Farm subsidies get trimmed in Obama budget proposal

President Barack Obama wants to direct federal agriculture subsidies away from "megafarms" and toward small farmers and sustainable agriculture. His 2010 budget proposal includes several ways to do this.

As he stated in the campaign promise above, he wants to limit farm commodity payments so that no one producer would get more than $250,000. But he also wants to stop larger farms from getting any payments. If a farm has more than $500,000 in sales revenue, it wouldn't get payments under Obama's plan. (He phases out the subsidies over three years.)

Obama's plan says these larger farms should replace the lost subsidies by expanding into new green initiatives.

"Large farmers are well positioned to replace those payments with alternate sources of income from emerging markets for environmental services, such as carbon sequestration, renewable energy production, and providing clean air, clean water, and wildlife habitat," his proposal states. "USDA will increase its research and analytical capabilities and conduct government-wide coordination activities to encourage the establishment of markets for these ecosystem services."

Several farming organizations, such as the National Cotton Council, are opposing these changes.

"The president's proposed limit penalizes the farms that are responsible for the majority of food, feed, and fiber production in the United States," Cotton Council chairman Jay Hardwick said in a statement. "According to the 2007 Census of Agriculture, farms with sales of $500,000 or more accounted for almost three-fourths of all agricultural products sold."

A reporter asked Agriculture Secretary Tom Vilsack about the administration's commitment to a $250,000 cap during a news conference on March 31.

"Obviously, this is a process in which Congress has a lot to say about precisely what the priorities ultimately will be and how they're funded," Vilsack said. "We should be open, as we are, to ideas and suggestions that Congress may suggest."

That doesn't sound like a rousing defense of a cap to us, so we will be watching to see what happens to this proposal. For now, since Obama has included it in his budget outline, we rate this promise In the Works.