This from AP
======
WASHINGTON (AP) -- A new program that will let farmers skirt
restrictions on crop
subsidies could mean millions of dollars going to as
many as 2,600 of the nation's
biggest producers.
Farmers who have reached the payment limit will be
allowed to take crop subsidies in
certificates, instead of cash, which they can redeem
for government-held commodities.
The program effectively abolishes the current
$150,000-per-farmer limit on crop
subsidies, which already was doubled from $75,000
last year, critics say. The subsidy
program pays farmers the difference between the
market price of major commodities
and government-set minimum prices.
"What it comes down to again is that we're going to
subsidize some of the biggest
farmers in the country to drive others out of
business," said Chuck Hassebrook,
program director of the Center for Rural Affairs in
Walthill, Neb.
Among operations that stand to benefit most,
according to Agriculture Department
officials, is cotton giant J.G. Boswell Co., which
controls an estimated 160,000 acres in
California's San Joaquin Valley. At current subsidy
rates, a cotton farm can reach the
$150,000 payment limit with fewer than 1,000 acres.
All major commodities would be
eligible for the certificate program.
Congress authorized the program last fall, and
Agriculture Secretary Dan Glickman
said Monday that he agreed to implement it under
pressure from lawmakers. "The
certificate program is one that the Congress is very
clear they want," he said.
Glickman's advisers said he had little choice but to
approve the program, given the
bipartisan congressional support for it and the
possibility that farmers facing the
payment limit would otherwise forfeit up to a million
bales of cotton to the government
this year.
USDA rules allow farmers to put crops under
short-term federal loans and forfeit the
commodity to the government instead of repaying the
loan. Farmers would make a
profit off the forfeiture _ which doesn't count
toward the $150,000 subsidy limit --
because the market value of the crop is less than the
value of the loan.
The National Cotton Council, which led lobbying for
the certificate program, argued
that it would provide for a more orderly marketing of
the cotton than dumping it on the
government, which would have sold it later, possibly
depressing prices. The
government also would save on storage costs.
"From our perspective the best bet for all producers
is to get the cotton out into the
market," said Bill Gillon, a spokesman for the cotton
group.
Instead of agreeing to issue the certificates,
Glickman should have tightened the loan
program to make it less advantageous for farmers to
forfeit their crops, Hassebrook
said.
Glickman's decision comes when he is pushing Congress
to put more restrictions on
government farm payments and target assistance to
small and medium-sized aid.
Keith Collins, USDA's chief economist, acknowledged
that the certificate program
would do just the opposite. "There's no doubt it's a
concern. Here the secretary has
been advocating a tight payment limit," he said.
Copyright 2000 The Associated Press.
To Unsubscribe: Email majordomo@ces.ncsu.edu with the command
"unsubscribe sanet-mg". If you receive the digest format, use the command
"unsubscribe sanet-mg-digest".
To Subscribe to Digest: Email majordomo@ces.ncsu.edu with the command
"subscribe sanet-mg-digest".
All messages to sanet-mg are archived at:
http://www.sare.org/san/htdocs/hypermail
This archive was generated by hypermail 2b29 : Sun Mar 12 2000 - 14:00:25 EST