Obama proposes phase-out of direct payments to large farms

President Obama’s 2010 budget proposal would, over three years, phase out direct payments to producers with annual revenue exceeding a half-million dollars. A statement issued by the White House says large farmers are well positioned to replace those payments with alternate sources of income from emerging markets for environmental services. On the other hand, American Farm Bureau Congressional Relations Director Tara Smith says $500,000 in annual sales is not that much.

“If you look at soybean farm, for example, that has $500,000 in sales, by the time you take out cost of production, that farmer actually only nets only $36,000.” Smith tells Brownfield from her office in Washington, D.C. “To be nickel and diming those kinds of farmers, we have some significant concerns with that.”

The organization is excited about Obama’s budgeted outlays for Rural Development, says Smith.

The White House says USDA will increase research to encourage the establishment of markets for ecosystem services.

The President wants to maintain a strong safety net for farm families and beginning farmers while encouraging responsibility.

The Obama budget proposal includes a quarter million dollar payment limitation for farmers. The White House says the President intends to close loopholes that allow what it refers to as mega farms to get around payment limits. In his address to Congress Tuesday, Mr. Obama said he would “end direct payments to large agribusinesses that don't need them.”

by Tom Steever

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