U.S. Farmers May Face Reduced Subsidies on Budget Deficits, Peterson Says

Growers of corn, cotton and other crops may have to accept reduced subsidies in the next farm bill as budget-cutting becomes necessary to contain record deficits, House Agriculture Committee Chairman Collin Peterson said.

“We’re not going to have any new money; we’ll probably have less money,” the Minnesota Democrat said today at a hearing in Washington of the House Agriculture subcommittee that oversees commodity programs. “We’re going to have to make it work,” he said.

The hearing was called to solicit opinion from farmers on U.S. agriculture policy as Congress begins to craft legislation to replace the current farm bill. That measure, passed in 2008, authorized $289 billion over five years for all Department of Agriculture programs, including food stamps for the poor and farm subsidies.

Those subsidies totaled $15.4 billion last year, according to the Washington-based Environmental Working Group. Record budget deficits and trade disputes may make it more difficult for lawmakers to maintain the payments, Wellesley College professor Robert Paarlberg told the House Agriculture Committee last month.

Farm Bureau

At today’s hearing, Illinois Farm Bureau President Philip Nelson said the structure of the 2008 bill should be maintained even if overall funding is reduced.

“We do understand the constraints of this farm bill, but we have real concerns when we start shifting resources from one area to another,” said Nelson, speaking on behalf of the American Farm Bureau Federation, the largest U.S. farmer group.

Some adjustments may be necessary, said Gary Murphy, the board chairman of the Houston-based US Rice Producers Association. “Rice farmers are certainly not seeing any windfalls” from farm programs, said Murphy, who grows about 7,000 acres of rice, cotton, corn and soybeans in Missouri. “Neither are our brethren who produce other crops.”

Groups representing growers of corn, soybeans, barley, sorghum, cotton, wheat, peas and lentils also testified at the hearing.

Peterson has said he wants the next farm bill approved before September 2012, a year before provisions in the current measure expire, so that winter-wheat growers know what agricultural-support programs will be before they plant their crops.

To contact the reporter on this story: Alan Bjerga in Washington at abjerga@bloomberg.net.

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