8/1/05
Background:
Congress has agreed to cut $3 billion from the 2006 agriculture budget. Many Congressional leaders, including House Agriculture Committee chair Robert Goodlatte (R-VA) and Senate Agriculture Committee chair Saxby Chambliss (R-GA) are targeting basic food support, conservation, and family farm programs that serve millions of people for these huge cuts.

Instead of these shortsighted actions, Congress should save money by enacting a firm maximum limit on the amount of crop subsidies any one producer can take from the government, as proposed in the Rural America Preservation Act of 2005, introduced in the Senate by Senator Charles Grassley (R-IA) and Senator Byron Dorgan (D-ND). Similar legislation has been introduced in the House.

The Grassley-Dorgan bill will:
• set a $250,000 per year payment limit on commodity program payments
• close loopholes that allow mega-farms to collect even more than the current stated limit
• save $2 billion dollars in the federal budget – more, if the payment limit is set lower.
• protect basic food support, conservation, and family farm supports from major cuts

Wouldn’t you think $250,000 a year would be enough?! If the Grassley-Dorgan bill had been implemented in 2003, according to USDA statistics, only four extremely large agricultural operations in Minnesota and two in Wisconsin would have been affected. But nationally, hundreds of millions of dollars would have been saved. Still, lobbyists for big agribusiness have stopped all attempts at reform.

Despite these facts, neither Senator Mark Dayton nor Senator Norm Coleman have signed on to the Grassley-Dorgan payment limitation bill. They need to start responding to people in Minnesota, rather than agribusiness lobbyists in Washington, D.C.

LET YOUR VOICE BE HEARD!
Please make two telephone calls, to Senator Dayton and Senator Coleman. Leave a message with their staff (or answering machine). Tell them that you want them to support crop subsidy payment limits by co-sponsoring the Rural America Preservation Act. Tell them why: that the basic needs of people and the land come ahead of huge payments to big agribusinesses.

* Senator Mark Dayton: 202-224-3244

* Senator Norm Coleman: 202-224-5641

U.S. FARM PROGRAMS IN NEED OF MAJOR REFORM
A critical issue before Congress right now is the 2006 budget. Given the state of the economy and the cost of the war in Iraq, major cuts will be made in the federal agriculture budget in September. Congressional leaders are targeting nutrition, conservation and rural development programs that serve millions of people for these cuts. Instead, Congress should save money by enacting a firm limit on the amount of crop subsidies any one producer can take from the government, as proposed in the Rural America Preservation Act of 2005, introduced in the Senate by Senator Charles Grassley (R-IA) and Senator Byron Dorgan (D-ND).

Why do we need Congress to enact a firm cap on federal crop subsidies?

1. Commodity subsidies are extremely expensive and unfairly distributed
Ag commodity programs have averaged about $15 billion per year recently and are expected to reach $24 billion in 2005. Right now, 8 percent of farmers who get federal farm program payments get 78 percent of the payments – and nearly two-thirds of farmers don’t get any. This means that just 3 percent of U.S. agriculture producers, many of whom are absentee investors or agribusiness corporations, are collecting 80 percent of the multibillion-dollar farm program expenditures each year. Given budget demands, this is the place to cut, by enacting firm payment limits – so much per farmer, and no more.

2. Excessive U.S. commodity subsidies hurt people in developing countries
Oxfam America estimates that U.S. dumping caused losses of almost $400 million between 2001 and 2003 for poor African cotton-producing countries, where more than 10 million people depend directly on the crop. In 2002, the U.S. government handed out $3.4 billion in total cotton subsidies, primarily in very large payments to a relatively small number of big producers. To put this figure in perspective, it is more than the total U.S. foreign aid given to sub-Saharan Africa that same year. It is also more than the gross domestic product (GDP) of Benin, Burkina Faso or Chad, the main cotton-producing countries in the region. Excessive U.S. cotton subsidies lead to overproduction and low prices, resulting in the biggest producers dumping their surplus production on the world market at prices well below true production costs. That hits hard in places like Mali, where the agricultural crisis is worsening. A typical small-scale West African cotton producer makes less than $400 a year on a crop. Dumped U.S. cotton undercuts local farmers and shuts them out of export markets that could provide needed cash income.

3. Excessive commodity subsidies hurt U.S. rural communities and the land
With a guarantee of virtually unlimited government subsidies, mega-farms have bid up land rents and purchase prices, closing off access to land for beginning farmers and other small and medium sized family farmers with limited equity. With no payment limit, government subsidies for the five favored commodity crops—corn, cotton, rice, soybeans, wheat—spur the overproduction of those crops, resulting in increased soil erosion and water contamination as well as low prices. Farmers who use multi-year rotations and incorporate resource-conserving crops like hay, rye, or a legume cover crop, or who move to rotational grazing of pastures for raising livestock, are penalized by losing commodity program payments, despite the fact that they are building soil and water quality through excellent stewardship.

Support Meaningful Payment Limits as a First Step to Farm Policy Reform

Even modest payment limit reform, such as the $250,000 payment cap proposed in the Rural America Preservation Act of 2005, will save $2 billion. Such an approach should be used to make sure that programs like the Women, Infants and Children (WIC) nutritional program and the Conservation Security Program (which is targeted to family farms and designed to reward stewardship of working farmland) are fully funded. We should cut the waste at the top, while keeping important farm support, nutrition, and conservation funding that helps millions of people and society as a whole.

FOR MORE INFO: Contact the Land Stewardship Project by calling 612-722-6377, or by mail at 2919 East 42nd St., Minneapolis, MN 55406. We’re on the web at www.landstewardshipproject.org.