Farm bill proposal sets off alarm bells

WASHINGTON -- A Midwest senator's plan to overhaul agriculture policy by phasing out federal crop subsidies has set off alarm bells in the nation's cornbelt even as it wins praise from the Bush administration.

Under the proposal by Indiana Sen. Richard Lugar, the Senate Agriculture Committee's senior Republican, farmers would buy insurance to guard against drops in income, rather than rely on government handouts.

For a state like Illinois, where farmers have grown increasingly reliant on subsidy payments during times of low commodity prices, the proposed reform is seen as a direct hit on people's livelihood.

"I think it's troubling because it removes the safety net," said Assumption farmer Leon Corzine, immediate past president of the Illinois Corn Growers Association. "We want to get into a position to not count on the government, but we're just not there yet."

State Rep. Chuck Hartke, a Teutopolis Democrat who is a member of the Illinois House Agriculture Committee, emphasized that federal subsidies must continue while crop prices are low.

"Farmers are going to continue to go broke if they don't get support," said Hartke, who has an 800-acre corn and soybean farm.

'Not only farmers' income'

Mike Williams, chief policy analyst for the Illinois Department of Agriculture, said the state's farm sector is uncertain at best about provisions in Lugar's plan and far more comfortable with a competing proposal that advanced out of the House earlier this month.

"The concern we have is the reduction in program payments and the impact on rural areas," Williams said. "It's not only farmers' income. The income farmers get paid gets spent in rural areas."

The House bill would extend farm programs for 10 years. Lugar proposes a five-year, $82 billion deal with reduced assistance to grain and cotton growers and higher or new subsidies for farms that raise fruit, vegetables and livestock.

Bob Hauser, a professor at the University of Illinois' Department of Agriculture, said the long-term effect of Lugar's plan on Illinois was unclear.

"I think it'd provide less income support in the short term," he said. "It's focusing much more on helping farmers manage risk than it is keeping income at a certain level. The House bill represents a level that's very similar, if not higher, than where we are now."

Preliminary figures show the House program may provide a few dollars more per acre to Illinois' farmers than the $80 to $90 an acre they have received in the last two years, he said.

$2.3 billion in payments

In the past year, Illinois farmers collected $2.3 billion in payments from various farm programs, whether fixed payments based on how many acres they have in agriculture or money paid when the market prices for their crops are too low to make ends meet.

A review of U.S. Agriculture Department records by The Associated Press found that 63 percent of farm subsidy payments nationwide went to just 10 percent of farmers. Lugar's plan seeks to address concerns from some farmers and watchdog groups that a more equitable deal needs to be implemented to accommodate taxpayers and more farmers.

But farmers like Hartke, who note that many corporate farms are merely family-run enterprises, see reform efforts as misguided.

"It sounds good to blast the big guys in the papers, but they're receiving the low commodity prices as well," he said.