Home > Uncategorized > Record Farm Profit Amid Drought Raises Questions of Aid – Bloomberg

Record Farm Profit Amid Drought Raises Questions of Aid – Bloomberg

A projection that U.S. farmers will make a record profit amid the worst drought in more than five decades shows that government help for producers can be scaled back, critics say.

Higher prices and crop-insurance payments will outweigh losses from dry conditions, propelling aggregate farm profits to $122.2 billion this year, up 3.7 percent from 2011, the U.S. Department of Agriculture forecast yesterday.

“It’s compelling evidence that what started out as a basic safety net has become a program that is essentially guaranteeing business income,” said Craig Cox, head of agriculture and natural-resource programs for the Environmental Working Group, a Washington-based advocacy organization that opposes many farm subsidies.

Federal crop insurance dates to the Dust Bowl droughts of the 1930s. The program and subsidies were boosted in 2000 as lawmakers sought to use them as a way to avoid near-annual disaster-aid appropriations that the Congressional Research Service says cost taxpayers $68.7 billion from 1989 to 2009.

This year the USDA has declared natural disasters in more than 1,800 counties in 35 states, or more than half of the country’s total, mostly because of the dry, hot weather. Futures prices for corn surged 57 percent since mid-June through yesterday. Soybeans were up 31 percent and wheat 40 percent.

via Record Farm Profit Amid Drought Raises Questions of Aid – Bloomberg.

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