Wrong direction for farm policy

Just one week after signing a $787 billion economic stimulus bill, President Obama unveiled the outline of his $3.55 trillion budget proposal. Many provisions within this framework are concerning to me. For example, it would eliminate direct farm payments based on gross sales. In stark contrast to the farm bill I proposed as Agriculture Secretary, this administration seeks to cut direct payments to farmers with more than $500,000 in gross sales. I find this to be not only troubling, but completely nonsensical. This stipulation absolutely misses the mark when it comes to providing a farm safety net.

On the surface, a farm with over $500,000 in gross sales may appear to fit the description of successful. But what that clearly does not consider are the operational costs of farming. In many cases, farms in Nebraska with revenues at that level actually find they are in the red, and depend upon this payment for their very livelihood. I can assure you I am committed to correcting this proposal.

This budget proposal is especially troubling for the state of Nebraska. Of the 47,712 farms across Nebraska, nearly 35,000 currently receive federal farm payments. Of that number, 5,921, or 17 percent, have over $500,000 in gross sales, and would be affected by this change in policy. Considering that 10 percent of farms across the United States have sales over that amount, Nebraska's rural communities would feel the negative effects of removing this critical safety net more than in many other states.

Another key reason this proposal is so alarming is the recent spike in production costs that farmers are facing today. From 2007 to 2008 alone, production costs went up 12 percent. The Administration's proposal to focus on gross revenue, instead of net revenue, completely ignores this jump in input costs and indiscriminately removes this critical safety net for the farmers producing our nation's food supply.

I understand that in these difficult times, we should all be seeking to find ways to tighten our belts and limit seemingly unyielding federal government spending. But making this policy dependent on gross sales, and not net income after the bills have been paid, does not make sense. While I support common sense government payment limits to accurately ensure only those farms that truly need assistance are receiving benefits, this Obama Administration proposal clearly misses the mark.