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Farm boom undercuts push for new subsidy package

A House panel cut subsidies for wealthy farmers Thursday. Will Congress slash even deeper?

By Richard MertensCorrespondent of The Christian Science Monitor / July 24, 2007

Genoa, Ill.

On a warm July afternoon, with the Illinois sun glinting off a field of lush green corn, Joel Gerlt steps between the rows and disappears.

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"This is really exceptional," he says, standing among stalks that tower above him and are not done growing. "I've never seen it this high at this time of year."

For Mr. Gerlt and many other Midwestern farmers, these are exceptional times indeed. Prices are high. The national appetite for corn seems insatiable. At the same time, farmers' good fortune has thrust them into the center of a fierce debate in Washington over how much help they deserve from US taxpayers.

As Congress enters the late stages of crafting a new farm bill, high prices for many commodities have made it harder than ever to defend crop subsidies that pay farmers billions of dollars a year, even in good years. At the same time, a growing chorus of voices is calling for a shift to other priorities, including rural development, aid to fruit and vegetable growers, food stamps, biofuel programs, and especially conservation.

Under those twin pressures, the House Agriculture Committee last week approved a five-year measure eliminating subsidies for farmers with $1 million or more in adjusted gross income. But it also increased supports for some crops and introduced new ones for others. The full House could take up the bill this week.

Agriculture groups "are strong enough now, but smart people among the commodity groups say all the time that they know it's a rear-guard battle and that we have to change something," says Ferd Hoefner, policy director for the Sustainable Agriculture Coalition, an umbrella organization in Washington, D.C. "Production subsidies are losing public support."

Conservation is a likely beneficiary of change. For example, the House committee bill boosts land-conservation programs and wetlands protection.

US farm policy has already been tilting toward conservation for two decades. Earlier programs focused on removing marginal land from cultivation. But the last farm bill, passed in 2002, made an unprecedented commitment to farmers who use or wish to adopt environmentally friendly practices on their land.

Conservation programs are popular in farm country, where farmers are applying to carry out projects in far greater numbers than there's money to fund them. Proponents say the programs should be expanded to meet the demand. They also say that the expansion of corn acreage – up 19 percent to 95 million acres, the highest since 1944 – has made conservation more critical than ever. Corn requires massive quantities of fertilizer and other farm chemicals and is blamed for widespread soil degradation and water pollution.

Proponents also point out that "green payments," which are unrelated to production, are permissible under international trade rules. Current crop subsidies have been repeatedly challenged by the World Trade Organization.

In theory, few groups oppose spending more on conservation. But their support often hinges on where the funding will come from. One of the most obvious places is crop payments, which, after food stamps, consume the largest share of farm bill spending, and which many critics say is money wasted.