Ag Policy Blog

WASHINGTON (DTN) -- Agriculture Secretary Tom Vilsack pointed to a budget proposal backed by a majority of House Republicans as a "pretty radical" plan to cut and eliminate USDA farm safety net programs.

Vilsack spoke Monday to members of the North American Agricultural Journalists (NAAJ) at their annual meeting.

Vilsack's talk with reporters touched on the farm bill, the relationship with China, highly pathogenic avian influenza (HPAI) and the federal greenhouse gas model.

The secretary repeatedly pointed out that 21 of 29 Republicans on the House Agriculture Committee also are members of the Republican Study Committee (RSC), which has released a fiscal year 2025 budget proposal seeking to slash nearly every domestic spending program -- including most safety net programs at USDA.

"The study committee recommendations are pretty radical," Vilsack said.

The RSC proposed ag cuts reflect a "disconnect in messaging" as Committee Chairman Glenn "GT" Thompson, R-Pa., pushes to pass a farm bill, Vilsack said.

"That's a pretty challenging circumstance for the chairman," he said.

Under the RSC proposal, means testing for USDA programs would reduce the income cap to $500,000 for farmers to receive USDA subsidies, down from the current $900,000 or higher if more than 75% of a farmer's income is tied to an agricultural operation.

"It may come as a surprise to folks that the study committee also suggests that regardless of circumstances, no farmer should receive more than $40,000 in subsidies," Vilsack said.

While Republican senators last week proposed increasing premium subsidies for crop insurance. the RSC budget would reduce premium subsidies by roughly 14%.

The RSC budget also would end new enrollments for certain conservation programs -- the Conservation Reserve Program (CRP) and the Conservation Stewardship Program (CSP). Technical assistance by the Natural Resources Conservation Service (NRCS) would also be eliminated.

Highlighting some of the various cuts that farmers would face, Vilsack said, "It just underscores the difficulty of getting a farm bill."

In other areas, the RSC budget would eliminate USDA trade promotion programs. Farm groups have been calling on Congress to double funding for the programs.

Vilsack said the justification under the RSC budget cuts is to eliminate the estate tax. He then pointed to a USDA study showing that of 31,000 farmers who passed away in 2020, only 189 were required to file an estate tax. Of those, 50 farmers were required to pay a combined $130 million in taxes, "but the transfer of wealth was $56 billion," Vilsack said.

Countering that RSC proposal, Vilsack keeps pitching a plan to use the Commodity Credit Corp (CCC) to help improve the commodity safety net. He said providing USDA with more flexibility to use the CCC fund is better than GOP proposals that would require the agriculture secretary to ask Congress every time there is a need to help producers. The secretary pointed to recent situations where USDA responded to calls from members of Congress to help rice producers, create a storage program or help pay producers for losses from highly pathogenic avian influenza.

"My view is to use the CCC but define specifically how it should be used," Vilsack said.

AVIAN INFLUENZA

The secretary said the issues with HPAI in roughly 24 dairy herds aren't as significant considering there are as many as 25,000 dairy herds in the country. He said cows get sick but then recover. That is different from poultry operations where HPAI kills chickens and turkeys.

"It's not fatal to cows. They recover after seven to 10 days.

There needs to be a bigger focus on what can be done to protect the poultry industry. Since 2022, USDA reports that 115 million chickens and turkeys have been infected and depopulated across the country. Since the beginning of April, just three commercial egg operations have been infected, involving more than 6 million layer chickens that have to be euthanized.

Vaccines right now have a lot of complications, Vilsack said. "It's not feasible at this point . . . to ask producers to inject shoot every egg or every chick," he said.

Vilsack also added the international trade community is just now starting conversations about what it would take to accept vaccinated poultry for international trade. Several trade partners are opposed to the idea.

"That's going to take a while. That can't be easily discussed," he said.

CHINA AND LOST EXPORTS

In a discussion with reporters about foreign ownership of U.S. agriculture, Vilsack said he opposes any Chinese land ownership around military bases. But Chinese companies only own about 1/10th of 1% of the nation's farmland -- about 350,000 acres.

However, U.S. agricultural exports are down $6 billion in the first quarter of the federal fiscal year. U.S. agricultural exports to China were down $6 billion.

Vilsack said early in his conversations recently with China's agriculture minister, the minister brought up a question about why Syngenta Seeds must sell land in Arkansas. State officials are forcing Syngenta to sell acreage around a seed research center because the company did not file a report with state officials.

Vilsack said he thinks China is buying fewer U.S. agricultural products to send a signal over the barrage of laws from states and Congress about Chinese land ownership in agriculture.

"You rap on your No. 1 customer and it's going to have an impact," Vilsack said.

The U.S. and China have "a nuanced and complex relationship," he said. The U.S. cannot make headway in areas such as climate change, terrorism or global stability without China's help.

Vilsack added, "It's a complicated world and it doesn't lend itself to simplistic notions, but that's what we have here."

That demands U.S. agricultural exporters find more ways to diversify their markets in other parts of Asia and Africa rather than relying so heavily on China.

GREET UPDATE

The biofuels industry keeps seeking specific details for the Biden administration's update of the Department of Energy's Greenhouse gases, Regulated Emissions, and Energy use in Technologies life cycle analysis, known as the GREET model. The model update was supposed to be done in early March but officials delayed it.

Vilsack said he is hopeful the GREET update will be out by "the end of the month."

"Well, they're in the process of putting the guidance together and I'm hopeful that it gets out before the end of this month," he said.

The GREET model update will essentially determine how U.S. biofuel producers will qualify for Sustainable Aviation Fuel (SAF) tax credits through the Department of Treasury. Early indications suggest biofuel producers will need to factor in the kind of climate-smart practices farmers employ to grow corn being delivered to an ethanol plant, for instance.

Rod Snyder, a senior adviser for the Environmental Protection Agency (EPA), said the GREET model is the basis for looking at land-use changes with policy decisions and it will take time to ensure the model is accurate before being released.

"We have to get this right so that it is scientifically defensible and greenhouse gas reductions are happening," Snyder said.

Once the GREET model update is finally released, EPA will have to see how to plug the new GREET model into programs such as the Renewable Fuels Standard.

"That's a conversation we will probably begin having once that guidance comes out," Snyder said.

Chris Clayton can be reached at Chris.Clayton@dtn.com.

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