Farm Lobby Beats Back Assault On Subsidies

1. Farm Lobby Beats Back Assault On Subsidies MEAK Matt Kaufman, Eric Koziel, Anca Istoc, Kevin Lawson

2. Subsidies Crisis • Farm subsidies in danger of cuts • Farm incomes high • Grain prices up • Federal budget deficit • Major proposed cut shot down • Would have decreased subsidies by $10 bil over 5 years

3. Farmers Prosperous • High global demand for grain • Spurred prices by $2.20 since 2006 • Farm income up • Biofuel demands, rising middle classes around globe • Projected income of $92.3 bil • Subsidy would grant an additional $13 bil

4. Distributed Funds • Why Subsidies? • Helps to stabilize grain prices • Makes products more competitive • Provide abundant food supply • Why Change? • Too much going to farmers • Could be spent on other ventures • Farms doing fine without the aid • Create a more balanced federal budget

5. Farm Bill • Main piece of legislation governing subsidies • The Farm Bill is a success • $80 mil was spent for lobbying the bill in 2007 • Renewed every five years

6. Farm Bill (continued) • The Bill in the past • Introduced in 1930’s • Was intended for only farmers • Present day • It has unnecessary programs • Farmers are less than 1%

7. Agriculture in the Economy • Agriculture and related industries contribute nearly 5% of America’s annual gross domestic product • Costs for seed, land rent and fertilizer have been rising swiftly • In 1996 the Freedom to Farm Act was passed

8. Agriculture in Politics • Emergency relief bills were passed and by 2002 thought of big changes in farm relief were off the agenda • “The success of America’s farmers and ranchers is essential to the success of the American economy” • In 2007 as democrats took power on Capitol Hill, there were proposed big cutbacks in farm subsidies

9. Proposed Breaks • The goal was to give more benefits to farmers who really needed it not the well to do farmers • Bush proposed to end payments to producers with incomes greater than $200,000. The law at the time was $2.5 million.

10. Results • The income limit on payments is now $1 million down from $2.5 million • The limit is $500,000 for beneficiaries who don’t earn at least two thirds of their income from farming. • Support for subsidy programs still remains

11. Laying Down the Law • Chairman Peterson • Made sure more money was added to nutrition and conservation • Unstoppable Farm Lobby • When groups saw the farm lobby wasn’t going to be stopped, they changed from pushing for change to wanting a peace of the pie. • United Fresh Produce Association • Likely to win specialty-crop producers up to $2.2 billion in aid • Black Farmers Association • Support the overall bill in return for language helping members receive settlement money from Agriculture Department in a discrimination lawsuit

12. Politics • House Bill passed by vote of 231-191 • Senate Bill • Passed in December • Eventually ratchet income cap to $750,000 • Bar farmers from collecting multiple payments • Key members of House & Senate to negotiate compromise package by Mid-April

13. President Bush • Threatens to veto both bills • Dangling prospect of $10 billion in new spending • If he gets congressional support for more aggressive changes • White House suggested raising proposed income cap to $500,000 from $200,000

14. Thanks for watching! • Original Article: “Farm Lobby Beats Back Assault on Subsidies,” by Lauren Etter and Greg Hitt, March 27 Wall Street Journal. • Questions?