“Everybody needs to share,” Rep. Tim Huelskamp told a few dozen townspeople sitting patiently on the hard wooden benches of the Graham County Courthouse. “If you’re a farmer like me, you’re going to expect less. Something’s going to go away. The direct payments are going to go away.”
Huelskamp appears to be right. Dramatically cutting or eliminating direct crop subsidies, which totaled about $5 billion last year, has emerged as one of the few areas of agreement in the budget talks underway between the White House and congressional leaders of both parties.
In their recent budget proposals, House Republicans and House Democrats targeted farm subsidies, a program long protected by members of both parties. The GOP plan includes a $30 billion cut to direct payments over 10 years, which would slash them by more than half. Those terms are being considered in the debt-reduction talks led by Vice President Biden, according to people familiar with the discussions.
“There’s no sacred cows anymore,” Sen. Charles E. Grassley (R-Iowa), a farmer who represents one of the nation’s biggest farming states, said in April in a conference call with Iowa reporters. “The bottom line is, ag should be cut like everything else, but no more than anything else. I think direct payments will be done away with.”
President Obama has also taken aim at farm subsidies, with a plan to scale back payments to farmers with incomes of more than $250,000 a year. These talks come as Congress separately begins crafting a new farm bill, which is passed about every five years and sets the terms of the government’s agricultural programs.
So far, the plans spare the agricultural program that farmers and their backers in Congress say is the most essential: insurance to help growers if they have a bad yield or lose crops because of extreme weather, such as a tornado or drought.
“Crop insurance is really key to making sure that they can manage their risks,” Rep. Kristi L. Noem (R) recently told reporters. She represents South Dakota, another large farming state, and her family owns a ranch that receives direct subsidies. “So we’re going to make sure that that program remains viable and a useful tool for them.”
Although no budget deal has been reached, senior officials on Capitol Hill and at the Agriculture Department said they are operating under the assumption that, at a minimum, direct payments will face major reductions.
At a Senate hearing in May, Agriculture Secretary Tom Vilsack told lawmakers that the department is “prepared to do as much as we can with fewer resources, but there is no doubt that cuts will have a real impact on American agriculture and on American people. There will be pain, and everyone will have to sacrifice something.”