American Recovery and Reinvestment Act and how it affects agriculture

On Feb. 17, President Barack Obama signed into law the American Recovery and Reinvestment Act (ARRA) of 2009, otherwise known as the economic stimulus package. The intent of the bill is to provide a stimulus to the U.S. economy in the wake of the economic downturn. The bill includes federal tax cuts, expansion of unemployment benefits and other social-welfare provisions and domestic spending in education, health care and infrastructure, including the energy sector.

This bill and Obama’s proposed budget for the upcoming year are causing agricultural associations to take notice. There are definitely mixed feelings among farmers and agricultural groups on the benefits and/or drawbacks of the two.

Obama is calling for the elimination of direct payments to large farming operations, reduced subsides for federal crop insurance programs, the elimination of storage payments on cotton and the phasing out of farm-program payments to growers with incomes of more than $500,000 over a three-year period.

“The president’s proposed limit penalizes the farms that are responsible for the majority of food, feed and fiber production in the U.S.,” said Jay Hardwick, National Cotton Council chairman, in a recent article in Southwest Farm Press. “According to the 2007 Census of Agriculture, farms with sales of $500,000 or more accounted for almost three-fourths of all agricultural products sold.”

The National Cotton Council (NCC) stated that Obama’s proposed program changes “fail to recognize the work recently completed by Congress on the Food, Conservation and Energy Act (FCEA) of 2008 [otherwise known as the Farm Bill].”

According to the Southwest Farm Press article, leaders of the National Cotton Council, the National Corn Growers Association and the American Soybean Association state that they would oppose any attempts to change the provisions they fought to include in the 2008 Farm Bill.

“We’re very concerned about that statement. We’re not sure if he was talking about huge corporate farms or other parts of our industry,” said National Corn Growers Association President Bob Dickey when asked about the president’s proposal.

The Farm Bill is a five-year agricultural policy bill. It continues America's long history of agricultural subsidy, as well as pursuing areas such as energy, conservation, nutrition and rural development.

On the other end of the spectrum, in an article in North Platte Telegraph, the American Farm Bureau and National Farmers Union are pleased with the stimulus package’s commitment to renewable energy and broadband service for rural America.

“The tax incentives for renewable energy, particularly for new renewable fuels, will help build an industry that will provide farmers and ranchers with income and the rural economy with jobs, while contributing to a cleaner environment and reduced dependence on imported oil, ” said Bob Stallman, president of the American Farm Bureau Federation.

So what do you think of Obama’s stimulus package and proposed budget impact on agriculture?

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