March 27, 2009 / 9:14 PM / 11 years ago

U.S. farm-cut fight far from over: Vilsack

WASHINGTON (Reuters) - The fight to cut U.S. farm subsidies is just beginning in Congress despite a committee vote against a $250,000 a year cap on payments, a limit supported by the White House, Agriculture Secretary Tom Vilsack said on Friday.

“Let’s see where things end up,” Vilsack said during an interview with Reuters. He said deficit hawks in Congress would press for cuts and there are many ways to reach the goal of focusing farm subsidies on family farmers.

“I think there will be discussions about crop insurance. There will be discussions about a wide range of things within the ag budget. The process is just starting.”

The White House says it wants to “close the loopholes that allow mega farms to get around payment limits.”

One step toward that goal, Vilsack said, was a plan announced on March 19 for the Agriculture Department to check with the Internal Revenue Service to see if people are eligible for farm payments.

“It’s going to be a relatively small number of people that are going to be checked,” said Vilsack. He put the figure at one-quarter of 1 percent of recipients. USDA says it will not receive actual tax data for a farmer.

But nine Republicans on the House Agriculture Committee say it is unfair that all farmers will be required to sign a waiver that allows the IRS to share information with USDA.

“Congress never intended such a blatant violation of privacy,” they said in a letter to Vilsack this week.

Farm groups have said little on the issue. It would be a black eye to appear to defend cheaters, said one lobbyist.

The 2008 farm law is the first to ban payments to the wealthiest Americans. It bars crop subsidies to people with more than $500,000 in adjusted gross income from off the farm. People with more than $750,000 AGI from agriculture are ineligible for the direct-payment subsidy.

President Barack Obama proposed $16 billion in cuts over 10 years in crop supports and crop insurance subsidies, including a $250,000 cap on annual payments.

There is wide opposition in Congress to the cuts. On Thursday, the Senate Budget Committee defeated a $250,000 a year cap proposed by Iowa Republican Charles Grassley.

While the Senate Budget Committee rejected a payment cap, it approved an amendment to reduce crop insurance outlays by $350 million over five years. It opens the possibility of a debate this spring on agricultural cuts, depending on the final terms of Congress’ spending blueprint.

Vilsack also said:

—the food safety group created by the White House should consider whether USDA should have stronger meat-recall power.

—he is willing to meet opponents of a mandatory traceback system. “We want a system that works,” he said. Participation is low in the current voluntary system.

—other nations must remove barriers to their markets if the United States is to support a world trade pact that would cut domestic farm subsidies.

Editing by Marguerita Choy

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