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Farm bill negotiators emerged from closed door meetings Wednesday giving few details about a brokered deal on the 2008 Farm Bill. However, Sen. Chuck Grassley, R-Iowa, who has pushed hard for payment limits over the years stated later that the agreement includes a $750,000 cap on direct payments if a farmer receives two-thirds of his or her income from farming. Those with adjusted gross farm income above the $750,000 cap would still be eligible for the "safety net" provisions including loan deficiency and countercyclical payments. Direct payments for non-farmers would be lower, capped at an adjusted gross income of $500,000, Grassley said.
Reports indicate the maximum payment would remain $40,000 per person for direct payments. As the chart shows, rice, cotton and peanut producers receive the highest dollar per acre of direct payments.
Because of high prices, countercyclical prices have not been paid to several crops over the past couple of years. Cotton and peanuts have received countercyclical payments as the following chart shows.
The bill also pares back the ethanol blenders' tax credit from 51-cents per gallon to 46 cents. Although it provides budget savings, Iowa State University director of the Center for Agricultural and Research Development Bruce Babcock said the change will not significantly lower corn prices as some hope, potentially only lowering prices 4 cents. It also increases the tax credit for cellulosic ethanol to $1.01 per gallon.
More information will be available on the final deal following a 1:30 p.m. EST press conference highlighting the bill. The event will be broadcast live via webcast on the House and Senate Agriculture Committee Websites at: http://agriculture.house.gov/hearings/audio.html or http://agriculture.senate.gov/.
It is uncertain at this time if the payment reforms go far enough to please President Bush's call for reform. Both House and Senate agriculture committee chairman leaders have mentioned they're looking for the votes to override a veto in case the President does not sign on to the bill.
Policy is one of the most important issues facing farmers today, but often the most difficult to digest. Jacqui Fatka has a passion to decode the often difficult world of agricultural policy into terms understandable for today's ag players.
Fatka joined the Farm Progress team as E-Content Editor in August 2003 after graduating from Iowa State University. Prior to full-time employment with Farm Progress, she interned at Wallaces Farmer magazine, Iowa Sen. Chuck Grassley's press office and the Iowa Pork Producers Association and freelanced for National Hog Farmer. She also worked as a public relations consultant with Iowa Industries for the Future, an effort to bring together major players in the biorenewables industry.
Currently Fatka is a staff editor at a sister publication, Feedstuffs. For Farm Futures she regularly tells the story of ongoing agricultural policy changes. Her byline can also be found on management profiles.
Fatka grew up on a grain and livestock farm near Atlantic, Iowa. She currently lives in central Ohio with her husband Eric.
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