The Free Press, Mankato, MN

State, national news

February 1, 2014

Farm bill plows under direct payments

MINNEAPOLIS — Farm subsidies that have guided agriculture through record profits in recent years are going away in the five-year farm bill that could become law in the coming week. But new subsidies in the legislation could be just as generous, and farmers aren't complaining.

Gone are direct payments, a politically untenable system in which landowners got fixed amounts per acre, whether crop prices were high or low — or even if they didn't plant at all. Those will be replaced by a choice of one of two different subsidy approaches that require producers to suffer losses before they can get payouts. The bill also contains a new insurance-based program for cotton farmers.

"We loved the old farm bill," said Woody Anderson, who grows 3,500 acres of cotton in west-central Texas near Colorado City. But farmers knew political support for direct payments was fading, he said.

"We felt like this insurance type program was innovative. It was reform, if you will, and it was the best we could get in the time that we're trying to operate in and get a new farm bill," he said.

The farm bill's authors tout the changes as reform, particularly the elimination of direct payments, which cost $4.5 billion annually. The legislation also caps how much money an individual farmer can receive — $125,000 annually for all payments and loans. But that maximum is more generous than versions that passed the House and Senate earlier.

"We don't pay people unless there's actually a reason, because we've got a price loss or a crop loss," said U.S. Rep. Collin Peterson, a Minnesota Democrat who was instrumental in crafting the final package. "Under the direct payments you got payments whether you needed them or not."

But most of the savings are redirected into the new insurance-based subsides — one for losses not covered by crop insurance, another that kicks in if crop prices fall below certain thresholds. There's also more money for expanding traditional crop insurance.

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