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Committee Report on Farm Subsidy Payments

posted on September 5, 2003

House lawmakers from tobacco states agreed Friday on a plan to end the Depression-era government tobacco program. Under the plan, tobacco farmers will be paid roughly $15 billion to give up quotas, or allotments that dictate the size of their crops.

After the buyout ends, farmers still will be allowed to grow tobacco, but without the government-backed pricing schedule. Though not backed by the entire tobacco industry, lawmakers predict the plan will win passage.

The infusion of taxpayer money into the countryside can sometimes be contentious. And not just for tobacco. Indeed, the government this week was taking a broad look at other farm payment programs, as well.


Committee Report on Farm Subsidy Payments

In what would be a clean-up of the farm subsidy program, a ten-member governmental commission recommended to the USDA that loopholes which allow farmers to collect excessive support payments be closed.

USDA Chief Economist Keith Collins, the non-voting chairperson of the committee, agreed with the decision, stating it would improve the integrity of all farm programs.

Currently, the maximum amount an individual farmer can receive is $360-thousand. The USDA has projected that the program will cost taxpayers $25-billion over the five-year life of the 2002 Farm Bill.

Even so, the program has been highly criticized for provisions which allow individuals to receive extra payments when they apply under more than one title. The current legislation also allows those who have an indirect role in the operation of a farm to receive a government boost.

The commission did not recommend that the program be scrapped and that any changes be made when the current bill expires in 2007.

Some lawmakers and watchdog groups oppose subsidy payments on the grounds they only bolster the bottom line of large producers instead of going to smaller operators who need the money. These groups hoped the committee would recommend a targeting and lowering of the maximum payment, as well as a closure of any gaps.

Senate Finance Committee Chairman Republican Charles Grassley of Iowa stated the report shows reform is needed. The farm state lawmaker plans to push for new limits when the 2004 Agriculture Department budget comes up for consideration.


Tags: agriculture government money news USDA