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Hoosiers Divided on Direct Payment Issue

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Roman M Keeney

The Purdue Ag Forecast on Saturday at the State Fairgrounds drew a crowd of several hundred farmers to hear a panel discussion on the Farm Bill.  During the Forecast, Indiana Farm Bureau President Don Villwock brought the audience up to date on 2012 Farm Bill issues from the Farm Bureau perspective. As the issue of direct payments is at the forefront, and, as Andy Eubank reports, Villwock was blunt about that program’s future, “They are toast.” While Farm Bureau and many commodity groups are not supporting direct payments, one Purdue Economist is. Roman Keeney, Associate Professor of Ag Economics,  told the group that doing away with direct payments to farmers is very politically popular but may not be good policy.  He told HAT that, in an era of budget uncertainty, direct payments provide budget certainty, “If we are going to spend money on agriculture, isn’t it better to know how much we are going to spend up front?”  He noted that, while payments get a bad rap, they have provided stability to the ag economy and that producers know how to manage them as part of their operations.

 

Keeney says, despite what farm groups say, farmers really want direct payments.  He offers the ACRE program as an example, “For the past four years, farmers have had the chance to choose between ACRE or direct payments and only 13% chose ACRE, so I don’t think it is generally favored in agriculture.” He worries that, with a strong ag economy, everyone feels comfortable in getting rid of direct payments; but he worries what will happen when times get tough.  Keeney said there is still the chance for action on a Farm Bill late in the year in a lame duck session after the election.

 

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