* Proposed farm cut is 20 percent, CBO data indicate
* House Budget panel aims at $5 bln/year "direct payment"
* Farm supports equal 10 percent of net cash farm income
By Charles Abbott
WASHINGTON, April 5 The House Budget Committee
Chairman proposed to slash farm spending by $30 billion over 10
years in a package unveiled on Tuesday as part of his
controversial plan to tackle the giant federal budget deficit.
Wisconsin Republican Paul Ryan called for a reduction in
the $5 billion-a-year in "direct payments" made to growers each
year regardless of need. The payments are based on past
production of grain, cotton and soybeans.
"Second, reform the open-ended nature of the government's
support for crop insurance, so that agricultural producers
assume the same kind of responsibility for managing risk that
other businesses do," said the Budget Committee proposal,
promoted by Ryan.
"These reforms will save taxpayers nearly $30 billion over
the next decade," it said.
Overall, Ryan proposed nearly $6 trillion in savings over
the next decade, with huge cuts in Medicare and Medicaid
programs. Ryan unveiled his plan while House Republican leaders
and the White House fought over spending cuts for this year.
The government could shut down if there is no agreement by
The cuts in farm subsidies and crop insurance would equal
20 percent of projected spending on them, according to
Congressional Budget Office figures.
They would not take effect until an overhaul of U.S. farm
law, scheduled for 2012, is completed. That will give the
Agriculture Committee flexibility in writing the new farm law,
said the Budget Committee.
Oklahoma Republican Frank Lucas, the Agriculture Committee
chairman, said the Budget proposals "are simply suggestions."
"At the end of the day, members of the House Agriculture
Committee and I will write the next farm bill," said Lucas.
Farmers are enjoying boom times, an ideal moment for reform
of "numerous overlapping" farm supports, said the Budget
Direct payments, created by the 1996 Freedom to Farm law,
are a popular target for deficit hawks, reformers and farm
activists. Among main-line farm groups, there are suggestions
to move the money into revenue assurance programs.
Payments by the government to farmers amount to 10 percent
of net cash farm income, an USDA gauge of solvency.
Public nutrition programs such as food stamps, nearly
two-thirds of the USDA budget, would also face cuts of 20
percent and land stewardship would be cut by 25 percent, said a
Food stamps would get the same types of reforms as welfare
did a decade ago, said the Budget Committee, such as
"encouraging work, limiting the duration of benefits, and
giving states more control over the money being spent."
Food stamps, formally named Supplemental Nutrition
Assistance Program, are forecast to cost $80 billion this year.
Enrollment is a record 44.2 million people, or one in seven
(Reporting by Charles Abbott; Editing by Alden Bentley)