Direct Payments’ Days are Numbered

In a recent visit to Iowa, Secretary of Agriculture Tom Vilsack told farmers and ranchers that direct payments were on the way out, confirming what many farmers have expected and anticipated.

Direct payments, a longtime staple of federal farm subsidies, have recently become politically toxic in a congressional atmosphere dedicated to trimming the federal budget and eliminating waste. While direct payments have a long history in American agricultural policy, their most recent incarnation dates back to the 90s.

Direct payments have recently come under fire for being both unnecessary and for benefiting large-scale agribusinesses at the expense of small farmers. With commodity prices skyrocketing over the past few years, American farm incomes have hit record highs, prompting many policymakers to question the necessity of direct payments. In addition, since payments are make regardless of economic need, many major agricultural corporations receive subsidies that were intended as a safety net for struggling farmers.

In light of this bad publicity, Congress appears to be on the verge of eliminating direct payment subsidies altogether. The billions of dollars that could be saved by ending the program makes it a tempting target for lawmakers. According to Vilsack, “I don’t think there is any doubt about that given the fact there has to be reductions. We have to get our fiscal house in order, which all of us agree has to be done.”

While direct payments may be numbered, Vilsack said, he remains confident that Congress will guarantee adequate agricultural safety nets through programs like crop insurance.

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Written by: Justin Ellison / Farm Plus Staff Writer