US grain farmers snub agriculture plan

Grain industry leaders from Oregon, Washington and Idaho have sent an open letter to US President Obama on Tuesday (Mar 24), expressing their unhappiness at his proposal to cut payments to farmers in order to ease the national deficit.

The purpose of the five-year Farm Bill is to provide stability for producers, agricultural operations and the country's food system, therefore it would be unwise and unacceptable to remove this legislation before it is even fully implemented, the letter stated.

Earlier this month, Obama suggested stopping direct payments to farmers who make more than US$500,000 in annual gross sales, and impose a US$250,000 cap on federal payments and cut funding for the federal crop insurance programme. Direct payments now cost the US government US$5.2 billion per year.

The proposal will directly impact Eastern Oregon, where thousands of farms receive payments.

The plan was not well-supported, with at least 50 members of the Congress signing a letter of opposition.

Direct payments are necessary to shore up operating loans required to make a farm work, said Tammy Dennee, executive director of the Oregon Wheat Growers League.

She said a 3,000-acre farm could need more than one million dollars in loans, and a piece of equipment may cost as much as US$300,000. A farm with gross sales of US$500,000 may earn only US$30,000 a year or less, as there are many costs attached to a farmer, Dennee added.

The proposal would force small growers to sell to big growers who have the necessary financial power to run a farm, which in turn would accelerate the consolidation of the grain industry, said Travis Jones, executive director of the Idaho Grain Producers Association.

Losing direct payments will force some small grain farmers out of the industry, especially in view of recent drops in grain prices, according to Jones.