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California senators drop support for payment limits

WASHINGTON (AP) -- Advocates of a $275,000-per-farm limit on government subsidies have lost the support of California's senators, who have decided the Senate-passed cap was unfair to their cotton and rice farmers.

Democratic Sens. Barbara Boxer and Dianne Feinstein, whose state is by far the nation's largest agricultural producer, are asking the Senate's lead negotiators on new farm legislation to back off the payment limit.

Under current law, farmers can receive some subsidies in unlimited amounts, and they could continue to do so under a House-passed farm bill. The Senate voted 66-31 to put the $275,000 limit in its version of the farm bill last month, but House negotiators are strongly opposed to cap.

"Large cotton and rice farms in California are family farms which should continue to receive payments, and not be discriminated against because of their size. These are not millionaires, but hard working family farmers," Boxer and Feinstein wrote in a March 7 letter to Senate Agriculture Committee Chairman Tom Harkin, D-Iowa, and Sen. Richard Lugar, R-Ind.

Chuck Hassebrook of the Center for Rural Affairs, a Nebraska-based advocacy group that supports the Senate provision, said Monday that it should be altered to make it fairer to cotton and rice. Those crops are subsidized at higher rates than crops such as wheat and corn because of their higher production costs.

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"The House bill has no limits. One farmer could farm the whole country and get millions of dollars ... under their bill," he said.

A Senate-House conference committee that is working on reconciling differences between the two bills has scheduled its first meeting for Wednesday.

Analysts agree that cotton and rice farmers would generally fare poorer under the Senate bill as opposed to the House version because of the payment limit.

A 2,365-acre rice farm in California, for example, would lose $91,000 this year under the Senate bill but earn a $173,000 profit under the House bill, according to a study done for Congress by Texas A&M; University. A 2,000-acre cotton farm in California would make a $190,000 profit under the Senate bill but would earn even more, $230,000, under the House version.

Boxer and Feinstein still support a provision in the Senate bill that would ban subsidies to anyone with incomes exceeding $2.5 million.

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