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$145.8 billion USDA budget ends direct payments

Article on Farm Bill and this one is mentioning a cut to our Crop Insurance Subsidies which doesn't excite me very much. Cutting all Crop Insurance Subsidies just in the state of Iowa will cost Iowa farmers an extra $1.2 Billion dollars a year in production costs. Although myself, I am far from being a BTO, my production costs will increase by $81,600/year just for my small farm operation. An increase of $81,600/year for us small guys is actually alot since it hits the net profit column on our spreadsheets directly. Article is below:



$145.8 billion USDA budget ends direct payments


WASHINGTON — The White House proposed $145.8 billion in funding, a 5.9 percent decrease, for the U.S. Agriculture Department in the upcoming 2014 fiscal year.

The Obama administration, as part of its sweeping budget proposal, proposed eliminating direct payments, cutting crop insurance subsidies and better targeting conservation funding. The budget would target investments in renewable energy, rural development and research.

“The farm sector continues to be one of the strongest sectors of the U.S. economy,” the Obama administration said in its budget document. “With the value of both crop and livestock production at all-time highs, income support payments based upon levels of production can no longer be justified.”

The House and Senate Agriculture committees are expected to begin work on crafting a new farm bill as soon as this month. Last year’s farm bill proposed eliminating the $5 billion a year in direct payments given to farmers regardless of need while increasing crop insurance programs.

Obama and his Republican predecessor, President George W. Bush, have proposed farm subsidy cuts every year, and Congress has largely ignored them. There is congressional momentum for eliminating some subsidies paid directly to farmers this year, though, as farm-state lawmakers search for ways to cut agricultural spending and pass a five-year farm bill. There is less appetite among lawmakers to cut crop insurance.

The budget also would overhaul the way American food aid is sent abroad, a move largely anticipated by farm and food aid groups. The United States now donates much of its food aid by shipping food overseas, a process many groups say is inefficient. The budget would transfer the money used to ship the food to cash accounts at the United States Agency for International Development. The administration says that would help 2 million more people annually and save an estimated $500 million over 10 years. Farm and shipping groups are strongly opposed to the idea.

The bulk of the USDA budget is money for the Supplemental Nutrition Assistance Program, or food stamps, which is expected to cost around $80 billion in the 2014 budget year. Costs for the program have more than doubled during Obama’s presidency, driven by an ailing economy and an expansion of the benefit in 2009. Conservatives have called for cutting or overhauling food stamps, but the budget says the Obama administration strongly supports the current program “at a time of continued need.”

This report includes information from the Associated Press.


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