Farm Subsidies Could Be Cut

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President Bush's proposed trillion dollar budget is raising the eyebrows of some farmers. That's because it proposes cutting farm subsidies. Most subsidies are paid to large farm operators growing crops like rice, cotton, and grains.

Joe Outlaw, works on an Agriculture committee with Congress on the national budget, he says the committee has been expecting these cuts for months, but they're looking to make them less painful for farmers.

"The reality is there is going to be a cut, so yes it should be something they are concerned about. But the way cuts are specified in the President's language of his proposal would be worse for Brazos Valley farmers than what would be likely to happen." says Outlaw.

The current maximum a person can be paid is $360,000 a year. But there are loop holes that can hike the figure up to over a million dollars. The Bush plan would cut them to no more than $250,000 a year.

Outlaw says this is just a starting point of committees debating on where to make the cuts. They would affect cotton and rice producers more than any other crop.

"What we have is a situation where farmers and times of low prices get support. But when prices go high, the government support goes away and that's basically the system we have and the proposal by the President would take some of that support away," says Outlaw.

Producers rely on the government payments, especially when prices are low and the government makes up the difference.

"All this is saying is going to make up less of a difference and so it would hurt bottom lines and financial status," adds Outlaw.

Besides the cuts in farm supports, the USDA budget calls for changing the crop insurance program to save millions through smaller reimbursements to sale agents and insurance companies. But growers once again would be required to buy crop insurance to qualify for crop subsidies.