Obama Targets Farm Subsidies As 'Wasteful'
President Obama zeroed in on about $5 billion in farm subsidies as an example of the fedral government's "wasteful spending" during his first national address to a joint session of Congress last night.
Obama's attack on direct payments, a largely restriction-free subsidy system that pays out to farmers regardless of what crop is grown, is not altogether surprising. In November, the incoming president cited a Government Accountability Office report that said from 2003 to 2006, "millionaire farmers" got $49 million in farm subsidies despite earning more than the $2.5 million cutoff in annual income.
In last night's address, the first national speech for Obama a little more than a month after taking office, he told lawmakers yesterday that the country should end "direct payments to large agribusinesses that don't need them."
In 2006, a team of Post reporters -- Dan Morgan, Gilbert M. Gaul and Sarah Cohen -- published a nine-part series, "Harvesting Cash," investigating farm subsidies, including one article that focused on direct and countercyclical payments, the largest type of annual payments.
Between 2001 and 2006, at least $1.3 billion was paid to landowners who had planted nothing since 2000, The Post found. Among the beneficiaries were homeowners in new developments whose backyards used to be rice fields.
Direct payments, which date back to 1996 and now make up nearly half of the country's agricultural subsidy system, were meant to act as a trial run toward eventually getting rid of costly farm subsidies altogether. But the payments have grown into an even larger subsidy on its own, The Post found.
As Morgan, a longtime Post reporter who now serves as a fellow at The German Marshall Fund for the United States, describes it: direct payments are based on the farmer's record of planting specific
crops land prior to 1996. "That established his 'base acres,' which qualify him for direct payments that are, in effect, like a second social security check," Morgan wrote. (The Environmental Working Group's list of biggest recipients of direct payments along with a full analysis posted today.)
Farm groups immediately began weighing in today on the pros and cons of Obama's plan. Jim Lyons of Oxfam America told Reuters that ending direct payments would "level the playing field for small farmers everywhere."
But Bob Stallman, president of the American Farm Bureau Association, released a statement saying "even deeper cuts in agricultural supports would have drastic impacts at the farm level and would certainly curtail much-needed economic activity without yielding deficit reduction of any significant degree."
The Post's Steven Pearlstein noted that the chairman of the House Agriculture Committee, Rep. Collin C. Peterson (D-Minn.), was one of the only Democrats to vote against the stimulus package. "Guess he thought there weren't enough goodies in there for farmers, since when it comes to farm subsidies, his concern about the national debt seems to fade into the sunset," Pearlstein wrote in an online chat.
By Derek Kravitz |
February 25, 2009; 5:43 PM ET
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