WASHINGTON – Trying to tighten the federal budget, the Bush administration on Wednesday proposed to reduce farm spending by $18 billion over the next five years.
Agriculture Secretary Mike Johanns is not seeking major changes in the nation's farm subsidy program, which major farm groups and lawmakers in Congress want to retain.
"I believe so strongly in what farmers said," Johanns said, describing forums he held in dozens of states. "They like the structure of this farm bill, but they have a big vision for the future."
However, there is one big change: The administration is seeking to eliminate farm payments for wealthy producers, limiting subsidy payments to those making less than $200,000 in adjusted gross income annually. The current income cap is $2.5 million.
That would rule out payments for about 80,000 producers who currently are eligible, officials said. Those producers collect about 4.5 percent of overall farm payments. The limit on payments would save an estimated $1.5 billion over 10 years.
"I don't know if there is anywhere in the country you can go where $200,000 adjusted gross net income is not a lot of income," Deputy Secretary Chuck Connor said. "You're the richest guy in the county."
Lawmakers are anticipating having fewer dollars for farm programs when Congress writes a new farm bill this year. President Bush has promised to balance the budget within five years, and the Democratic-run Congress is insisting on budget cuts to pay for new spending.
The farm bill — really a series of federal programs — gives farmers payments and other help to supplement their incomes, support crop prices and manage supplies.
Johanns' plan would cost $87.3 billion over the next five years, not counting food stamps and other nutrition programs, compared with $105 billion spent on farm programs over the past five years.
Most subsidy payments go to growers of five major crops — corn, soybeans, wheat, rice and cotton.
The administration proposes to:
—Reduce support from loan programs and boost direct payments, particularly for cotton growers, who depend more on the loan programs.
—Keep a target-price program that pays farmers when prices are low — but link it to revenues instead of crop prices.
—Keep dairy and sugar programs that limit supplies to support prices.
—Eliminate a prohibition that keeps fruits and vegetables from being grown on land where subsidized crops are grown; double purchases of fruits and vegetables for school lunch and other nutrition programs.
The current farm bill written in 2002 expires at the end of this year.