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American Farm Bureau not dropping direct payments – yet

The change in the makeup of Congress and the growing federal deficit is putting new pressure on the Agriculture Committees of both houses to reduce farm spending. The Iowa Farm Bureau has voted to recommend Congress eliminate the 2008 farm bill's direct payments and put the money in other programs. The American Farm Bureau Federation has not adopted such a resolution and faces a debate between states that want to eliminate the payments and those who vehemently oppose that.

The American Farm Bureau Federation has not endorsed eliminating direct payments from the 2011 or 2012 farm bill even though one of its largest state member organization – the Iowa Farm Bureau Federation - has voted to do so.

Although some have construed the action by the voting delegates of the Iowa Farm Bureau to mean a tacit endorsement by the national group, the AFBF is a long way from adopting its policy on the next farm law, a spokesman says.

The comments by Tara Smith, the AFBF’s director of congressional relations, came at a farm policy session at the USA Rice Outlook Conference in Biloxi, Miss., Thursday. Smith was joined by Joe Outlaw, co-director of the Agricultural and Food Policy Center at Texas A&M University; and Gary Adams, vice president for economics and policy analysis at the National Cotton Council.

“We’re a grass roots organization, and we certainly have some states that have gone down that path,” said Smith, referring to the vote by the Iowa Farm Bureau’s delegate body. “We have other states that vehemently oppose going down that path.”

The debate over direct payments, which account for about $5 billion a year in federal spending, has increasingly taken a north-south tone. Farmers in the Mid-South contend the direct payments are built into the collateral for their operating loans. Northern Corn Belt producers believe the payments would be better spent for county-based ACRE payments.

Delegate body

“The beauty of being a grassroots organization is that farm policy issues work their way up the organization,” said Smith. “We’ll ultimately have a delegate body that will meet in Atlanta in January. They will decide as a whole what policies they want to be our priorities, and we’ll move forward.”

(The American Farm Bureau Federations Resolutions Committee is scheduled to meet in Washington to further analyze the organization’s farm policy options next week.)

Both Smith and Outlaw presented slides showing the progression of the federal budget deficit over the last 20 years. Congress faces back-to-back years of huge deficits following a few years of budget surpluses in the late 1990s.

'Year of work'

“Basically, it’s going to take a whole year’s worth of work by everyone in the United States to pay what we owe other people,” said Outlaw, who is considered by many observers to be one of the leading farm policy analysts in the nation.

All three of the speakers said they anticipate major efforts to reduce farm program spending in the 2012 farm bill even though, Outlaw said, “I think we can make a strong case that the people in agriculture have already given their share of deficit reduction.”

“I think we’re going to be under extreme budget pressure when we start the next farm bill,” said Smith. “We have a lot of programs (38) that were included in the last farm bill that we don’t have a budget after this year.

“We have deficit reduction task forces out there that are trying to cut money from farm programs. We’ve already seen other pieces of legislation dip into farm bill funds to pay for their programs. So I think the overarching theme of the next farm bill is going to be the budget constraints that we’re going to be under.”

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