On Monday, President Obama delivered his budget proposal to Congress. That document, a $3.8 trillion dollar proposal, is purported by the administration as a plan to create jobs and cut deficits. Agricultural interests, however, are none too impressed with the plan’s treatment of our nation’s most essential industry. Groups ranging from the National Farmers Union to the American Soybean Association have criticized the president’s fiscal 2011 budget for its cuts to programs authorized in the 2008 Farm Bill.
According to the budget document released to Congress, “the budget proposes to limit farm subsidy payments to wealthy farmers by reducing the cap on direct payments by 25 percent and reducing the Adjusted Gross Income (AGI) payment eligibility limits for farm and non-farm income by $250,000 over three years.” A cap on farm payments is not a new concept, and has been advocated by fiscal conservatives like Iowa Senator Chuck Grassley for many years. The typical problem with these proposals is that while Midwestern row crop interests, livestock farmers, and specialty crop growers have little argument against them, Southern farmers dealing with capital-intensive crops like cotton and rice find the notion of payment limits to be detestable.
More importantly, beyond the basic notion of limiting payments, most agricultural groups are concerned with basic cuts to Farm Bill programs. Agriculture’s current champion in the Senate, Agriculture Committee Chair Blanche Lincoln of Arkansas, had nothing kind to say about the president’s budget proposal.
“Put simply the president’s proposal picks winners and losers,” Lincoln said. “By targeting policies that rural America relies upon, this proposal places a disproportionate burden on the backs of farmers and rural communities. While I too believe we must reduce the federal deficit, we must all share in this responsibility.”
Lincoln went on to explain, “In 2008, I worked hard to pass a five-year farm bill that was fiscally responsible. This bill contained over $4 billion worth of cuts to farm programs, was completely paid for and did not contribute to the deficit. The Farm Bill is a contract with our farmers that they depend on to make business decisions. Changing the rules in the middle of the game would be detrimental to their operations and would cost us even more jobs in rural America.”
Echoing the feelings of many in Congress regarding executive branch budget proposals, Lincoln concluded, “I thank the president for his recommendations, but Congress writes the budget. I intend to support measures to reduce the deficit but fight many of the president’s proposed cuts that will harm farmers, ranchers and rural communities.”
Senator Lincoln is not the only agricultural advocate to express frustration to the cuts in Farm Bill programming.
“ASA opposed similar proposals by the administration last year that would have reopened the 2008 Farm Bill and undercut long-term economic decisions by soybean producers,” said ASA President Rob Joslin, a soybean producer from Sidney, Ohio. “They were bad ideas then, and they are bad ideas now. Agriculture spending, not including nutrition programs, is projected to account for just over one-half of one percent of next year’s $3.8 trillion budget. Cutting the farm safety net to achieve minimal savings would jeopardize an industry that continues to be a key driver for U.S. economic recovery and export growth.”
Perhaps even more disconcerting, the administration is also proposing changes in the federal crop insurance program that would reduce its cost by $8 billion over 10 years. “Congress already considered these proposals during debate on the 2008 Farm Bill, and rejected them again last year,” Joslin said. “While there may be need for reform in crop insurance administrative payments to companies, any savings should be reinvested to make the program more widely accepted in parts of the country where farmers don’t participate.”
Similarly, National Farmers Union President Roger Johnson added, “NFU understands the nation is faced with a difficult financial situation and we commend the U.S. Department of Agriculture (USDA) for increases in important programs in its proposed budget. However, the cut in crop insurance at $8 billion over 10 years comes as a disappointment, as crop insurance is part of the vital safety net for farmers and ranchers providing a safe and secure food supply.”
As Senator Lincoln pointed out, the Congress writes the budget, not the president. Farmers and agribusiness leaders will spend the next several weeks and months sharing their story with members of Congress, to insure that USDA and Farm Bill Programs continue to support our nation’s most essential industry.