|Issue of the Day Posts Tagged ‘Farm Subsidies’|
Despite the increasing trend of organic and green living, the growth of organic food consumption has slowed after years of explosive annual growth, especially for dairy organic farms. Many farms are seeing a 50% drop in organic milk sales this year from 12.7% in 2008 to about 6% this year according to the Organic Trade Association. According to the US Department of Agriculture, sales of organic whole milk were down 2.5% in February from last February; organic reduced-fat milk is worse at 15% below last year. This makes it more difficult for farmers to recoup the investment from the conversion cost of going organic from conventional farming, which can run into the $500,000 range per farm. State governments responding to the drop in sales have passed bills to increase the amount of raw milk a farmer can sell to the public versus the conventional processors in an effort to ease the financial loses. This comes just after the USDA awarded $50 million in funding for organic food production.
Overall farmland use has been reducing from 9 to 20% annually since 2000. Organic foods have experienced a remarkable upswing in sales over the last decade from near 60 million pounds of organic milk to 150 million pounds at the end of last year. This fed the growing number of organic farmland, especially after 2003 where in 2 years the number of organic pastureland and rangeland tripled from 745,000 acres to 2,331,000 acres in 2005.
The 2010 Federal Budget has caused some concern over its $3.6 trillion price tag and some of its reforms. The new budget has called for some farm reforms that have spurred debate on both sides of the Hill. One of the main contentions is that the budget “supports the implementation of a $250,000 commodity program payment limit. The payment limit will help ensure that payments are made to those who most need them.” This program targets farm programs to family farmers and provides the stability and predictability against market disruptions and weather disasters. Moreover, the President wants to transition large farms from direct payments to increased income from revenue derived from emerging environmental services. The President will phase out direct payments over 3 years to farmers with sales revenue over $500,000.
Currently, direct payments of farm subsidies are made to even large producers regardless of crop prices, losses, or whether the land is still under production. The total cost of farm subsidies in current dollars over the last 40 years is somewhere in the neighborhood of $140 billion. This current reform has stemmed from the fact that 10% of all who received farm subsidies received 72 % of all payments made between 1996-present. Accordingly, only 13 states are awarded Farm Subsidies between $5 and $14.9 billion out of the $140 billion total.