Kansas farmers join farmers and agriculture groups across the country as they watch anxiously to see how much ag-related funding will be cut by Congress to meet the debt ceiling deal. Washington politicians are expected to take a sharp knife to federal farm subsidies, which totaled more than $15 billion nationally and $1 billion in Kansas in 2010.
According to Rick Plumlee of The Wichita Eagle, the looming cuts have these ag professionals grimacing and farm subsidy opponents grinning.
The direct-payment program has been painted with a bull’s-eye as politicians take aim. Many farmers are resigned to losing at least some of the direct-payment program. However, they are also dead-set on retaining another possible target – the federal 59 percent subsidy for crop insurance.
Ag economists forecast that cuts to direct payments would drop the average Kansas farmer’s annual income by $8,000 to $110,000.
"If you accept the fact there's going to be some cuts — and most people probably do — you couldn't have a better time for it," said Kevin Dhuyvetter, an ag economy professor at Kansas State University told The Wichita Eagle. "We've gone through four pretty doggone good years in a row."
The USDA reported an increase in the national net farm income – up nearly 20% to an expected $94.7 billion in 2011. Corn hit a record high of nearly $8 per bushel in June while both wheat and soybeans approached record highs set in 2008.
While this year's severe drought will take a bite out of farm incomes in Kansas, Oklahoma and Texas, the farm bill is all about the big picture and what's happening across the country.
"It all boils down to it's been a pretty good time to be a crop producer," Dhuyvetter said. "The last thing you would want is to have to take cuts when we just had three years of losing money."
That doesn't make the pill easier to swallow for the Kansas farmer who has just watched his corn and soybean crops burn up, but Congress is intent on spending reductions.