Obama says end subsidy to large U.S. farms

By Charles Abbott

WASHINGTON (Reuters) - President Barack Obama called on Tuesday for an end to "direct payments to large agribusinesses that don't need them," an apparent attack on subsidies costing $5.2 billion a year.

In an address to Congress, Obama said the White House has identified $2 trillion in wasteful and ineffective spending, including unneeded direct payments to large farms.

"In this budget, we will ... end direct payments to large agribusinesses that don't need them," he said. He did not say how much money would be saved by the step or how it would be structured.

The proposal echoed a leading point from his presidential campaign but similar proposals have routinely withered in the face of opposition from farm-state lawmakers.

President George W. Bush, for example, fruitlessly backed a $250,000 annual cap on all payments per farmer.

Farm-group spokesmen said Obama apparently meant a farm subsidy known as direct payments that was created in 2002 and is made regardless of crop prices or farm profits.

But they noted that direct payments is a term meaning all types of federal support made in cash.

"It's funny wording," said Ferd Hoefner of the National Sustainable Agriculture Coalition. His belief was Obama would back a $40,000-a-year limit on the guaranteed direct payments, half of the amount now allowed.