Ag Policy Blog

Pre-emptive Strike Launched Against Farm Budget Cuts

By Todd Neeley , DTN Staff Reporter

Hundreds of agriculture, energy, trade, crop insurance and other groups have made a pre-emptive strike against any potential federal budget actions for fiscal year 2017 that would include more cuts to agriculture, in a letter sent to a number of appropriations and budget lawmakers Wednesday.

In particular, the letter sent to Senate Budget Committee Chair Mike Enzi; Senate Budget Committee Ranking Member Bernie Sanders; House Budget Committee Budget Chair Tom Price; House Budget Committee Ranking Member Chris Van Hollen; Senate Appropriations Committee Chair Thad Cochran; Senate Appropriations Committee Ranking Member Barbara Mikulski; House Appropriations Committee Chair Hal Rogers; House Appropriations Committee Ranking Member Nita Lowey, to oppose additional cuts to conservation, nutrition assistance and the farm safety net.

"Two years ago, Congress passed a bipartisan farm bill that made a significant contribution to deficit reduction," the letter said. "This bipartisan legislation was estimated to contribute $16 billion to deficit reduction over 10 years. These difficult cuts resulted from hard choices made to reform and reduce the farm safety net, conservation programs and nutrition assistance programs. Some of the reforms made in the new farm bill are still being implemented.

"We urge you to oppose any additional cuts for the agriculture committees in the FY 2017 appropriations process as well as proposals to re-open any title of the farm bill during the consideration of the 2017 budget resolution."

Among the 250-plus groups signing the letter include the Ag Retailers Association, American Association of Crop Insurers, American Soybean Association, National Corn Growers Association, National Pork Producers Council, National Farmers Union and The Fertilizer Institute.

In addition, the groups are urging lawmakers to "refrain from including reconciliation instructions for either the Senate Committee on Agriculture, Nutrition, and Forestry or for the House Committee on Agriculture.

"These committees have already done the hard work to make the difficult choices necessary to deliver bipartisan cuts, which the farm and food community have accepted in securing agriculture's contribution to the goal of federal deficit reduction."

In February the Obama administration announced its proposed USDA budget calling for cutting crop insurance $18 billion during the next 10 years -- the single biggest cut in mandatory spending.

DTN Ag Policy Editor Chris Clayton reported the crop insurance cuts would account for 31% of $58 billion in proposed mandatory cuts.

The administration's plan calls for reducing the farmers' subsidy by 10 percentage points for harvest-price revenue coverage and reforming coverage for prevented planting. Effectively, the plan would call for capping the premium subsidy for these policies at 50% of the total premium.

Obama administration proposed crop-insurance cuts have made it into final budget deals.

In the fall of 2015, the administration struck a deal with then-Speaker John Boehner to cut crop insurance $3 billion across 10 years by reducing the percentage of profits that crop-insurance companies could keep. Those cuts were reversed just weeks later following opposition from members of Congress and farm lobbyists.

In USDA's budget 71% of funding goes to nutrition assistance -- which is predominately the Supplemental Nutrition Assistance Program; 16% goes to farm and commodity programs; 7% goes to conservation and forestry; and 6% goes to everything else, including rural development and research.

Because of lower commodity prices, USDA anticipates higher spending for the Agricultural Risk Coverage and Price Loss Coverage programs for 2017. The programs were estimated to cost $5.54 billion in fiscal year 2016, but that spending is budgeted to increase to about $9.6 billion combined for ARC and PLC in 2017.

Payments for all direct subsidies, including dairy, are projected to increase from $6.7 billion in fiscal year 2016 to $10.2 billion in 2017.

Sen. Debbie Stabenow, D-Mich., said in a press statement budget certainty is important for farmers.

"The Farm Bill coalition –- made up of more than 250 farm, food, conservation and nutrition groups -- are again standing strong against potential cuts from Congress," she said. "It's important that we keep the farm bill intact through the budget and appropriations process to provide the full five-year certainty promised in that bipartisan bill."

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