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March 09, 2009   Email to Friend 

Debra Davis
(334) 613-4686
March 09, 2009

The Obama administration's proposed budget would prohibit subsidies from going to farmers with sales higher than $500,000. The 2008 farm bill, signed into law less than a year ago, cuts off subsidies to farmers with adjusted gross incomes above $750,000.

Alabama Farmers Federation President Jerry A. Newby has sent letters of opposition to the plan to members of Alabama's congressional delegation. He is urging all Federation members to contact their U.S. Senators and Representatives and ask that they oppose the plan.

"Not only would these suggested cuts do very little to achieve actual budget savings, I believe they would actually harm our country's ability to feed and clothe its people by forcing more farmers to go out of business," Newby said in his letter.

Newby said the plan is not workable because this proposed lower limit of $500,000 on production sales is not a true measure of farm income. It fails to consider production expenses such as seed, fertilizer, feed, equipment costs, fuel and maintenance, he said.

"You can have production sales much higher than $500,000 and still lose money," Newby's letter stated. "The recently passed farm bill contains many significant reforms such as $750,000 in adjusted gross income, elimination of the three entity rule, and direct attribution of benefits to the producer. This lower limit would unfairly penalize small and medium-sized farms, not just large ones, since many of these farms have significant sales."

The proposed cuts in subsidies, along with new restrictions on crop insurance, have angered lawmakers in Congress on both sides of the aisle who battled for years to produce the 2008 farm bill. Many are annoyed that President Obama is bringing a debate to the forefront again that they believed had been settled.

Also, the proposal to eliminate cotton storage payments, while other commodities are getting storage payments, is unduly punitive, Newby said. It will result in less production and cause disruption in the orderly marketing of cotton, he added, and there were many reforms to the cotton program negotiated in the new farm bill.

"Cotton producers should not be asked to give up even more in this economy as they struggle to compete against their main competition, which is China," Newby said.

Farm programs took a $1.6 billion cut in the farm bill, as well as significant reforms to adjusted gross income limits and direct payment limits. They should not be asked once again to accept cuts when fully two-thirds of the USDA budget is for food and nutrition programs.

Federation members can contact their congressmen by clicking on the Action Alert on the Alfa Farmers Web site at www.AlfaFarmers.org.

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