Farm income is up nationally, and grain prices are high. The economy is down, and Congress is in a cutting mood. So expect the folks in Washington to try to take a sharp knife to federal farm subsidies, which totaled more than $15 billion nationally and nearly $1 billion in Kansas in 2010.
Farmers and agriculture groups are grimacing. Farm subsidy opponents are grinning.
The direct-payment program is expected to be the main target. Most farmers are resigned to losing at least some of that, but they're also dead set on retaining another possible target, the federal 59 percent subsidy for crop insurance.
Based on the past four years, ag economists' best guess is that direct-payment cuts would drop Kansas farmers' average annual income about $8,000, to $110,000.
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"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. "We've gone through four pretty doggone good years in a row."
Nationally, net farm income is expected to be up nearly 20 percent to $94.7 billion in 2011, according to the U.S. Department of Agriculture. Corn hit a record high of a shade under $8 a bushel in June; wheat and soybeans approached the record highs set in 2008. Wheat was going for $7.93 a bushel at the Garden Plain Co-op on Friday.
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.
Not even one of the few congressional coalitions that cross party lines — politicians from major agriculture states — is expected to be able to protect its turf.
To read the complete article, visit www.kansas.com.