Nation's farmers shaken by Bush proposal to cut subsidy spending

Rice grower Frank Rehermann of Live Oak, Calif., contemplates his 33rd spring planting while worrying about the lowest crop prices he has ever seen. And not only that, he is hearing troubling things from the federal government, his silent partner on 900 acres about 60 miles north of Sacramento.

President Bush, in his budget plan released Monday, is proposing to cut farm subsidy spending 5 percent this year and cap subsidies at $250,000 per person.

"I expect when it's all said and done the rice industry will sustain cuts. The question is how much?" Rehermann said.

From North Dakota wheat country through the Midwest Corn Belt to the South's cotton fields, farmers who considered their government payments guaranteed are worried.

"What do they want from us? Do they really want us to succeed out here and support our local communities? Or do they want us to quietly go away and sell out to an investor?" asked Eunice Biel, a dairy farmer with 860 acres near Harmony, Minn.

Between 1995 and 2003, U.S. farmers received $131 billion in federal subsidies, with the largest share -- 28 percent -- steered to Midwest corn growers, according to the Environmental Working Group, a nonpartisan Washington advocacy group. In 2003, the first year after Bush signed the most recent farm bill, about one-third of U.S. farms received $16.4 billion in federal subsidies.

Farmers in Cape Girardeau County and the nearby region are not heavily dependent on subsidies, said Gerald Bryan, an agronomist with the University of Missouri Extension Service. That is not true of cotton and rice farmers closer to the Bootheel.

Ken Minton, former president of the Missouri Rice Council, farms rice, soybeans, corn and wheat at his family farm near Dexter, Mo., in Stoddard County. He said subsidies are important, and without them the price Americans pay for food would skyrocket, as farming would become unprofitable for many small farmers.

"Subsidies help us to produce food at below cost," Minton said. "That money allows us to produce more food than we really need, and that makes it cheaper."

Without subsidies, the amount of food produced would drop dramatically, making Americans depend on risky foreign markets if they wished to retain the same low food costs.

But he did say the subsidy cap at $250,000 per farmer probably wouldn't affect many people in the area, as most of them don't farm enough ground to get those kind of subsidies, anyway.

In many farm states that helped re-elect Bush in November after never hearing any campaign talk about cutting their payments, there is a sense of betrayal.

"I'm not happy. I voted for George Bush," said cotton grower John Rife of Ferriday, La.

By proposing such cuts, Bush has reignited a long debate in farm communities and urban America about the government's Depression-era practice of subsidizing what are now the world's most productive farms.

Critics say the subsidies benefit mostly large agribusiness corporations rather than small family farms, contribute to excessive federal spending and act as a barrier to free trade. An EWG analysis found that 10 percent of recipients get 72 percent of the nation's farm aid.

Among farmers, who make up less than 2 percent of the U.S. population, many say such payments are critical to their businesses, where production costs often outstrip commodity prices and the profit margin is perilously small and can easily be wiped out by heat, by cold, by rain or by drought.