7/20/2011 AM Live Ag Report

FRESNO, Calif.

The U.S. Department Of Agriculture is buying 21,000-tons of canned peaches for school lunch and other food programs. Ag Secretary Tom Vilsack says the purchase will help relieve the California glut that has been driving down peach prices.

With harvest just weeks away, growers are having trouble securing contracts because of the oversupply of peaches.

Farmers are rushing to save the government ag subsidies.

President Obama and lawmakers want to cut $30-billion dollars or more in agriculture spending as part of a deficit-reduction deal.

Farmers say they know they'll have to take a hit, but they fear too many cuts could lead to sharp decreases in crop prices.

Budget negotiators are looking at three pots of agriculture money: direct payments, which pay farmers regardless of the crop they grow; crop insurance, which helps farmers in the event of losses; and conservation money, which pays farmers to protect environmentally sensitive land.

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