Direct payments criticized at farm bill hearing
Farm and Ranch May 18, 2010 Ag experts from some key universities told the House Agriculture Committee last week that conventional farm bill policies need restructuring in the 2012 Farm Bill, especially with the ongoing budget and economic situation. Iowa State University’s Bruce Babcock told the committee the current mix of crop insurance, direct payments and other supports is not cost effective. Babcock says direct payments are difficult to defend. Babcock: “There has been widespread distaste for government bail outs of big banks, GM, Chrysler and AIG. But there are arguments that can be made to justify those interventions to forestall a more severe economic downturn. In contrast farmers receive five billion dollars a year for nothing more than owning or renting farmland that happens to have base acres.” Dr. Otto Doering of Purdue University also criticized direct payments because they produce what he calls a; Doering: “Negative perception of taxpayers with respect to the cost of direct payments and it doesn‘t deal with volatility. I think we are going to have to look seriously I would argue at folding down or discontinuing direct payments.” Supporters of the direct payment, like wheat grower organizations, argue that the payment offers certainty and complies with international trading rules. I’m Bob Hoff and that’s the Northwest Farm and Ranch Report on Northwest Aginfo Net. ? ?
Babcock: “Crop insurance fails I think the cost effectiveness test because it simply makes no sense for taxpayers to spend 13 billion dollars to deliver six billion dollars in net payments to farmers.”
