Washington, D.C. - Iowa's crop insurance industry and more than 1,000 of the state's largest farms could lose federal aid under President Barack Obama's proposals to slash agricultural spending.
The president's 2011 budget released Monday also calls for reducing the planned growth of conservation programs that are popular in the state because of the help they provide in curbing pollution from farms and feedlots.
The proposals met swift criticism from key farm-state lawmakers.
The cuts in subsidies to crop insurers and large farms alone would total about $10.2 billion over 10 years, enough to fund a proposed increase of about the same amount in spending on school lunches and other child nutrition programs.
Last year, Congress refused to approve a subsidy cut that the administration directly linked to boosting child nutrition. Farmers protested that the proposal unfairly pitted them against hungry children.
This time, Agriculture Secretary Tom Vilsack flatly denied that the latest proposals were related. Instead, he said, the subsidy cuts are needed to shrink the federal deficit, estimated at $1.6 trillion for the current year. That would help farmers by holding down interest rates, he said.
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Iowa farmers collectively receive about $500 million a year in fixed payments, 10 percent of the total distributed nationwide.
The president also wants to restrict those subsidies to farmers with no more than $500,000 in farm income and $250,000 in nonfarm income. The current caps are $750,000 and $500,000, respectively.
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Sen. Tom Harkin, D-Ia., who got CSP enacted in 2002, said Obama's proposed cuts in "agricultural conservation will be damaging for rural America."
Sen. Charles Grassley, R-Ia., who has championed cuts in payments to large farms, said Obama's proposals didn't go far enough because they wouldn't cap subsidies that are linked to fluctuations in crop prices.
But Senate Agriculture Committee Chairwoman Blanche Lincoln, D-Ark., has been a staunch defender of subsidies, and she said the president's plan "places a disproportionate burden on the backs of farmers and rural communities."
http://www.desmoinesregister.com/article/20100202/BUSINESS01/2020354/1030/Insurers-big-farms-face-cuts-in-federal-budget