With high market prices for crops like corn and soybeans, McCracken County farmer Mike Boatwright doesn't have any immediate concerns about crop subsidies in the farm bill Congress is debating.
What worries him are price guarantees in a year or two, when production exceeds demand and prices drop. Farmers also are concerned about subsidies when they have crop losses because of floods, drought and other catastrophes.
Boatwright and other farmers aren't just waiting for their fields to dry so they can plant crops. They await Congress' approval of a five-year farm bill to replace the one that expired six months ago.
U.S. Rep. Ed Whitfield said House and Senate negotiators are trying to work out a compromise that President Bush
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would accept. Bush wants to reduce the estimated $290 billion cost over the next five years.
Crop subsidies represent less than one-third of the estimated cost. Most of it is to pay for food stamp and nutrition programs to help those in need.
Without major cuts, Whitfield said, Bush has threatened to veto the bill. "One of the areas they are looking at for cost savings that concerns me is to reduce the government subsidy for crop insurance," he said.
Crop insurance protects farmers from lost revenue. The insurance also protects lenders who often finance farmers' spring planting, which can cost $500 or more an acre.
Whitfield predicted that if a farm bill isn't approved soon, the existing provisions will be extended until 2009 when a new Congress and new president are in office.
Eddie Melton, a Webster County farmer and Kentucky Farm Bureau board member, said it is important that the new five-year bill be approved.
"We need to know what's going to be in the farm bill so that we know what to plant," Melton said. "We have to know what crops are going to be protected in case of a disaster or the markets drop. Extending the existing bill only means we'll have to wait another year."
Boatwright said the farm bill is important because it places a floor on how low prices can go. He said the current subsidy for corn kicks in when prices drop below $2.10 a bushel. The current market price for corn is more than $5 a bushel.
Boatwright said the amount of subsidies paid to farmers in 2007 was low because market prices were so high.
"When prices are high, farmers always overproduce, and it causes the price to go back down," Boatwright said. "That causes profits to be marginal at best."
Bill Bartleman can be contacted at 575-8651.Paducah Sun
