JESUP, Ga. — Sen. Saxby Chambliss warned Georgia growers Friday to brace for major cuts in crop subsidy programs as lawmakers fight to pass a new five-year farm bill through a Congress focused on shedding debt.
Addressing about 50 farmers at a forum in southeast Georgia, Chambliss predicted the Senate will pass a farm bill this summer that cuts about $23 billion in agriculture and food programs over the next decade. He predicted those cuts might not be deep enough to satisfy the House, which will have its own version.
“This is going to be by far the most difficult one to write and the process is not going to be pretty,” said Chambliss, a Republican member of the Senate Agriculture Committee.
One change Chambliss said is certain: Congress will eliminate direct payments that go to farmers regardless of crop prices and yields. The subsidy costs taxpayers about $5 billion each year.
Direct payments have been favored by cotton and peanut farmers, a major constituency in Georgia. But the federal budget crisis has made the subsidy almost impossible to defend, especially considering that American farmers are enjoying booming crop prices.
“This is probably the worst time in history to write a farm bill, because people think we really don’t need one,” said Zippy Duvall, the president of the Georgia Farm Bureau. “But we will see low prices again, and that’s why we need a good farm bill.”
Duvall and other farm advocates are telling their member growers that direct payments are off the table for the 2012 farm bill and they need to find a cheaper alternative that offers financial help when it’s needed during lean harvests and market conditions.
And Chambliss said point-blank he isn’t fighting to save the subsidy: “Direct payments are a thing of the past.”
A proposal favored by some lawmakers and commodity groups would replace direct payments with a new form of crop insurance tied to farm revenues.
Growers would receive payouts when poor prices or crop yields reduce their revenues by as little as 5 percent.
John McGuire, of the National Cotton Council, said his group is pushing that option, though, it “would not have been this industry’s first choice.” But he said keeping direct payments with drastically reduced funding wouldn’t have left farmers with enough of a safety net.
However, peanut farmers such as John Boddiford, of Sylvania, say they need subsidy options other than revenue-based crop insurance.
“I’m real concerned about putting all our eggs in one basket on an insurance program,” Boddiford told Chambliss. “None of the revenue-based programs are showing where they’re going to help farmers in hard times.”
Unlike commodities such as cotton and soy beans, which are traded in futures markets, peanuts are a much smaller farm segment with no source for predicting harvest prices. Peanut growers say that’s a major reason revenue-based insurance just won’t work for them.
Robert Redding, of the Southern Peanut Farmers Federation, said his group is lobbying for growers to have others subsidy options. Chambliss said he agrees there doesn’t seem to be a “one-size-fits-all program” to replace direct payments.
John Harris, a row-crop farmer who also raises cows, said he’s concerned lawmakers might target farm bill funding for agricultural research, which he said has been key to helping Georgia growers improve their yields.
“Without the research that goes on at our universities, farming is dead,” Harris said.
Charles Hall, of the Georgia Fruit and Vegetable Growers Association, said protecting federal grants for research and training are at the top of his group’s farm bill priorities, because the bulk of his members produce grapes, peppers and other specialty crops that don’t qualify for government subsidies. He said grant money from the current farm bill has helped pay for research into battling a watermelon disease that’s infected the crops of many Georgia farmers.