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Farm Energy Bailout Is Generating Heat in Washington

April 27, 2006|Jerry Hirsch | Times Staff Writer

Want government relief from high gasoline prices? Ditch that sport utility vehicle and buy something really big -- like a turbocharged, 350-horsepower John Deere cotton picker.

The U.S. Senate is debating whether to increase a special category of farm subsidies by 30%, or about $1.5 billion, to offset higher energy expenses.

The proposal is buried in a bill that President Bush has threatened to veto because it includes so much of Washington's favorite farm product -- pork.

Both liberal and conservative policy and advocacy organizations are railing against the energy subsidies.

"There is no economic justification for this bailout," said Brian Riedl, a senior budget analyst at the conservative Heritage Foundation.

American Farm Bureau Federation President Bob Stallman defended the plan, noting that the bill's other provisions would add $2.5 billion in farm aid for regions affected by last year's hurricanes and other natural disasters.

"We did not craft the energy provision," Stallman said, "but we support the entire proposal because it may be the only vehicle to provide for agricultural disaster assistance."

An analysis by the Environmental Working Group, a liberal advocacy group that tracks farm subsidies, found that most of the money for energy assistance would go to producers of cotton, wheat, corn, rice and soybeans -- crops that already get the lion's share of farm supports.

California is the nation's largest agricultural state by revenue, but growers here would get just $50 million in the proposed energy subsidies, according to the environmental group. That's because most of the $31 billion a year in wine, fruit, vegetables, beef and other agricultural goods produced here does not qualify for farm payments.

Iowa would get $153 million, more than any other state, with most going to corn farmers.

"The package is unfair and poorly targeted," said Ken Cook, president of the Environmental Working Group.

Hundreds of thousands of farmers are struggling with oil-related increases in the costs of diesel fuel, fertilizers and other chemicals, Cook said, but can't seek relief because they don't grow crops that qualify for the "fixed direct payment" program.

And then there's the question of whether the government should offer fuel price bailouts for part of agriculture but not for other industries -- or truckers and commuters, he said.

Cook noted that the extra payments come at a time when the U.S. Department of Agriculture estimates that net farm income reached nearly $83 billion last year, the second-highest level ever.

Farmers collected a record $23 billion in subsidies last year, according to USDA data.

Despite the payouts, commuters might think twice about getting that diesel-powered $400,000 cotton picker. Deere doesn't even try to calculate its miles per gallon. The harvester will run for about 12 hours on its 200-gallon fuel tank. An hourlong traffic jam would consume nearly 17 gallons of diesel.

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