Budget will hurt King Cotton

Feb. 27 2009 – 22:36:10
The stimulus effect from a federally funded unemployment compensation supplement could be more than offset by the loss of cotton subsidies proposed in President Obama’s budget.

Obama’s proposed budget would have the same effect on cotton profits as the hot-water cycle has on cotton T-shirts. The budget “phases out direct payments over three years to farmers with sales revenue of more than $500,000 annually,” a move that would cut benefits for many area farms.

The budget also, according to Obama’s blueprint, would “eliminate the requirement for the government to pay the storage costs of cotton that is put under loan with USDA.”

It also cuts the Market Access Program by reducing program funding for overseas brand promotion and minimizes the benefits that large for-profit entities indirectly gain as members of trade associations who participate in MAP. One of those trade associations is Cotton Council International, which includes several North Alabama members.

Alabama cotton farmers received $116.5 million in subsidies in 2006.

Most of the large subsidies come from North Alabama. Here is a list of the state’s top 12 recipients of direct-payment subsidies in 2007, according to Environmental Working Group. Many of the subsidies are divided among multiple owners.

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1 Benton Farms Tyler, AL 36785 $254,521
2 Martin Farm Courtland, AL 35618 $253,360
3 Devaney Bros. Farms Madison, AL 35756 $222,495
4 Darden Bridgeforth & Sons Tanner, AL 35671 $199,464
5 Newby Farms Athens, AL 35613 $195,495
6 Underwood Farms Leighton, AL 35646 $194,308
7 Lee Farm Town Creek, AL 35672 $191,470
8 Haney Farms Athens, AL 35611 $189,816
9 Blythe Cotton Co. Town Creek, AL 35672 $159,160
10 Hamilton Farms Hillsboro, AL 35643 $157,321
11 Westover Planting Co Eufaula, AL 36027 $156,883
12 Driskell Cotton Farm Grand Bay, AL 36541 $154,361
13 Isbell Farms Muscle Shoals, AL 35662 $135,862
14 J B Hain Co Sardis, AL 36775 $132,182
15 Home Place Partners Prattville, AL 36066 $130,708
16 Wiggins Farm Andalusia, AL 36420 $129,304
17 Tate Farms Meridianville, AL 35759 $128,222
18 Cannon Farms Theodore, AL 36582 $121,006
19 Helton Bros. Farm Atmore, AL 36504 $120,254
20 Vaden Farms Florence, AL 35633 $120,195

Like most of Obama’s budget, there’s an agenda behind the dollars. King Cotton subsidies bring cash into North Alabama, but they devastate third-world farmers. For a little on that issue, see here.

The stimulus effect of payments to unemployed workers is greater than to rich cotton owners, because the former will use more of it for consumption.

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