EWG: House budget resolution small but welcome step

WASHINGTON (April 5th, 2011) - In a time of robust farm income and tight budgets, the House Republican budget resolution takes a small but welcome step toward a more equitable and sensible support structure for American farmers.

The GOP proposal, offered by Rep. Paul Ryan of Wisconsin, would cut direct payments – which are issued to farmers at a set rate regardless of price levels or need -- and the heavily subsidized crop insurance program by $30 billion over the next decade. If the House Agriculture Committee accepts these reforms they would go into effect at the beginning of the next farm bill.

EWG's farm subsidy database shows that 60 percent of American farmers receive no subsidies, while just 10 percent of the largest and wealthiest subsidy recipients have taken home 74 percent of all subsidies paid since 1995.

"The House proposal is encouraging, but much more work needs to be done in the upcoming food and farm bill,” said Craig Cox, Environmental Working Group senior vice-president and director of EWG’s Iowa office.

“We need to create a fiscally responsible safety net that works for all farmers while ensuring that kids have access to healthy food, people hurt hardest by the recession can feed their families and critical protections for our water and soil are in place," said Cox.

The GOP budget proposal puts two major reforms on the table. It would

• Reduce ?xed payments that go to farmers even if commodity prices are soaring;

• Curtail open-ended government support for crop insurance, so that agricultural producers assume responsibility for managing risk as other businesses do.

Direct payments costs taxpayers an average of about $5 billion annually. At the same time, farmers receive billions of dollars from other income support programs. Taxpayers subsidize much of the cost of the crop insurance policies. In 2009, crop insurance premium subsidies amounted to $8 billion. Taxpayers laid out another $9.3 billion spent on direct and counter-cyclical payments (another income support program) that year.