An Urban's Rural View

The government giveth and the government taketh away. "Direct payments" have been nearing extinction for some time. Now they've become the first words many Washingtonians utter when asked for specific proposals for spending cuts.

In the latest example direct payments are, Politico's David Rogers reported, "back in play as a possible offset in sequester bargaining" (http://tiny.cc/…). With the dreaded sequester looming March 1 and the Republicans hanging tough, the administration is proposing cuts to head it off, and direct payments are at the top of the list.

In the farm bills the Senate and the House Ag Committee passed last year this subsidy bit the dust but some of its $5 billion a year cost was reallocated to new programs. Those bills died, and now you have to wonder if direct payments will just disappear, un-replaced.

Senate Ag Committee Chair Debbie Stabenow said she's been assured agriculture will get credit for the loss of direct payments when she and her colleagues get around to writing a farm bill. OK, but whether there's money for new programs will depend on how big a contribution to deficit reduction ag is asked to make. As of now, that's unclear.

Farmers were told direct payments would be paid this year as part of the extension of the 2008 farm bill through September. Maybe they will -- but can anyone be sure of it at this point? Farm lobbyists have already written off direct payments; they're increasingly worried about defending crop insurance.

Stabenow said she can't defend direct payments. That's understandable; they're hard to defend. Why, voters ask, should farmers receive subsidies even in years of high crop prices and good farm profits? That direct payments are at least more in line with international-trade rules than other farm subsidies isn't an answer that will win many voters over.

Especially if their source of information on the subject is, say, the New York Times. That esteemed newspaper referred to this particular subsidy the other day as "direct payments to agribusiness." Agribusiness? Well, of course. Isn't the family farm basically dead? Aren't most big farms "corporate farms?"

In Europe farmers get something similar to direct payments. The difference is they're obliged in return to use good conservation practices. The European program aims to be "green" in two ways -- environmentally sound and at the same time in conformance with the World Trade Organization's "green box" requirements protecting trade from distortions.

Would linking direct payments more closely to conservation practices work in the U.S.? We're unlikely ever to know. One way or another, direct payments look like they won't be with us much longer.

I'm not a particular fan of direct payments but it is tiresome watching them become a dead horse for politicians to beat. You have to wonder what the new dead horse will be once direct payments are gone.

Urban Lehner

urbanity@hotmail.com

© Copyright 2013 DTN/The Progressive Farmer. All rights reserved.