On Monday, the Obama administration released its proposed budget for fiscal year 2013. The budget would cut $32 billion in USDA spending over a decade.
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Direct payments would be eliminated under the proposal and crop insurance subsidies would be cut along with conservation programs.
Despite the cuts, "to help sustain record farm income, we will invest in research and development to improve agricultural productivity,” said Agriculture Secretary Tom Vilsack in a statement. “The budget makes a 23 percent increase in funding for our premier competitive grants program to support the most worthy projects and continues support for in-house research and the land grant universities. We'll continue our efforts to combat destructive pests and disease that threaten crops and livestock.
"To encourage thriving markets for our farm products aboard, we will continue funding that helped make last year a record for agricultural exports, driving farm income and supporting 1.1 million American jobs. We'll reduce trade barriers and aggressively promote 'grown in America' products. At home, we're working to encourage the development of a bio-based economy, where what we grow and raise is used to make fuel, chemicals and consumer goods to complement our traditional production of food, feed, and fiber.”
Reactions to the White House proposals were quick in coming.
The budget, if passed, would undermine “our investment in providing a stable food supply,” said Oklahoma Rep. Frank Lucas, chairman of the House Agriculture Committee. "For example, President Obama’s proposal to cut crop insurance threatens the integrity of the program itself. And, he ignores other areas for savings such as streamlining or eliminating duplicative programs in conservation, or closing loopholes in nutrition spending. Nutrition spending comprises 80 percent of the agriculture baseline and there is bipartisan support in Congress to save billions by eliminating loopholes, but not one penny is cut in (Obama’s) budget.
Sentiment from the other side of the aisle, of course, was much less sharp. While “encouraged” by the removal of direct payments, Michigan Sen. Debbie Stabenow, chairwoman of the Senate Agriculture Committee, was not in favor of “further cuts to crop insurance, which is a critical risk management tool. I have heard loud and clear that strong, effective risk management is the number one priority of farmers and producers across the country. Farming is a high risk business and we don’t want farmers and other small businesses going under because a few days of bad weather – it jeopardizes the economy and the safety of our national food supply.”
Crop insurance is also a concern for the American Soybean Association. While the ASA has called for “a shared responsibility for deficit reduction across all mandatory and discretionary spending programs, up to and including the elimination of Direct and Counter-Cyclical Payments as well as the Average Crop Revenue Election program” growers will soon plant a new crop and assume new risk, said ASA President Steve Wellman. This is “exactly the wrong time to reduce support for the federal crop insurance program. The proposal put forth in the president's budget would reduce support to farmers who purchase the highest levels of coverage -- a backwards approach that discourages producers from purchasing enough coverage to meet their substantial risk management needs.”
However, ASA “does applaud the president’s request to increase the 2013 funding level for the Agriculture and Food Research Initiative (AFRI) to $325 million -- an investment targeting areas key to American scientific leadership, including nutrition and obesity reduction, food safety, sustainable bioenergy, global food security, and climate change.”
The National Sustainable Agriculture Coalition deemed the budget proposal “not terribly interesting.” Ferd Hoefner, the NSAC’s policy director, said it “follows the emerging consensus to do away with direct payments but offers no alternative safety net proposal other than renewing a largely discredited and expensive farm disaster program. It also proposes an across-the-board two percent cut to farmers’ crop insurance premium subsidies. Both the commodity payment and crop insurance proposals fail to target the cuts, and thus their impact would be felt most heavily by small and medium-size farms. Neither proposal addresses the critical issue of whether the public should be given assurances that natural resources are protected in return for their large investment in farm production subsidies. … Frankly, the proposals are relatively lame and not at all progressive. Clearly, all the heavy lifting is left to Congress.”
Agriculture has done more than its fair share in reducing the deficit, said Roger Johnson, National Farmers Union president. “Efforts to cut even more by slashing support for family farmers should be directed elsewhere. Earlier this year, the USDA announced the closing of 259 facilities across the country because of these draconian budget cuts. The ‘cut-first, ask questions later’ attitude in Congress is now showing its true costs.
“These budget cuts highlight a reality that we must look for new solutions within the agriculture industry to ensure that farmers and ranchers are protected even as the available funds diminish. Farmers need a safety net for difficult times -- when markets collapse and when disaster strikes.”
The nation’s farmers and ranchers “deserve a measure of certainty,” said Jon Scholl, president of American Farmland Trust (AFT). “Farmers require a safety net that works effectively, and they need access to tools that help them be good stewards of our natural resources. Those people less fortunate during these economic times deserve a helping hand so they don’t go hungry, while our nation as a whole needs the security which effective food policies and programs can bring.”