Farm Lobby Beats Back Assault On Subsidies

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Farm Lobby Beats Back Assault On Subsidies

• MEAK
• Matt Kaufman, Eric Koziel,
• Anca Istoc, Kevin Lawson

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Subsidies Crisis

• Farm subsidies in danger of cuts
• Farm incomes high
• Grain prices up
• Federal budget deficit
• Major proposed cut shot down
• Would have decreased subsidies by 10 bil over 5
  years

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Farmers Prosperous

• High global demand for grain
• Spurred prices by 2.20 since 2006
• Farm income up
• Biofuel demands, rising middle classes around
  globe
• Projected income of 92.3 bil
• Subsidy would grant an additional 13 bil

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Distributed Funds

• Why Subsidies?
• Helps to stabilize grain prices
• Makes products more competitive
• Provide abundant food supply
• Why Change?
• Too much going to farmers
• Could be spent on other ventures
• Farms doing fine without the aid
• Create a more balanced federal budget

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Farm Bill

• Main piece of legislation governing subsidies
• The Farm Bill is a success
• 80 mil was spent for lobbying the bill in 2007
• Renewed every five years

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Farm Bill (continued)

• The Bill in the past
• Introduced in 1930s
• Was intended for only farmers
• Present day
• It has unnecessary programs
• Farmers are less than 1

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Agriculture in the Economy

• Agriculture and related industries contribute
  nearly 5 of Americas annual gross domestic
  product
• Costs for seed, land rent and fertilizer have
  been rising swiftly
• In 1996 the Freedom to Farm Act was passed

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Agriculture in Politics

• Emergency relief bills were passed and by 2002
  thought of big changes in farm relief were off
  the agenda
• The success of Americas farmers and ranchers is
  essential to the success of the American economy
• In 2007 as democrats took power on Capitol Hill,
  there were proposed big cutbacks in farm
  subsidies

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Proposed Breaks

• The goal was to give more benefits to farmers who
  really needed it not the well to do farmers
• Bush proposed to end payments to producers with
  incomes greater than 200,000. The law at the
  time was 2.5 million.

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Results

• The income limit on payments is now 1 million
  down from 2.5 million
• The limit is 500,000 for beneficiaries who dont
  earn at least two thirds of their income from
  farming.
• Support for subsidy programs still remains

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Laying Down the Law

• Chairman Peterson
• Made sure more money was added to nutrition and
  conservation
• Unstoppable Farm Lobby
• When groups saw the farm lobby wasnt going to be
  stopped, they changed from pushing for change to
  wanting a peace of the pie.
• United Fresh Produce Association
• Likely to win specialty-crop producers up to 2.2
  billion in aid
• Black Farmers Association
• Support the overall bill in return for language
  helping members receive settlement money from
  Agriculture Department in a discrimination
  lawsuit

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Politics

• House Bill passed by vote of 231-191
• Senate Bill
• Passed in December
• Eventually ratchet income cap to 750,000
• Bar farmers from collecting multiple payments
• Key members of House Senate to negotiate
  compromise package by Mid-April

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President Bush

• Threatens to veto both bills
• Dangling prospect of 10 billion in new spending
• If he gets congressional support for more
  aggressive changes
• White House suggested raising proposed income cap
  to 500,000 from 200,000

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Thanks for watching!

• Original Article Farm Lobby Beats Back Assault
  on Subsidies, by Lauren Etter and Greg Hitt,
  March 27 Wall Street Journal.
• Questions?