Debate Heats Up Over Direct Payments

If direct payments were written out, would counter-cyclical and loan deficiency payments be an adequate safety net?

Legislators putting together the 2007 Farm Bill are working with a tight budget, so to add a new program means to take from another. One area that money could come from is the $5 billion in annual guaranteed direct commodity payments.

Anti-subsidy advocates speaking in Washington Monday say that even if grain, cotton and soybean growers did not receive direct payments, countercyclical and loan deficiency payments would provide a "true safety net."

Scott Faber of Environmental Defense calls direct payments a "vestigial organ" of ag policy, and he, Iowa State University economist Bruce Babcock, and other speakers suggested money should be taken from direct payments to fund farm policy reforms.

USDA Secretary Mike Johanns disagrees. The administration's 2007 Farm Bill proposals included an additional $550 million for direct payments, instead trimming other crop supports.

Johanns says direct payments would be much less likely to interfere with World Trade Organization negotiations than price supports linked to a specific crop.

TAGS: Soybean USDA
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