The National Corn Growers Association earlier this year joined a coalition of national farm and agricultural groups to oppose President Obama's proposal to phase out direct payments to farmers with gross sales over $500,000 and cuts in the federal crop insurance program. Even though the House and Senate rejected the funding reductions in the recently passed Budget Resolution, the Obama Administration's detailed budget, released late last week, still includes the proposed cuts.

"These two areas targeted by the president's budget are alarming to our organization," NCGA First Vice President Darrin Ihnen said. "In agriculture today it is relatively common to see gross annual sales of over $500,000, but that does not mean net income. Our growers need a strong safety net and our industry will be weakened if the government begins to cut crop insurance funding and basing payment eligibility on rules that ignore production costs and long term business investment."

The proposal to phase out direct payments could also decrease participation in the Average Crop Revenue Election (ACRE) Program, which was included in the 2008 farm bill. With rising input costs and increased market volatility, ACRE and the new disaster assistance program, Supplemental Revenue Assistance (SURE), are the latest additions to the risk management tools made available to better protect producers against rising input costs and increase in commodity market volatility.

NCGA recently delivered testimony before the House Agriculture Subcommittee on General Commodities and Risk Management, noting these programs do not substitute for any part of federal crop insurance, but they can assist growers impacted by multiple years of shallow crop losses not covered by crop insurance.

NCGA and other agriculture organizations are continuing to monitor further developments on funding for farm and rural development programs as Congress continues its deliberations on the annual appropriations bills.