Family Farms and Agribusiness
Obama’s Budget Proposal Riles Montana Farmers
Cutting off subsidies to farms with more than $500,000 in revenues could hurt lots of productive family farms, not just agribusinesses.By Myers Reece, Flathead Beacon, Guest Writer, 3-12-09
Photo by Lido Vizzutti, Flathead Beacon
President Barack Obama’s proposal to reopen the 2008 Farm Bill and slash direct payments to large farms is meeting strong opposition from the agricultural industry across the nation and in Montana.
In his $3.55 trillion budget outline unveiled in February, Obama proposes to cut direct payments – a federal agricultural subsidy – to farms that generate more than $500,000 in gross revenues. Based on recently released figures from the United States Department of Agriculture, Montana has more than 1,100 farms that meet that criteria. These farms are responsible for nearly half of the food produced in the state, according to a letter from Sen. Max Baucus to Secretary of Agriculture Tom Vilsack.
Obama’s rationale behind the proposal is to eliminate government subsidies to large corporate farms that he doesn’t believe need them. To make the changes, Congress would have to vote to reopen the 2008 Farm Bill. There are more than 116,000 farms nationwide that could lose their federal payments under Obama’s plan.
But Lola Raska, executive vice president of the Montana Grain Growers Association, said Obama’s proposal misses its goal though she respects its intentions. She said if a 2,500-acre farm – average size in Montana – yielded a moderate 40 bushels per acre and sold the harvest at a typical market price of $5 to $6 per bushel, its gross revenue would exceed $500,000.
Raska uses this example to demonstrate the effect Obama’s cuts would have on average-sized farms in Montana. Furthermore, Raska said mid- and larger-sized family farms – not massive corporate operations – are responsible for the majority of agricultural production in the state. She said 80 percent of all food produced in-state comes from only 20 percent of the farms.
As state Sen. Bruce Tutvedt, a farmer from Flathead County, puts it: “Based on size, you would be taking out the most productive and efficient farms from participating in the farm program.” If the criteria were changed to income instead of gross sales, the large corporate entities may be hit, though Montana would be safe.
“I don’t know any farmers who do $500,000 in income” in Montana, Tutvedt said.
Tutvedt, who grows mint and other crops, said changes to the Farm Bill would affect only a handful of the Flathead’s biggest farm operations, including his own. The eastern part of the state would feel the greatest repercussions.
Echoing Raska’s sentiments in his letter to the Secretary of Agriculture, Baucus wrote that Obama’s proposal “does not successfully distinguish between struggling farmers and wealthy landowners.” Baucus, a lead author of the 2008 Farm Bill, also was critical of the plan for proposing to cut crop insurance subsidies and not investing in agricultural research.
“I support President Obama’s goal of cutting subsidies to large agribusinesses and I hope that you will rework the current proposal so family farmers are not harmed,” Baucus wrote.
The Montana Farm Bureau Federation has also spoken out against Obama’s plan.
Raska and Baucus point out that gross revenues are far different than net revenues, especially in agriculture, an industry that is currently subject to soaring fertilizer prices and other high input costs. Direct payments are designed to help farmers toe the line when sales – gross revenues – don’t keep pace with expenses, the market declines or unpredictable weather strikes, which is a constant dilemma in agriculture.
A farm that spends $600,000 on expenses and makes only $500,000 in revenues would not be eligible for direct payments if Obama’s plan is instituted.
“Anyone who’s familiar with agriculture knows that you can have higher expenses than revenues,” Raska said.
Tutvedt said he doesn’t know why Obama wants to reopen the Farm Bill after Congress emphatically defied former President George W. Bush two times to pass the $307 billion law last year. Twice Bush vetoed the bill and twice Congress voted overwhelmingly to override him. To Tutvedt, that’s a clear signal the bill should be left alone.
“To go into and change that would be an interesting turn in the program,” Tutvedt said.
Agriculturalists are also concerned with Obama’s budget proposal to cut crop insurance subsidies, which Baucus addressed in his letter. Raska said crop insurance is vital to farming operations and she envisions growers cutting back or dropping their insurance altogether if more restrictions are put into place.
Raska believes widespread opposition to the proposed changes within the agricultural industry, as well as the lobbying efforts of farming groups at the federal level, should have a persuasive effect on the Obama Administration. But even if the current issues get resolved, she sees more arising as the federal government looks for ways to trim its budget.
“As long as we’re having a problem with the economy, I think it will be ongoing that we will have to justify the Farm Bill,” Raska said.
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The conservation program bothers me the most. Paid not to farm is quite an incentive. Paying subsidized crops is still a better system than any thing else. This will help them compete in the national markets. Continental areas such as South America and Australia can produce crops cheaper than we can in the U.S. Everything from land prices to production inputs such as seed, fertilizer, chemical control, storage, and marketing.
If you think there has been inflation in food, take away the incentive to farm and the prices will really run away. We will end up an import country instead of an export country of agricultural commodities. Interestingly 3% of the farmers provide most of the food base in the U.S. with the exception of items like bananas. A lot of the budget of the Farm Bill is for the food stamp program. Talk about a subsidy that is abused. (It burns me to see people with food stamps eat better than I do.)
lets not talk about how efficient an industry is when it needs production subsidies, raw material subsidies, and protectionist tariffs.
the fact that someone has been farming for generations is not a defense.
Nice job researching and throwing your liberal bias at this story. Anyone with even a little knowledge of the agriculture business knows that many MT farmers vote Democrat, largely because Democratic administrations tend to support stronger subsidies. My brother-in-law on the family farm longs for the days of the Clinton administration. A little research will show you that one of MT's largest recipients of CRP funds (over $100K/year) was treasurer for the Tester campaign.
I'm not a fan of any subsidies but this plan is especially flawed by the assumption that $500K in top line revenue indicates that a farmer is getting rich. Today's farmers often need operating loans of several hundred thousand dollars just to put a crop in the ground due to cost of equipment, seed, fertilizer, insurance, etc. Obama's thinking on this subject is just as far off base as his thought that a family earning over $250K is "rich".
A word of advice for your poor factory worker friends that lost their job, healthcare, etc. Get an education or find the ambition to start a business and quit waiting for the gov't to solve your problems.
Farming is one enterprise that does need govt subsidies because the the importance to the country and the many potentially negative variables that go into each growing season in addition to the production costs. We also compete in a world market with countries like Canada that subsidize more than the US.
Sorry NoGriz...anyone making $250,000 annually is relatively rich. Most families don't come close even with two incomes! You need to watch your lifestyle a little if you can't make it on $250,000!
So now that is out of the way, and AIG has gotten more than farmers by billions (what farmers get in the Farm Bill is miniscule--food stamps for the work challenged and generationally never worked a day in his/her life is paramount), does anyone want to recognize that farm subsidies are what keep the frigging land being farmed instead of developed? Isn't CRP or CREP a lot better than farmettes and llamas, dogs, goats, and cats, weeds, bad fences, more roads and driveways, more wood smoke?
And the welfare ranchers....they have a home place on which to grow winter feed, and they go on the public land in summer to cut the fire danger and eat some grass. So get rid of them, for goodness sake, and make the land totally unfit for wildlife. I quit hunting the places the cows were forced off of. No game lives there now. Rank grass and dead browse are not attractive to big game. Yes. You can and people do, over graze. But there is an overwhelming majority that does not. But punish them for the sins of others. That is the liberal way.
This country is in a hand basket on its way to economic hell, and the Congress is lavishing pork and stimulus like they know where the hidden pot of gold is to be found, so the answer is to kill the Farm Bill, and get rid of farmers. Dolts!! We are a country of Dolts!!!
The god damned farmers are about the only class left that is creating some wealth by producing something that can be further processed in this country, and sold in this country. Gee. All those jobs are here. And the Dolts! want to export those jobs, too. The only reason this country is hanging over its belt in a deep recession is because of the Farm Bill food stamp program, and the farm subsidy cheap food policy. Kill that, and we all get skinny. Some will get so skinny that they go to room temperature.
Congress is giving your heritage to bankers for free, and you have to attack farmers. Some kind of feint, that one. Go after the crooks, the slimebags: the Bankers....the bankers continue to screw this country, and nobody takes a crack at them. Nobody. Our hands are tied. Damned rights. Tied to the bankers, dillwad, and we know it. Holy Shit!!! AIG has taken $140 B I L L I O N dollars from the tax payers, and this week they are paying contracted bonus money (how in the f--k can you get a bonus when your company is down $140 MegaLarge....Billion?) and they have paid $12.9 Billion to GoldmanSachs, who was bailed out by the first TARP payment managed by former GoldmanSachs CEO Paulson....Paulson has gotten them another $13 billion....asshole...and people have the audacity to point fingers at the Farm Bill?? Up your nose with a rubber hose....from a Kotter Kid....
It is all welfare and it is time for much of it to end. In our state if your name is Gonzales and you go to welfare, they fall over backward to give out the free money. If you name is Smith it is "take a number and we will see you when we can" The system smells from the offices to the farms; it is called "American Greed"
"Get an education or find the ambition to start a business and quit waiting for the gov't to solve your problems."
Cuz, that's how farmers start out.. really. They just pull themselves up by the boot straps and start farming. What a crock. People farm because it's passed down to them, or because they were wealthy enough to by the land, equipment, and material to start.
I am a 4th generation ex-farmer myself and I know how this shit works. Go float your BS elsewhere.
So, please spare us the rah-rah talk about how you, "did it all on your own". There is a 95% chance that if you're farming, you got the land and goodies from your family and at one time or the other, and that your family was able to keep it going thanks to a farming program or some other govt. dole. since they started homesteading or whatever.
That, my hard working farming friend, is slightly different from the guy bolting wheels on cars down assembly line...
I grew up on a farm but left to get an education and have made my living largely through entrepreneurial efforts. Though I come from a farm background and my parents received their share of subsidies you will not find me defending subsidies for any industry.
So tell me how the auto worker has pulled themselves up by the bootstraps to create their job with inflated union wages? I'm sorry, but I just don't buy into the victim mentality that is so prevelant in this country. There are definitely people that have had very tough breaks, but 95% of the people in this country get exactly what they deserve out of life based on the choices they make. You know why some people are more successful than others? Because they work harder and work smarter not because everything was handed to them.
So, the question is: If the Federal Reserve is NOT the US Govt, but a private bank of privilege that facilitates the movement of money between banks, and the banks are nationalized, does this mean the Fed becomes a US Govt bank? If so, then what is the Treasury for other than a printing house for money?
The whole of the financial system has been interfered with, upset, and not allowed to sink or swim on its own. Government intervention. Capitalism tossed aside for socialism. America: "What's in it for me?" It appears to this fat boy that the "rescue" of banks, and hypothetically our whole financial system, has been about as efficient as the Bush Admin. handling of the Hurricane Katrina aftermath. They knew it was coming, had from the day after the election until the inauguration to prepare, postured that they were planning their strategy, and after it was all over, stood around for way too long trying to figure out how to spend a lot of money on infrastructure and welfare that was not worth the time and effort, let alone expense. The money Bush spent on a sinking city in the hurricane belt is mostly money down the rathole of bureaucracy. So, too, it seems the bank rescues by the Obama Administration. Keep pouring the money into the sinking infrastructure of finance, while the rest of the economy is pulled under with it. The perps of this deal are getting bonus money and 10% of Americans are getting layoff notices. Isn't there something inherently wrong with that scenario?
In the super secret files of who gave the almost billion dollars to elect this administration, the public does not know who is getting bailed for political reasons, and who for economic reasons. I just love the AIG passthrough payments to GoldmanSachs...on top of the money GS got in the TARP deal. And everyone who had a dime in Lehman Bros is just out the money. It is gone. A void in the IRA, the pension fund, the 401k now a 101k. If the others are getting propped up to "save" investors and make the system run, where in the hell is the fairness in that? I get it!!! It is not fair. It is political. Dumb me.
So the issue of farm payments has been a part of American ag for a long time. The last Great Depression was part and parcel a fallout from our Ag industry and Ag implement industry going full blast after WWI to recover and feed war torn Europe. And then Europe got to feeding itself, and the markets for American goods dried up, and suddenly companies and people and then farmers starting going broke because they owed more than they could pay. And the banks, NOT REGULATED, went bust along with them, and people with jobs had their savings wiped out in the stock market and the banks, and then lost their jobs, then their home or farms. Bad enough that there was at one time an estimated 225,000 FEMALES riding the rails, hoboettes, at the depths of the Depression. It took a war to recover the economy. And the war was a good deal because it required education and order. WWII was the biggest, best, MBA program ever created. Millions of young people got responsibility and creative with help, and then after the War, the GI Bill, and that is when this country became an educated country, and a world power. And to keep the Ag sector from dragging down our economy, it was subsidized to compete in the world with the subsidized ag of most of the other countries. A large part of the ag subsidy is to "bank" land, not farm it. The rules make the conservation wildlife friendly, and for that, it is only fair that the landowners of record get paid...even if the landowner is State government or an NGO environmental outfit. Another huge part of ag subsidy is no more than the school lunch program to feed the poor children to that they might learn more with well fed brains. By looking at school kids today, they have to be the brightest ever, if being well fed is an indicator. Or are they just fat? Food stamps is another ag subsidy in the Farm Bill. A quarter of our country eats because we feed them off the Farm Bill. Why, even Weyerhaeuser got $178 million from an earmark by Montana Senator Baucus, chair of the Senate Finance committee, in last year's Farm Bill. Weyerhaeuser was slow to convert to an REIT, so Baucus gave them the same tax structure to tide them over while they close US mills, and focus on lumber manufacturing in Canada. The mill in my county was closed permanently yesterday. A part of the Willamette Industry unfriendly takeover. This mill's blacksmith shop invented the straddle lumber carrier, (Gerlinger straddle buggy), the forklift that was eventually bought by Caterpillar, (Towmotor), and the Gerlinger Motor Truck, which became Kenworth. If you think Weyerhaeuser is good at killing trees, they are also good at killing their own industry. I swear to God that Milo Minderbinder is the secret CEO....or one of his offspring is. A tip of the hat to Baucus for his complicity in a fraud on the American people on behalf of Weyerhaeuser stockholders. The employees would just as soon string him up as a traitor. I know the Carpenter's Union lobbyist...Baucus will NOT get carpenter union money in the future.
So, in some way, this coming deep recession (joblessness is still rising precipitously) is an opportunity to use existing universities and public structures, empty factory buildings, to once again borrow and spend against our future to educate and train our population once again, to generate the will to succeed, and to create another generation of entrepreneurs and dedicated workers. In the two to three generations since WWII, that has been lost, and it needs a kick start. This is a good time. Maybe Baucus can put it into the Farm Bill as an earmark. Nah...we need more Wilderness to generate more jobs. heh heh....for firefighters once every few years.