May 8, 2006

“Green” pay, not crop subsidies, US activists ask

By Charles Abbott

WASHINGTON (Reuters) - The outmoded U.S. crop subsidy
system should be replaced by a farm safety net that pays
farmers and ranchers for land stewardship and protects their
income through crop insurance and similar devices, an activist
group said on Monday.

The federal government spends about $20 billion a year on
farm subsidies under a law due for overhaul by Congress in
2007. Mainline farm groups support a continuation of the 2002
law, which boosted crop supports sharply.

Congress would be wiser if they scrapped a crop subsidy
system that dates from the Depression era, said the American
Farmland Trust. But whether lawmakers will listen is unclear.

"The first thing you need to do is put the best ideas on
the table," said AFT president Ralph Grossi when asked about
the chances for success.

"It is going to be tough," said Dan Glickman, agriculture
secretary in the Clinton era, who supports the AFT plan.
Another former farm policymaker, Clayton Yeutter, agriculture
secretary in the late 1980s, said U.S. farm policy must
transform to meet modern-day needs.

By focusing on stewardship, the AFT plan will "justify a
flow of federal dollars to rural America for years to come,"
said Yeutter.

AFT proposed a two-part safety net. Some $5 billion a year
would be paid to farmers and ranchers who practice land, water
and wildlife conservation on their land. The second part of the
net would be programs to assure farm income, such as crop and
revenue insurance.

The "green" payments would replace the annual payments now
guaranteed to grain, cotton and soybean farmers. The risk
management programs would replace the income supports now
provided by marketing loans and counter-cyclical payments,
totaling about $9 billion this year.

There also would be larger spending in cost-sharing land
and water conservation programs and a new $1 billion grant
program for more healthful diets, rural economic development
and more biofuels.


Grossi said the plan would spend as much as the current
farm program but aid would be offered to all farmers and
ranchers, not just the grain, cotton and soybean farmers who
now collect the bulk of the money. And the plan would satisfy
world trade rules, he said.

But some growers would receive less money under the new
approach. Cotton and rice growers would be most at risk.

"It is difficult to design a program that would make those
growers whole," said Grossi.

By coincidence, AFT unveiled its plan on the same day
Agriculture Secretary Mike Johanns released an Agriculture
Department analysis of risk management issues for farmers. Risk
management is a broad category that ranges from
forward-contracting of sales and use of futures markets to crop
insurance and tax-deferred "rainy day" accounts.

While the analysis included some policy options, USDA did
not make recommendations for the upcoming debate in Congress on
farm policy.

The House and Senate Agriculture committees are holding a
series of hearings to gather thoughts from producers about the
farm program, which dates from the 1930s. Hearings will be
devoted later this year to farm-group proposals. Drafting of
the new farm law was expected to begin in early 2007.

The House Agriculture Committee said producers could
register their views by a form that could be accessed at or directly at

AFT said its proposal was available at

USDA said its risk management paper was available at