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Big change to farm subsidies

Nancy Marshall-Genzer Mar 11, 2015
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Washington lobbyists and think tank-types are tearing apart the Farm Bill, trying to figure out how far Congress was off in budgeting for the subsidies the new bill ushered in.

“For major crops like corn we would expect payments to be double what they expected: $6.5 billion” says Vince Smith, an economist at the American Enterprise Institute and Montana State University.   

Farmers used to get the same, direct payment every year. Now they’re offered a choice of two subsidies. One kicks in when their revenues per acre drop, the other is tied to crop prices. If the price of, say, corn, falls below a target the government makes up the difference. 

But critics like say the targets were set too high. They say prices are falling more than Congress expected, and don’t have to fall much, for the subsidies to kick in.

“They look like a safety net even though they’re more like a trampoline, when you really stop and think about it,” says Scott Faber of the Environmental Working Group, or EWG.

Plenty of people in Washington have been thinking about it.  But the nation’s capital can be something of a bubble.  I wanted to break through the bubble, and hear from someone who’s actually living with the new subsidies I head to Robb Ewoldt’s farm, in Eastern Iowa. 

I meet him in his repair shop.

“We grow corn and soy beans.  We grow alfalfa grass, alfalfa hay and kids,” he says, laughing. (Ewoldt is a father of two.)

He thinks taxpayers will actually save money under the new subsidy system. Before, he got a government payment even if he was selling his corn at record prices. 

“I think this will be a little bit more fair for the taxpayer because the money’s going to come when we are in pretty tough shape,” he says. “When we need it.”

Ewoldt says most farmers are independent. They don’t like taking the subsidies, but they need them to get through the tough times, he says.

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