Budget slashes farm payouts

President Bush’s budget for 2006 would cut agricultural subsidies by $5.7 billion over the next decade, a proposal already viewed skeptically by farmers and Congress.

Agriculture Secretary Mike Johanns yesterday said the rollback for the politically popular payouts sends a signal “that everybody is going to be a part of this [deficit-cutting] initiative,” a reference to an overall spending blueprint in which Mr. Bush proposed trimming or eliminating dozens of domestic programs.

The White House yesterday formally sent a $2.57 trillion budget to Congress with an eye to cutting in half the deficit by 2009.

The Agriculture Department’s overall budget for fiscal 2006 would remain close to 2005 spending levels, but payment to farmers and crop insurance programs would be cut while food safety, food stamp and child nutrition programs would be boosted.

The cuts would especially affect major Southern crops, such as cotton and rice, by cutting payments to growers by 5 percent, lowering an annual ceiling on payments to individuals involved in farming to $250,000 from $360,000, and limiting who is eligible to receive such payments. Large farming operations often are broken up into several small corporations so they can receive several payments, a practice that would be curbed.

The administration also proposed reducing its crop insurance subsidies.

“My belief is that farmers and ranchers will look at this, they will understand that we have to deal with the deficit if they are going to have a long-term future in agriculture — not only for their generation but for the next generation and the next generation,” Mr. Johanns said.

Farm groups quickly challenged some proposals in the budget, and suggested they were being asked to take more of a hit than other groups as the White House worked to control spending.

“Farmers and ranchers are a very patriotic group of people; they will do their part. Our challenge is to make sure agriculture doesn’t bear a disproportionate part of those cuts,” said Mark Maslyn, executive director for public policy at the American Farm Bureau Federation, the country’s largest association for agricultural producers.

Mr. Maslyn said the Farm Bureau would work with its allies in Congress to shape the budget.

Lawmakers have been sympathetic to farmers. In 2002 Congress passed a farm bill than included a 10-year, $50 billion increase in subsidies.

Rep. Robert W. Goodlatte, Virginia Republican and chairman of the House Agriculture Committee, said the president’s proposal would be thoroughly considered by his committee but raises “serious questions.”

And Sen. Saxby Chambliss, Georgia Republican and chairman of the Senate Agriculture, Nutrition and Forestry Committee, last week said the budget would face a “heck of a fight” if it rolls back the 2002 bill.

U.S. farmers are likely to fight for the subsidies because they increasingly rely on the federal government for a part of their income, said Chris Hurt, an agricultural economist at Purdue University.

“They will argue that they have made major decisions in their farming business based upon the assurances the government provided in this bill covering the 2002 to 2007 crop years,” Mr. Hurt said.

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