Gross Sale Out

February 27, 2009

WASHINGTON (Feb 27, 2009)—While big businesses ranging from insurance giants to banks, car companies, investment houses, and construction firms are raking in hundreds of billions in taxpayer dollars, the men and women who feed and clothe the country received some unwelcome news yesterday from President Barack Obama.

In the President’s proposed budget, farmers with more than $500,000 in gross sales were told they would no longer be eligible to receive a chunk of the farm bill’s safety net.

This means test would hit the farms that produce 75% of the country’s food and fiber. The farms that would not be affected by the plan are mostly specialty, hobby, and retirement farms run by people who rarely consider farming to be their main profession.

In Dallas, Tex., where thousands of the nation’s soybean, wheat, and corn farmers are meeting at the annual Commodity Classic, confusion and anger filled the convention hall.

“Certainly he means income, not sales,” was a common statement. Other common themes discussed included:

  • “CEO’s worth millions who drove their businesses into the ground can get bailed out and still make $500,000 a year, and I’m singled out for selling $500,000 worth of goods.”
  • “Why are people who make bad loans more important than farmers? We can live without sub-prime ARMS, we can’t live without food.”
  • “I don’t know a farmer this wouldn’t hit.”
  • “Didn’t we already make huge cuts in the farm bill?”

Growers were particularly worried about the proposal as tough times are building in rural America with falling commodity prices and high input costs.

The response from the nation’s farming trade associations to Obama’s plan was swift and severe.

The USA Rice Federation said that the plan “effectively puts at risk a majority of the food, feed and fiber supply in this country by exposing [farmers] to the uncertainties of weather, market swings and financial instability without the safety net that direct payments provide.”

They note this plan would hit most rice farms of 750 acres or more, which is “not a ‘large agribusiness’ by any stretch of the imagination but rather a typical family farm.”

The National Association of Wheat Growers, American Soybean Association, National Sorghum Producers, and National Corn Growers Association released a joint statement from the Commodity Classic show reiterating the importance of the farm bill safety net.

Leaders from the four groups—whose members account for nearly 90% of the crop acreage in America—said, “Production agriculture is a volatile business, and a workable farm safety net is vital to the security of our industry. The continued production of an abundant, affordable and safe food and feed supply for Americans and all those we export to around the world will be affected if this safety net is changed. The purpose of a five-year farm bill is to provide stability to producers, agricultural operations and the food system. The 2008 bill should not be reopened before it expires in 2012.”

“It is important to point out that sales above $500,000 do not equate to a measure of profitability,” the National Cotton Council explained in a release slamming the proposal. “Today’s farms bear extraordinary short-term and long-term expenses. Given the current uncertainty in credit markets, the direct payments are critical to a producer’s ability to secure financing.”

“The budget proposal overlooks the fact that American farmers and ranchers are sharing in the pain of the current economic crisis and threatens to further undermine the U.S. agriculture economy and jobs,” added the Minnesota Corn Growers Association.

Luckily for farmers, the proposal, which would require Congressional approval, has proven to be just as unpopular on Capitol Hill with Republicans and Democrats from rural America—marking one of the first items of the year that many politicians actually agree on.