# Vanishing CRP - beginning of the end



## Springerguy (Sep 10, 2003)

Enjoy the good ole days of hunting while they last because it will not be the same when CRP goes away. It will be interesting to see what happens to the ag business as all of these programs are shut down over the next few years.

WASHINGTON - The deficit reduction plan President Obama introduced Monday will kill a farm subsidy that paid nearly $16 billion to Minnesota and North Dakota farmers from 1995 to 2010.

In addition, the president's plan shrinks federal contributions to crop insurance programs and a land conservation program in the states by tens of millions of dollars per year.

"We reform agricultural subsidies, subsidies that a lot of times pay large farms for crops they don't grow," Obama said.

The president was referring to so-called "direct payments" that go to farmers based on crops they planted in past years. The payments are automatic and don't depend on commodity prices or demand. Critics call the subsidies money for nothing.

"In a period of severe fiscal restraint, these payments are no longer defensible," a report from the White House said.

Advocates for Minnesota's farmers worry the president is trying to poke a hole in a critical safety net.

"Farmers need a way to take on the risk of farming," said Stacy Stout, associate director of public policy for the Minnesota Farm Bureau. "We're willing to take our share of cuts, but we don't want it to be disproportionate."

The idea of agricultural cuts is not new, but the political atmosphere has changed. Funding that benefits various special interests is more vulnerable as lawmakers wrestle with the stronger mandate to reduce the deficit.

Obama has proposed a total of $3 trillion in deficit reduction with roughly $2 trillion coming from cuts and $1 trillion from revenue increases. The president has asked the congressional supercommittee charged with deficit reduction to add his $3 trillion goal on top of the $1.2 trillion the committee was already supposed to cut.

The supercommittee, which was formed as a compromise during the debt ceiling debate, must come up with cuts and revenue increases by Thanksgiving, and Congress must approve them by year's end. Otherwise, automatic cuts to domestic and defense programs would take effect.

Minnesota, N.D. subsidies

Minnesota ranks fourth in the country in farm subsidies and North Dakota ranks seventh, according to the Environmental Working Group. The advocacy group, which stresses conservation and pollution control, maintains a national database of farm subsidies.

Direct payments accounted for $9.85 billion of the $15.2 billion in agricultural subsidies Minnesota farmers received from 1995 to 2010. During the same period, $6.09 billion of the $12.9 billion in subsidies to North Dakota farmers were direct payments.

"Direct payments are the sitting ducks," said legislative analyst David DeGennaro of the EWG.

Officials at two of Minnesota's largest recipients of direct payments - Molitor Brothers Farm in Cannon Falls and Hector Farms Partnership II in Hector - declined to comment.

Nationally, Obama estimates $3 billion a year in savings by killing direct payments to farmers. Across the U.S., $167.3 billion was paid out in direct payments from 1995 to 2010 - more than 60 percent of the $261.9 billion in agricultural subsidies paid out nationally.

Also likely to be reduced by $200 million per year is a program to conserve agricultural land from cultivation. The White House says reductions in government support for crop insurance can save another $830 million a year.

"The agriculture piece is certainly larger than people expected," said Sam Willett, public policy director of the National Corn Growers Association. But what distinguishes Obama's proposal from earlier calls to end farm subsidies is the "compressed period of time" in which big decisions must be made, Willett said.

Rep. Collin Peterson, a Democrat who represents Minnesota's farm-rich Seventh Congressional District, said farmers are being asked to do more than their share. Peterson predicts that companies will stop offering crop insurance policies if the cuts go through.

"I'm very opposed to cutting more from crop insurance," he said. "We took $12 billion out of it already [in the 2008 farm bill]."

Still, Peterson said he understands the president's proposal to eliminate direct payments. "I've been telling people for years that they are not defensible," he said.

Farm income up

The White House said more than 50 percent of direct payments go to farmers with more than $100,000 per year in income, and noted that net farm income, adjusted for inflation, was higher than it has been in 35 years.

Crop insurance companies enjoy an annual return on investment of roughly 14 percent because of taxpayer subsidies, the White House said. Obama's plan cuts that return to 12 percent per year. It also requires farmers to pay higher crop insurance premiums if the government now pays more than 50 percent of their premiums. Nationally, the White House says the average U.S. farmer pays only 40 percent of his or her crop insurance premiums, with taxpayers picking up the balance.

While all that may be true, Peterson said the president's proposal puts farmers in a strange predicament: They would suffer fewer program losses if the supercommittee gridlocked and the automatic cuts took effect.


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## AdamFisk (Jan 30, 2005)

This is just a spit in the bucket, along with many other factors all contributing to the beginning of the end.


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## AdamFisk (Jan 30, 2005)

This fits well in this thread.....



> Just getting started': Helms gives stats at Petroleum Council meeting
> 
> MEDORA - The director of North Dakota's Department of Mineral Resources had every reason to be upbeat Wednesday during the annual meeting of the North Dakota Petroleum Council in Medora.
> Business is booming like never before in the oil zone, and Lynn Helms enjoys a good relationship with the industry whose representatives were lined up 350 deep at banquet tables in the Medora Community Center on Wednesday.
> ...


http://bismarcktribune.com/news/state-a ... 002e0.html


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## indsport (Aug 29, 2003)

the problem with the CRP and Land and Water Conservation fund budgets is the House Republican's bill cut a much higher percentage of these programs (LWCF was 100% cut) compared to the subsidies that go to industrial corporate agriculture that were cut less than 30%. That makes me wonder about the priorities of the elected representatives in the House of Representatives. If the budget is any indication, the House prefers corporate agriculture to sportsmen and sportswomen. BTW, I didn't get any response from Congressman Berg's office about this difference. Second, if it is true that farmers are only paying 40% of their crop insurance costs, why should I pay 100% of my car insurance and home insurance? Shouldn't the free market on insurance be the same across all insured?


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## zzyzx (Mar 20, 2010)

I am all for cutting payments to Farmer IF... they get a much bigger piece of the financial pie for the crops and livestock they raise. If they could hold back crops until the prices were high enough for a profit(figuring in the years of low yield and failures) and were paid what it really costs plus some profit I doubt many would complain.

In our area many have stopped raising sunflowers due to blackbirds decimating the fields.
A pair of geese on the pond in the field will clear an acre of crop. Figure Wheat at $10 a bushel with 50 bushels to the acre and you have ten pairs of geese along the ponds - it gets to be an expensive crop loss.

The farmer gets a very low percentage of the final price of food in the stores. When consumers start paying $11 for a loaf of bread so the farmer is getting enough to do well, make his payments, save for the kids college, medical insurance and retirement... who will care what Washington does?

As it is now the Congressional types(too many of them) believe food comes from stores, not farms.

Then again, how bright can someone who spends up to 5 Million $$$ to get a six year job paying less than 200 thousand $$$ a year be? And we wonder why they can't balance a budget?

Make farming an honest Free Market enterprise and watch the shortages in the grocery stores.


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## dakotashooter2 (Oct 31, 2003)

Just and observation but I have been watching a few CRP plots that have been tilled under. So far it seems like the farmers have had to work it anywhere from 5-6 times to get it ready for planting. I suspect it may take them at least 3 years to recoup those costs and start making any profit.


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## Plainsman (Jul 30, 2003)

zzyzx, I agree with you.

I think no matter who wins the next election agriculture is going to see some huge hits. They have had some great years as of late, but unfortunately I think that's coming to an end. Unfortunately farm organizations have done a terrible job at public relations. As a matter of fact I think they have killed a lot of support for agriculture. It leaves me with mixed feelings and at a loss of what the right thing to do is. More thought I guess.


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## dakotashooter2 (Oct 31, 2003)

And sadly it will probably mean even more posted land ...at least for deer hunting. With less habitat farmers are going to post up everything they have just to up their own odds.


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