(Reuters) - Reuters is reporting that President Barack Obama would phase out "so-called direct payment subsidies to U.S. farmers with sales over $500,000 a year, a senior administration official said." The proposal is part of the Obama's new budget proposal. "It would save $9.8 billion over 10 years, cutting outlays by one-fifth." There are roughly 126,000 farms with sales above $500,000 a year, says USDA -- with an average size above 2,300 acres. Direct payments were part of the 1996 farm bill and revised in the 2002 farm law. They cost more than $5 billion a year. "Because they are 'decoupled' from production, they are the safest among U.S. farm supports from trade challenges."
