The Associated Press April 19, 2011, 7:22PM ET

Vilsack: Farm subsidies on table in budget talks

Subsidies to farmers will be on the table as the government tries to reduce spending, U.S. Secretary of Agriculture Tom Vilsack said Tuesday.

But Vilsack cautioned against cutting too deep.

"As folks look at this budget discussion, we need to make sure there is a proper balance between reducing spending but not limiting our capacity to expand the economy," Vilsack said during a tour of a corn and soybean farm near Prairie City, east of Des Moines.

Rep. Paul Ryan, R-Wis., has proposed a $3.5 trillion budget plan that would reduce payments to farmers by $30 billion over 10 years.

Vilsack said about 10 percent of the overall reductions that were made earlier this month to the current year's budget to avoid a government shutdown affected the USDA. As Congress turns to the 2012 budget, more cuts are likely, he said.

"There will not be painless reductions," he told The Associated Press.

Vilsack said President Obama and the USDA have proposed "some modifications and adjustments" to subsidy payments made to farmers. In particular, they are reviewing direct payments, which some farmers receive no matter how much they grow or what happens to crop prices.

"It's fair to say there are questions being raised with high commodity prices whether or not the payment system we have in place is the right way to approach a safety net," he said. "The question is, is it a safety net that provides payments every year regardless of how good times are or is it a safety net that really helps you out when you absolutely need help?"

Under the current system, a farmer can generate $750,000 in adjusted gross income from their farm operation and another $500,000 in adjusted gross income from another source and still get a payment, Vilsack said.

"And that's hard to explain to folks in tough times," he said.

Everything must be on the table and "looked at closely," Vilsack said.

"But the challenge is how we do that without limiting our capacity to grow our economy," he said.

Vilsack was joined on the stop by U.S. Environmental Protection Agency Administrator Lisa Jackson. The pair toured two farms and a biodiesel plant Tuesday to meet with farmers and discuss conservation practices, renewable energy and to dispel what the officials said are misconceptions about EPA regulations that affect farmers.

Jackson assured farmers that the EPA is not targeting agriculture in regulations that protect the nation's air and water supplies.

"We all want clean air, we want clean water, but we're not targeting agriculture to do it," she said. "We're simply saying let's find those places where there are win-win solutions where you can do your business and we can also assure the air and water quality are being protected."

Jackson also addressed questions about farm dust, saying The Clean Air Act charges the EPA with reviewing the science on fine dust particles every five years to assure existing standards continue to protect the public.

"That's what we're in the middle of," she said.

She said she would decide in July whether to change standards for fine dust particles.

Norman Havel, 79, of Prairie City, said he was glad to see Vilsack and Jackson in the area.

"EPA needs to use some good judgment. They need to see what's going on out here. Sometimes they sit back and make rules but they're not proper," said Havel, who owns farms in eastern Iowa's Washington County.

He didn't have any criticism for EPA regulations, but said "I just hope they're administered with good judgment and good common sense."


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