesman this change would affect 81,000 farms, or 4 percent across the United States.

Rice and cotton farms would be most effected. These large farms are spread across California, Texas and the Southeast.

Many suspect that Republicans who represent cotton and rice will fight hard against this proposal alongside Democrats from the Plain States.

The spokesperson also pointed out that although this is not a good thing for large farms, ultimately medium to small sized farms will see more money coming their way, especially those growing soy beans and corn.

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