Gov't backs off cutting aid to farmers

LIBBY QUAID

Associated Press

WASHINGTON - After two months of fierce resistance from farmers and Congress, the Bush administration has dropped an effort to cut government payments to farmers.

"Perhaps the administration has finally begun to hear the roar from the heartland," said Sen. Blanche Lincoln, D-Ark.

Cuts in payments would be felt most keenly by cotton and rice farmers in the South and California, but across the country, growers oppose any cuts.

Bush asked Congress in February to slash billions of dollars from payments to large farm operations, dropping the maximum farmers are allowed to collect from $360,000 to $250,000 and closing loopholes allowing some growers to obtain millions of dollars. He also proposed to cut all farm payments by 5 percent.

On Tuesday, Agriculture Secretary Mike Johanns told key senators that while spending must be reduced to hold down the federal deficit, he is willing to look elsewhere in agriculture programs for cuts.

Johanns acknowledged to a Senate Appropriations Committee panel on farm spending that such proposals as the one to cut the payment limit are "quite sensitive."

"We recognize Congress may have other proposals to achieve these savings, and we are willing to work with the Congress on other cost-saving measures," Johanns testified Tuesday.

He told reporters afterward that reducing the deficit is more important than anything else. Bush wants to cut the deficit, projected to rise to $427 billion this year, in half by 2009.

"The goal is deficit reduction. We have to keep our eye on the ball," Johanns said. "The president's got good proposals out there. There may be some other ideas. We'll look at those ideas. We'll try to factor those in."

Johanns has argued that bigger operations collect too big a share of government payments. According to his department, 8 percent of producers receive 78 percent of subsidies.

The administration still supports the payment limit plan, Agriculture Department spokesman Ed Loyd said.

"We are signaling a willingness to work with Congress to achieve these savings," Loyd said.

Bush's proposed cuts would total $8 billion over 10 years, as calculated by the nonpartisan Congressional Budget Office. Last month, House budget writers cut Agriculture Department spending for 2006 by $5.3 billion, while their Senate counterparts cut it by $2.8 billion.

If cuts don't come from payments to farmers, they still must come from somewhere. Republican committee chairmen have suggested reductions in spending on land conservation and nutrition programs, such as food stamps, also run by the Agriculture Department.

Advocates of payment limits said it's possible the administration could still manage to improve subsidy programs.

"Payment limits is but one of the many tools Congress and the administration can use to reform our subsidy programs," said Scott Faber, spokesman for Environmental Defense, one of several groups advocating payment limits. "There are many ways you could reform subsidy programs to cost less and help more farmers."

Lincoln and other farm-state lawmakers were relieved by Johanns' comments.

Sen. Conrad Burns, R-Mont., said that if administration officials are willing to change their minds, "you better believe I'm going to take them up on it."

"I'll continue working with the administration and my colleagues in the Senate until we've found a reasonable compromise between a responsible budget and the needs of our farmers and ranchers," Burns said.

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Agriculture Department: http://www.usda.gov