Bush poised to cut US farm aid

US FARMERS are being told to take cuts in their levels of support as the Bush administration struggles to contain its burgeoning budget deficit.

Presenting the draft budget for 2006 to the industry in Washington this week, new US agriculture secretary Mike Johanns insisted that every sector of the economy must play its part in delivering savings. “The long-term stability of our economy depends on whether we have the will to act now.”

In particular, Mr Johanns called for cuts in so-called “commodity credit corporation outlays”, including loan deficiency payments – paid when prices tumble. These are expected to fall by about $5bn (£2.65bn) in 2006, helped by a controversial cap on payments of $250,000 (£133,000) per farm.

Discretionary programmes, such as emergency aid following forest fires or hurricanes, are also being trimmed by around $2.6bn (£1.4bn) to $19.4bn (£10.3bn). And changes to the conditions of crop insurance should save another $140m (£74m).

The proposals have come as a disappointment to US farmer bodies, which have written to Mr Johanns urging restraint.