News and analysis on the global poultry
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on July 13, 2010

Federal subsidies to grain farmers may be cut

Reductions to financial aid could impact cost of ingredients

Federal subsidies to producers of corn, soybeans and other crops may be cut, according to a report.

“We are not going to have any new money; we’ll probably have less money,” said Collin Peterson, D-Minn., chairman of the House Agriculture Committee.

His remarks were delivered during a hearing in Washington D.C. to gather opinions from farmers on U.S. agriculture policy.

In 2009, the USDA expended $15.4 billion on all support programs including food stamps and farm subsidies. Growing budget deficits make subsidies appear unpopular from a political standpoint and coupled with complaints from trading partners over subsidies, reductions are inevitable. Congress is aiming to approve the next Farm Bill before September 2012.

If subsidies are selectively reduced, farms will naturally select crops which offer the optimum return commensurate with expenditure and risks. This may impact availability of ingredients and may alter the price structure of livestock production.

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