Obama to cut payments to farms making over $500,000

[Joanne98]

Source: Reuters


WASHINGTON, Feb 26 (Reuters) - President Barack Obama will phase out government payments to crop producers making more than $500,000 a year and eliminate subsidies for cotton storage to help trim the U.S. budget deficit, a senior administration official said.

Obama, who lays out his budget proposals later on Thursday, targets agriculture, tax procedures, and defense procurement in his efforts to cut spending and rein in a deficit the White House projects will reach $1.75 trillion this year.

"Roughly a third of farmers receive direct payments, which they receive regardless of whether they are producing anything or not," the official, speaking on condition of anonymity, said while explaining elements of the budget ahead of its release.

"We would propose that for farms with revenue above $500,000 a year that we phase out those direct payments over time."

Those cuts would save $9.8 billion over 10 years, he said. Stopping payments to cotton producers who get money for storing cotton while it is under a "marketing loan" would save $570 million over the same period, he said. (Reporting by Jeff Mason and Caren Bohan)



Read more: http://www.reuters.com/article/governmentFilingsNews/idUSN2551504220090226

---

Fat cat welfare farms. Got to go!

[Captain Hilts]

1. Well done! Archer Daniels Midland, suck on it and like it. Dwayne Andreas, etc. nt

[bread_and_roses]

8. Yes, well done! Hope he can do it against the agri-business lobby (n/t)

[Captain Hilts]

12. We have the first Congressional majority in years. It's not as big a majority as we need...

but it's a lot more than we've had in a while. I hope they can make this happen.

[jody]

2. A more accurate title "Obama WANTS to cut payments". The odds are against making major cuts. n/t

[gblady]

3. why.....

do you say that?

[jody]

4. Because the powerful farm lobby controls enough Dem and Rep senators and congresspersons to oppose

major changes in farm subsidies.

[trotsky]

6. I wouldn't call it a "farm" lobby as much as an agribusiness one.

Both sides of my family were farmers - they never came close to making enough to be part of any farm lobby.

[Captain Hilts]

14. Archer Daniels Midland. Dwayne Andreas, etc. nt

[Robb]

16. Good. Very important distinction.

To say nothing of "gentleman" ranchers. Ralph Lauren's ranch, for example, received federal assistance after the 2002 drought in Colorado.

[Enthusiast]

54. This is where corporate control of

TV hurts us. Agribusiness can frame the argument so Obama is seen as attacking the family farmer. Again, this is why THE MEDIA is our most pressing issue.

[Captain Hilts]

13. The flat/flyover/Red states are over-represented in the senate. That's why. nt

[jody]

44. Agree, states like WY (450k people) have 2 senators just like CA (37 million). n/t

[tex-wyo-dem]

47. True, but...

(at least in the case of WY) they have only ONE rep in the House. So I guess you can say it balances out since bills have to go through both chambers.

[jody]

49. "balances out"! That's like having your head in the stove, your feet in the refrigerator and saying

on average I'm comfortable.

[tex-wyo-dem]

51. Point taken...but I believe that was the intention...

blame it on the founding fathers, I guess :)

[jody]

60. Some constitutional scholars believe the imbalance was to preserve the power of wealthy landowners

versus the representatives of We the People. :hi:

[xxqqqzme]

73. That's exactly why it is structure the way it is,

Senate - House of Lords; House of Representatives - House of Commons. Majority of Declaration signers were wealthy land owners/farmers.

[jody]

74. Reminds me of the two story outhouse pictured below.

[Laelth]

94. It was a compromise.

The lightly-populated Southern states would not have joined the union without their being over-represented in the Senate. For better or for worse, it's what we have.

And it does hurt us immensely.

:shrug:

-Laelth

[cottonseed]

85. There's a reason for that you know?

[geardaddy]

75. So one Senator is enough?

We only have one right now anyway.

[Thothmes]

83. IAW the Constitution of the United State.

[lostnfound]

7. Speaking about it in his first almost-SOTU address is a good first step

Informing the public just might get pressure put on congress to learn to say no once in a while to certain lobbies.
That was what was encouraging about it.

[jody]

9. It's puzzling that Obama wants to cut subsidies to farms while giving trillions to banks and

businesses?

Why does he ignore the simple fact that the US exports billions of dollars of agriculture products and that is possible in part through the assistance of farm subsidies?

Why do people complain about outsourcing manufacturing and IT jobs but ignore other labor groups?

[boomerbust]

17. I think

These cuts will be targetting Alabama agribusiness and other southern entities that have been leaching off the taxpayer for way to long.

[Doremus]

23. Because the "farms" that would no longer qualify don't need it.

Because it's the SAME as giving money to bankers that don't need it.

Because the only reason we give them money in the first place is because they have an army of lobbyists.

Because giving free money to wealthy landowners who have no intention of growing a thing is wasteful.

Because the money we were giving them is better used elsewhere.


Enough reasons?

[geardaddy]

36. +1

I recommend your comment.

[Enthusiast]

58. +1 I also recommend it.

No more government teat for those already wealthy entities. They are the very ones that complain about 'welfare mothers'.

[jody]

42. No. n/t

[ehrnst]

25. Big Agribusiness has been at the trough for decades.

The reason that junk food is so cheap is subsidised corn (from which oil, starch and sweetners come) from large corporate farms. They are now also switching from food production to ethanol production, and that will mean less food crop and higher prices at the grocery store anyway. Not that most of the corn was going to grocery to begin with - most of the corn grow on big farms is for livestock feed, which is also harder on the environment than feeding it directly to people.

Meanwhile, smaller family farms and organic farms (who have to pay higher crop insurance) are struggling.

Moving assistance to the farms that are not impacting the enviromnent so much and actually growing human food crops is a wise choice. This may also impell the larger farms to grow more food for human consumption.

[Renew Deal]

33. Subsidies to family farms are not being cut

Your post is misleading. Farms with less than $500K in revenue keep the subsidy. This affects mega-farms.

[jody]

43. My post is not misleading but you are misreading. n/t

[Renew Deal]

50. Your post is misleading because you didn't qualify what was being cut.

There is not a blanket cut of subsidies. It's a cut to the largest farms.

[jody]

57. ROFL, you really misread don't you. n/t

[Renew Deal]

63. No, the money is an important distinction

Look downthread. There are people that think $500k must be a family farm.

[jody]

67. Many farms with revenue over $500k are family farms -- over 60,000 with $500k to $1 million.

http://www.agcensus.usda.gov/Publications/2007/Online_Highlights/Fact_Sheets/farm_numbers.pdf

[Ms. Toad]

64. That is not entirely clear.

The article did not identify whether the $500,000 referred to gross or net income. The family farm I grew up on supported 2 families. In my 2d or 3d year as a teacher I happened to compare my salary to my father's. That year was his best year ever (after farming his entire life), and his share of the profit was approximately equal to the salary I drew that year.

Referencing another current discussion thread - our family income was always just above the level for free or reduced price lunches. We always filled the forms out because whether we qualified or not was so close.

I would not be surprised, however, if the family farm's gross income exceeded $500,000. The profit margin in farming is so low, that it takes a lot of gross income to generate just-above-poverty wage.

I hope the $500,000 is NET income, not gross income. I also hope that there is a per-family factor. My father incorporated the farm with his cousin to take advantage of the legal protections, health insurance (just large enough to qualify for group insurance that would not have been available to a solo farmer with any family health issues), and tax benefits that business structure afforded them. Family farmers that join together to run small farms to take advantage of business structures that give them more options should not have to choose between subsidies and the loss of health insurance (for example) if they would each, individually, qualify had they not joined their farms together.

[zeemike]

70. As with any business expenses are not considered income

The cost of material, labor, and other expenses are not money that you get.
And in fact this will help people like your father because the subsidies that ADM and other agribusiness get helps them to keep prices down.

[Ms. Toad]

79. Expenses ARE considered income.

They are part of the gross income. Net income is gross income less expenses. The article did not distinguish between the two - but a quote did refer to the cutoff as a REVENUE cutoff. ("We would propose that for farms with revenue above $500,000 a year that we phase out those direct payments over time.")

Revenue is generally considered to be all of the money taken in - not the money taken in less expenses.

[Igel]

89. Probably another poli-sci major

assuming that everything he needed to learn about high finance he learned studying political systems in South America.

"Revenue"? Profits? Rate of return?

Hello, let's not speak Burushaski.

[Ms. Toad]

95. Don't know who you are referring to as "he"

so I'll assume you were referring to the person quoted in the article.

I'm hoping it was just careless use of language on his part.

My only point was that reading only the article it isn't clear whether the cap applies to gross income or net income, and the use of the term "revenue" suggest gross. That would be a bad thing, if the intent is to cut off agri-businss and leave family farmers alone.

[DoctorMyEyes]

92. It has to be net

500,000 gross wouldn't even be a farm - it would be more of a hobby. Like you said - the margin is so slim. It takes pretty big gross to even make a living wage.

[Ms. Toad]

96. I hope you're right (that they mean net) n/t

[Thothmes]

84. Net or Gross

[Canuckistanian]

98. If you're making 500,000/year from your farm, you ain't a family farm, you're a corporation

And even if by some wild chance you DO have a family farm making that much, you don't need subsidies any more.

This isn't a "labor vs. big business" issue when you're talking THAT much money.

[jody]

100. See post #67. n/t

[SammyWinstonJack]

37. Same as the odds of us getting universal health care, ain't likely to happen.

Not with the 4:1 ratio involving health care giants and congress critters. It's not like members of congress actually care if all Americans benefit from the same socialized health care that they themselves enjoy. Greedy selfish rat ........!

[harun]

53. Totally agree. Another I will believe it when I see it.

[newfie11]

5. works for me. Our farm gets WAY less then that! n/t

[madrchsod]

10. i doubt this will get out of committee

and if it does it certainly will not be the amount he`s talking about. i would be impressed if he would put more money into the small farms across this country.

[Captain Hilts]

15. Agree. nt

[groundloop]

11. I can hear the repugs now... Obama hates farmers

I grew up on a family farm, and everyone I know supports Obama in this. The 'farms' targeted for the payment phaseout are more accurately described as large businesses, and they sure don't need any federal subsidies. Still, I'm betting the repugs try to use this as propaganda.

[Demit]

19. Obama made a great start the other day by using the term 'agribusiness'

—as separate from farmers. Republicans have been clouding the issue for years by lumping them together & making us feel as if all we're talking about is that couple in the "American Gothic" painting. They do the same thing with how they use the term 'small business'—to make us think we're talking about the Mom & Pop grocery store down the street—when actually the government's designation of small business refers to businesses with net profits of up to $250K. NET profits.

I hope Obama continues to clarify. He needs to establish the word 'agribusiness' until it sinks into the public's consciousness. The media certainly won't do it. They prefer to quote Republican dissemblers.

[HopeHoops]

18. LOL - I can hear O'Reilly screaming about the families losing the 1/2 $M/year farm!

[Mr. Sparkle]

20. Is it wrong to assume that all of these farmers are Republicans ?

that's the impression I have for some reason.

If that's the case, cant we stop all subsidies to these farmers and let the FREE MARKET take over, The Repubs hate handouts. Lets put their ideology into action and save a small fortune.

[terisan]

22. Dems passed lasr year's farm giveaways-so I suspect they got bulk of campaign monies from agribiz.

[DemWynner]

24. It is the same as everywhere

There are some republican farmers, but my family comes from a long line of democrats. I don't think it is right to assume anything.

[newfie11]

27. Most of the farmers I know here in the Nebraska panhandle are repugs

They just can't bring themselves to go against them.

[trotsky]

28. Farm subsidies, incentives, and insurance are necessary.

The problem comes when you have these large farming companies that buy up a bunch of land and collect subsidies/payoffs for it that they don't need. They're successful. They make lots of money. They don't need taxpayer handouts to help them like family farms do.

[Lucky Luciano]

66. I wonder if this will hurt land prices in the midwest and Great Plains

as farmers and large businesses will be less incentivized to buy land that provides them with subsidies. Just a thought on which I have no insight, but would love to hear the opinion of others.

[Ms. Toad]

59. If you are making the assumption as to farmers, in general,

Yes, it would be wrong to assume. I can name a number of Democratic farmers - my father and a number of other relatives - for a start.

As to the Agri-Business - I don't have any direct knowledge.

[Wapsie B]

62. Yes, republican farmers hate handouts but they rationalize the subsidies they receive

saying they're just getting back what they put in. They're the same people giving free advertising to Big-Ag companies with their seed corn caps and windbreakers emblazoned with Pioneer or Monsanto logos, completely oblivious to the fact that these beloved corporations are the ones driving the little guy off the farm.

[geardaddy]

76. Case in point. This person:

http://ericblackink.minnpost.com/2007/11/08/a-guest-post-rep-michele-bachmann-opponent-of-farm-subsidies-benefits-from-them/

[Wapsie B]

77. Is that Sarah Palin's cousin?

:rofl:

[geardaddy]

78. I'm sure MB

wants to be her cousin.

[terisan]

21. Dems, including Obama passed massive agribusiness farm bill last spring to override a Bush veto

Bush came out against the bill, as did Mccain I believe.


I think 19 congressional districts get about half of the subsidies in the mega billion farm bill.

[peacetalksforall]

26. Isn't it that there are family farms and corporate farms. Family farms

- meaning non-mega operations.

If the corporations squawk because their executives or the stockholders would get less, so be it. If by getting less, they take it out by cutting jobs, then the stockholders should move their investments to better companies.

The stockholders have an interest in helping to get out of this mess. Stockholders are just as responsible for the mess we're in as the lobbyists, brass, and congressmen enablers.

It's time to shed light on comfy money and gifts and make adjustments.

Nuts to the lawmakers who make it happen. Dems included.

[bertman]

29. $500,000 in revenue--that's gross sales NOT profit--doesn't sound like megafarm

territory to me. That sounds like a mid-size family farm to me. But I'm not a farmer nor do I know anything about farming. But I do know that any farmer who is able to sell $500,000 in corn, wheat, soybeans, potatoes, etc. is going to have a huge percentage of expenses for fuel, irrigation equipment, farming implements, repairs, barns, storage facilities, labor to assist in planting and harvesting, so I'm guessing that 15% NET profit--meaning what the farmer takes home after all the expenses are paid--would be good money. That's $75,000 a year for working long hours doing very hard work often seven days a week.

Don't get me wrong, I want the AGRO-BUSINESS parasites, meaning the gentlemen farmers and the farming giants to stop getting the subsidies that they don't really need. But I don't want to see family farms getting screwed.

Anyone in the bidness have any numbers for this?

[Renew Deal]

31. 2007 Average farm revenue in Kentucky was $56,586

"Average per-farm revenue in 2007 was $56,586, the Kentucky Department of Agriculture said in a news release."

http://www.bizjournals.com/louisville/stories/2009/02/09/daily18.html?ana=from_rss

So you're wrong. $500,000 is a huge amount of money.

[JerseygirlCT]

40. I think that's the confusion we're dealing with here, though

Is the amount that's being used to qualify the farm's net revenue, or the gross amount it may bring in?

[bertman]

61. Thanks, Renew Deal, for finding that statistic. Looking at that it seems awfully low

if they're considering only full-time farming operations, which is not indicated in the report.

Where I am in North Carolina, there are many small farmers who supplement their farming income with other types of jobs, but still sell their farm products on the open market.

Granted, $500,000 is nine times higher than the average but that does not mean a farm of that revenue level qualifies as agro-business. A family farm could easily generate revenue of $550,000. Where I come from a family business that generates $50,000 to $75,000 of annual income FOR A FAMILY is not big business.

Again, my point is that we do not want to hurt family farms. People who work as hard for their income as farmers deserve all the help they can get. We want to cut off the subsidies to these agro-business giants that are abusing the system, not the family farmers.

[LanternWaste]

86. That figure puts it into better perspective for me...

That figure (56k) puts it into much better perspective for me... thanks.

[JerseygirlCT]

39. Exactly what I was wondering about, Bertman...

Is that $500,000 net income from the farm, or gross? Like you, I can make no claims to understanding the business end of farming, but it seems to me there are a great many expenses required by farmers up front - which are then covered by the income. But it's the difference, the net, that really determines who is a big farmer and a smaller one, isn't it?

And totally agree with your second paragraph.

[Crabby Appleton]

69. Revenue is by definition gross, before expenses

you could have $500,000 revenue and a net loss. Lots of expenses, farm equipment can be very expensive, here's a nice used combine for $250,000:

http://www.tractorhouse.com/listings/detail.aspx?OHID=5489353&GUID=6F49B6DDE4EA483489F8F7CA4AFC5A48

[JerseygirlCT]

71. Yeah, that would have been what I thought

If that's the intention, that very well might hit family farmers, wouldn't it?

[Romulox]

68. If the average plumber doesn't get a government stipend, neither should the average farmer.

[Ms. Toad]

80. Your gut is probably right -

The profit margin on farms is very slim. It would be very easy for a family farm to exceed $500,000 revenue (the point I made above) - particularly if the family farm supports more than one family (and has incorporated to take advantage of group health insurance, limitations on a catastrophic loss wiping out all of the personal assets of the family(ies), tax advantages, etc.

[wickerwoman]

88. I agree that it's hard work and that $500,000 isn't a huge farm

after expenses, but it sounds like it's still well in profit and doesn't necessarily need government assistance. If someone in any other job making $75,000 a year tried to argue that they qualify for welfare most people would be screaming down the house.

Teachers work long hours and have a physically demanding and high stress job and make less than half what the farmer in your scenario does with no recourse to public funds.

[bertman]

90. Wickerwoman, I have a hell of a lot of respect for teachers and agree that their work is demanding

but to compare a teacher's workday to a farmer's is just plain ridiculous. Not only is farming physically harder on the body and done in every imaginable weather condition, it is VERY DANGEROUS.

Regarding the $75,000 annual income, I said IF THE NET PROFIT WAS 15%. And it was for a family farm, which means, as several folks have mentioned previously, that it is a family's income--not an individual's income.

No, it's not poverty level, but it's not a lot of money for the investment and the work required to make it.

As far as farmers getting subsidies, I would much rather see the folks WHO PRODUCE OUR FOOD get a reasonable subsidy from the government than just about any other group I can imagine.

[wickerwoman]

99. I used to work on a sheep farm

and I used to work in a kindergarten and I would take the sheep farm every day of the week and twice on Sundays. Taking into account grading, lesson planning, training and parent meetings many teachers work ten or twelve hour days every day. And it is hands down the most physically demanding work I have ever done in my life (including farm work). And it's a myth that most teachers get summers off... they just work other jobs to pay the rent.

I have never in my entire life been as exhausted as I was chasing after fifteen kindergartners. I went home and just stared at the wall for four hours. I was too tired to even watch TV. My thigh muscles were shaking from squatting down all day so that I could hardly walk.

Add to that the stress of chasing after kids at recess and just praying to God every second that nobody gets hurt and you don't have to answer to some enraged parent. I'd put myself in the line of fire any time before I'd take responsibility for fifteen sets of parents' prides and joy again.

I'm sorry if it sounds absurd to you, but I really think many people have even less idea what teachers go through than what farmers do, especially in the younger grades. I would, without hesitation, work in rice paddy before I would ever set foot in a kindergarten again. One in three teachers quit in their first year and less than half make it through five years. Ever wonder why?

Since teachers are expected to attend five years of college (and pay back five years' worth of student loans) while farm workers don't even need a high school diploma, it makes even less sense for one group to be paid more than another.

I have no problem with subsidies for *struggling* farmers, but an individual making $75,000 a year is not struggling. I'm sure there's some provisions they can make for family farms but I get really frickin* pissed at some of these uber-republican farmers who begrudge every single penny of welfare to single mothers (who bust their ass working two or three crappy physically demanding service jobs and never get to see their kids) while cheerfully cashing their fat subsidy checks and bitching about the government all the way to the bank.

[Renew Deal]

30. Smaller farms get to keep the benefit.

Not bad. I'm sure there will be those that will try to keep their numbers under $500K. Hopefully the gov't accounts for this.

[veganlush]

32. let's hope he can stand up to these fat cat..

...agri-busness welfare reciepients...

[Wetzelbill]

34. no more fat cat welfare

I was raised on a farm, the little guy can't compete with the big agribusiness welfare state. It's just like wingnut welfare let them do what everybody else has to do. Small farmers earn every bit of relief they get and more, not these guys.

[avaistheone1]

35. I hope Obama and the new administration can do something to put Monsanto in its place.

They are the real terrorists.

[cloudbase]

38. I doubt much will change.

The megafarm corporations will break up their larger holdings into smaller corporations, each magically profiting at just under the $500K threshold.

[kestrel91316]

41. Good. We need an end to subsidies for monocropping and factory farming

and the extremely deleterious effects they have on communities and the environment.

If I were in charge, I'd turn around and send all those subsidies to small, diversified family-operated TRUE farms, CSAs and organics and the like.

[Hulk]

45. WOOT!! About f*cking time!!!

The farm country has changed from when the support was enacted. There are still little farmers, but their are a LOT MORE HUGE CORPORATE farms floating around out there....with MILLIONS OF DOLLARS sitting in each of those out buildings.

It's about time the reins are pulled in on this racket.

[LynneSin]

46. Yes but Joe-the-Plumber might want to farm and why are we making it tough on him

:eyes:

[Joanne98]

48. Watch Senator Shelby oppose this. He's against helping the auto workers

but he'll have a cow if his rich cotton grower mafias get their welfare checks cut.

[Romulox]

52. ALL farm subsidies should be eliminated. President Obama "believes in free trade", remember?

But "free trade" doesn't apply to farmers, for some reason... :shrug:

[lurky]

55. Thank you! Enough with the sacred cows, already.

This is long overdue, along with restoring sanity to our tax structure, and so many other things. We need to keep the pressure on congress to make sure they don't lose their nerve.

[doodadem]

56. One word: Boswell

In Calif., the Boswell Corp. has taken over everything in farming, and found ways to circumvent all the rules. For instance, the last time any kind of regulation was enacted based on acreage, they just broke land up into small enough plots to qualify, and "gave" it to their employees to live on, collecting all of the subsidies. It's just been outrageous.

While those of us with small farms have to jump thru all kinds of hoops, and still get turned down for any assistance.

[jody]

81. You might browse the Farm Subsidy Database, link below.

http://farm.ewg.org/farm/index.php?key=nosign

[fascisthunter]

65. good

[RantinRavin]

72. And in other news

Food prices are skyrocketing as large agribusiness stop production.....

[LanternWaste]

87. Those prices have been skyrocketing since last summer...

Those prices have been skyrocketing since last summer.

[Tashca]

82. Somewhat vague article

Revenue over $500.000. I am going to assume at this point that only includes the commodities they receive direct payments for. I am also going to assume that off farm income will not count or diversified products like livestock will not count against this.

Here in my area based on todays prices and approximate yeilds.... for a corn - soybean rotation that would place the limit somewhere around 800 - 1000 acres. Most farms this size or smaller normally have off farm income......usually one or both spouses...or for a single person they normally would be working an in town job to supplement their income. My gut instinct says this might be a good thing. I am curious to see more details. Yes many entities will divide into smaller ones to qualify for not going over the limit. I hope there are conditions put on this to stop this so called farming the farm program. I could also see larger farms changing rotations to limit the amount of qualifying commodities they grow and try something else..

So many questions........but it really needs to be done. I agree with that.

This will have a much larger impact on the southern states farms.

[Gormy Cuss]

91. How many farms would be affected? If I'm reading the 2007 Census of Ag data correctly, about 8%

USDA Census of Agriculture 2007, Table 3 (Economic Class of Farms by Market Value of Agricultural Product Sold and Government Payments: 2007 and 2002) here are the numbers for 2007:

Total number of farms: 2,204,792
Farms with market value of products sold $500,000 or more: 178,151

And just for laughs:
Total number of farms receiving government payments: 838,391
Total number of farms with market value of products sold $500,000 or more receiving payments: 115,751

So that about 8% of farms with market value of products of at least half of million, but those same farms comprise almost 14% of the number receiving government payments.


The link below is a summary document of other data from the same census. Note that the average value of products sold per farm nationally is $135,000 and that large (250K-500K) and very large (>500K) family farms are only 9% of all farms.

http://www.agcensus.usda.gov/Publications/2007/Online_Highlights/Fact_Sheets/farm_numbers.pdf

[Laelth]

93. My sig. line says it all. n/t

:dem:

-Laelth

[Jeff In Milwaukee]

97. This is about twenty years overdue...

But as has been noted, there are some powerful corporate interests who want to keep the gravy train running. It won't be easy to pull this one off.

[jody]

101. Obama's policy would adversely affect perhaps half of the large family farms which produce 63% of

our food.

"Large family farms (sales between $250,000 and $500,000) and very large family farms (sales over $500,000) made up only 9 percent of all farms. Yet they produced more than 63 percent of the value of all agricultural products sold."

http://www.agcensus.usda.gov/Publications/2007/Online_Highlights/Fact_Sheets/farm_numbers.pdf