January 11, 2010 / 10:41 PM / 9 years ago

U.S. budget cutters eyeing farm aid -ex-lawmaker

SEATTLE, Jan 11 (Reuters) - A Texas Democrat who used to be a leader of fiscal conservatives in the U.S. House of Representatives told big farm group on Monday that Congress members keen to cut federal spending will look at U.S. farm supports.

“All of us in agriculture recognize the fiscal challenge to come,” said Charles Stenholm, a senior advisor at a Washington consulting firm who represented a west Texas district for 26 years. He spoke at a “break-out” session at the American Farm Bureau Federation meeting.

Stenholm, who is active in balanced-budget groups, declined to suggest specific areas to be targeted but said it could be hard to defend biofuel supports and grain subsidies. He said farm supports and crop insurance may need revisions to stretch funding.

Stenholm said economic recovery “is one thing that will save Democrats” from stinging losses in the mid-term elections this fall.

The Obama administration was expected to release its proposals for the fiscal 2011 budget in coming weeks. There were reports a spending freeze or cuts might be asked many agencies to constrain the federal deficit.

A year ago, Obama unsuccessfully proposed a $250,000-a-year limit on farm subsidies and a phase-out of the “direct payment” subsidy to farmers with more than $500,000 a year in sales, together saving $1 billion a year. The White House also wanted to reduce crop insurance subsidies by $500 million a year.

Rep. Collin Peterson of Minnesota, House Agriculture Committee chairman, plans to begin hearings early this year on an overhaul of U.S. farm policy due in 2012. The hearings will explore successes of the 2008 farm law and new ideas in farm policy.

“That is where the chairman is exactly right,” said Stenholm. He said adaptations in farm programs will “be forced on us by the budget.”

Topping the agenda for the Senate Agriculture Committee are renewal of child nutrition programs, action on financial regulatory reform and enactment of disaster relief due to harvesttime storms in 2009 in the South and Midwest.

Stenholm’s service in Congress ended in 2005. He was prominent among “boll weevil” Southern conservative Democrats in the 1980s and later was co-chair of the Blue Dog fiscally conservative Democrats. (Reporting by Charles Abbott; Editing by David Gregorio)

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