Obama budget plan cuts farm payments, ups feeding programs * Vilsack says plan chooses hungry children over rich farmers * Anti-hunger groups say $1 bln extra spending good step * One group says $20 bln over 5 years needed to end hunger (Adds reaction from anti-hunger and farm groups)


U.S. lawmakers will need to choose between supporting rich farmers or feeding more hungry children amid a slumping economy and a surging deficit, U.S. Agriculture Secretary Tom Vilsack said on Monday.

Vilsack said he already has heard concerns about the Obama administration's plan to redirect subsidy payments for large farmers into nutrition programs as a way to help end hunger by 2015 and stem the rising tide of childhood obesity.

"We will do our best to frame this discussion in that way, so that people understand: 30 million children, 90,000 farmers," Vilsack told Reuters after speaking to people who work with the nation's food banks and anti-poverty groups.

"It is a tough choice, but it's a choice that folks are going to have to make," he said.

President Barack Obama last week outlined what some have called one of the most ambitious agendas for social change ever seen in the United States, pledging to raise taxes on the rich to boost services for those lower on the economic ladder.

For his first budget, he proposed phasing out direct payments to farmers with sales of more than $500,000 a year, to save $9.8 billion over 10 years, or roughly one-fifth of the $5.2 billion spent annually on the payments.

Farmers say they count on the payments, paid regardless of crop prices, to help provide stability amid volatile commodity prices, high costs for fertilizer, and unpredictable weather.

About 126,000 U.S. farms have sales above $500,000 a year, according to the Agriculture Department.

The administration would rather spend the money on childhood nutrition programs.

"I have never known hunger, but 36 million Americans do," Vilsack said, noting USDA programs help one in six Americans get enough to eat.

More than 31 million people a month receive help to buy groceries from the U.S. Agriculture Department through food stamps, and about 32 million kids eat lunch each day through the school lunch program.

An extra $1 billion on top of the $16 billion spent on child nutrition programs will help fill empty stomachs, but anti-hunger groups said they will ask Congress for even more.

"I think it will be an interesting and difficult discussion to have with members of Congress," said Vicki Escarra, head of Feeding America, a network of more than 200 food banks.

The Food Research and Action Center estimates $20 billion over five years is needed to address the problem of hunger.

Obama's proposal is "an important step forward and can do a great deal of good. It's not enough to be transformative," said Jim Weill, president of FRAC.

Farm groups and influential farm state lawmakers already have spoken out against the plan. [ID:nN27467967]

"A cut-off at $500,000 in gross sales is way too low because that affects family farmers, not just big agribusiness. It doesn't take many acres to reach that," added Tom Buis, president of National Farmers Union.

Farm payment spending is a "drop in the bucket" compared to nutrition spending, which takes up two-thirds of USDA's budget, said Tara Smith, director of congressional relations for the American Farm Bureau Federation.

Vilsack urged anti-hunger advocates gathered in Washington to make the case to Congress to support the move.

"There are vested interest groups that want to protect those payments," Vilsack said in a speech.

"They are very vested. One fellow suggested that this was a declaration of war," he said.

Representative Jim McGovern, who said he will soon introduce a bill in the House to end childhood hunger by 2015, also warned Obama's budget proposal would face a fight.

"There are no guarantees here," McGovern said. "We can't blow it. All of us have to be part of this army." (Editing by Marguerita Choy)

President-elect Barack Obama selected former Iowa governor Tom Vilsack as his choice for secretary of agriculture, announcing the decision Dec. 17 in Chicago.

At the same time, Obama also named Colorado Senator Ken Salazar as his choice for Secretary of the Interior.

During the announcement, President-elect Obama made clear he considers both secretaries-designate to be key members of his energy and environment team.

“Tom understands that the solution to our energy crisis will be found not in oil fields abroad, but in our farm fields here at home,” Obama said.

He also said his cabinet appointments are “the team we need to make the rural agenda America’s agenda.”

About Vilsack

Vilsack, 58, was elected governor of Iowa in 1998, the first Democrat elected to that position in 32 years. After winning re-election in 2002, he chose not to seek a third term. Prior to serving as governor, he served six years as a state senator.

He holds a law degree from Albany Law School in Albany, N.Y., and practiced law in Mount Pleasant, Iowa, early in his career. He was the first Democrat to formally announce his candidacy for U.S. president in the 2008 election, but left the race in early 2007 and joined the international law firm Dorsey & Whitney, consulting clients in the fields of energy conservation, renewable energy and agribusiness development.

In September 2007, he was named a Distinguished Fellow at Iowa State University’s Biosafety Institute for Genetically Modified Agricultural Products and began to work quarter-time for the institute.

Born in Pittsburgh, Vilsack was orphaned at birth and later adopted. He met his future wife while attending Hamilton College in New York, and they settled in her home town of Mount Pleasant, Iowa.

At the Obama announcement, secretary-designate Vilsack spoke of his commitment to “promote American leadership in response to global climate change,” and declared his intent to “place nutrition at the center of all food programs administered by the Department.” read more