The Farm Budget Blowout That Could Cost Taxpayers Billions

WASHINGTON/CHICAGO (Reuters) - U.S. farmers are about to reap a bumper harvest not just in corn and soybeans but also in new subsidies that could soar to $10 billion, blowing a hole in the government's promise that its new five-year farm bill would save taxpayers money.

If payments for 2014, the first year the farm bill takes effect, do come in at that level - as some private economists have calculated - they would be more than 10 times the U.S. Department of Agriculture's working estimate and more than double the forecast by the Congressional Budget Office.

Farmers will be in line for payouts if revenues fail to meet benchmarks tied to long-term price and production averages. Both the USDA's and the CBO's estimates were made before crop prices tumbled this year on oversupply from a huge harvest.

The farm budget blowout for 2014 is unlikely to cause a furor in Washington, despite the clamor for cost-cutting among Republicans who now control Congress. The trillion-dollar farm bill took so long to enact because of controversy over some of its other major planks, including food stamps for low-income families, that lawmakers are loathe to re-open it.

From Monday, farmers were able to start signing up for the compensation programs. Most participants will be the families who own and operate about 98 percent of all U.S. farms, large and small.

"The (farm) bill actually did little to rein in costs," said Republican Representative Tom Petri of Wisconsin, in an emailed statement. "What we're seeing is a program that still costs far more than it should and fails to include reforms that actually save taxpayer dollars."

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