Defict plan would cut farm supports by 10 percent

WASHINGTON (BestGrowthStock) – U.S. farm supports would be cut 10 percent under a proposal made on Wednesday by a presidential panel on balancing the budget, but the plan would not force idled cropland back into production.

The commission recommended cuts in agriculture as part of government-wide belt-tightening to balance the budget. Commission members planned a vote on the plan on Friday.

Their plan called for a net cut of $10 billion through 2020 in Agriculture Department spending, chiefly in crop subsidy and land stewardship programs. The average cut of $1.25 billion a year equals 10 percent of annual farm spending.

While the end result would be a $10 billion cut, the commission said its initial target was a cut of $15 billion, with $5 billion reserved to extend the life of a disaster relief fund.

Commission member Kent Conrad, chairman of the Senate Budget Committee, was author of the disaster fund in 2008.

The Conservation Reserve, which pays landowners to idle 32 million acres of farm land, was not cited for cuts. Two other land stewardship programs, the Conservation Stewardship Program and the Environmental Quality Incentive Program, were listed.

The commission also suggested “reductions in direct payments when prices exceed the cost of production or other reductions in subsidies” along with smaller funding for an export promotion program.

The so-called direct payment is currently the largest farm support at nearly $5 billion a year. The payments are guaranteed annually to farmers and are based on past production of grains, soybeans and cotton.

Some farm groups want to eliminate or reduce spending on the direct payment in favor of supports triggered by low prices or poor yields. Growers in the South and Plains like the direct payment.

“The Agriculture Committees will be responsible for revising policies to meet their priorities in the upcoming Farm Bill within the lower baseline recommended by the Commission,” said the proposal.

(Reporting by Charles Abbott; Editing by David Gregorio)

Defict plan would cut farm supports by 10 percent