Tuesday, February 02, 2010
USDA’s New Budget Proposal: What Is Increased And What Is Decreased?
With a year of agricultural policy issues and production challenges under its belt, the Obama Administration revealed its recommendations for USDA spending in the fiscal year that begins in October. The 138 page budget message that will be conveyed to the House Agriculture Committee confirms expectations and contains some surprises. The Cornbelt farmer is provided with quite a few issues that can be debated in coffee shops and on Internet chatboards.When releasing the FY 2011 budget, the White House called for a freeze on discretionary spending for the next three years, in an effort to reduce the deficit. The big ticket items in federal spending, including defense, Social Security, and interest, are not subject to the freeze, but many of the USDA programs fall under the category of discretionary spending. The USDA budget proposal is rather tedious to read, and may take quite a while to decipher the messages between the lines, but it offers some direction for agriculture to take until it gets to Congress. At that point, the steering wheel may be turned one way or the other and some course corrections may be made. Until then, there are some budget proposals that are notable, compared to FY 2010 appropriations:
1) $3 million more for the National Agricultural Statistics Service to improve the quality of county-level estimates, funding by elimination of a ten year land ownership survey and cancellation of the census of aquaculture.
2) $42 million more for the Ag Research Service to fund bio-energy, world hunger, obesity, and climate change research, with $53 million in cuts from prior year Congressional earmarks.
3) $166 million more for the Agriculture and Food Research Initiative, in which researchers compete for funds for the most worthy research projects, while the guaranteed perennial research funds to universities was retained at $215 million. The budget eliminated $141 million in funding of university research proposed by Members of Congress.
4) $21 million less for Extension funding of agriculture, horticulture, and 4-H educators.
5) $700 million more to make crop insurance indemnity payments, but reduce the reimbursement rate to crop insurance companies and save $8 billion over the next 10 years.
6) Up to $160 million less for the Market Access Program that promotes US commodities overseas, and instead promote generic American products overseas, and reform the program so it will save $366 million over the next 10 years.
7) Reduce the cap on Direct Payments from $40,000 to $30,000, and reduce the payment cap to $24,000 for those producers who signed up for the ACRE program.
8) Tighten payment eligibility by moving the Adjusted Gross Farm Income eligibility limit from $750,000 down to $500,000, and make the change over a three year period. The budget message said there was a need for more fiscal responsibility and that necessitated re-examination of payments to wealthy individuals.
9) $500 million more would be added to the Wetlands Reserve Program and $629 million more for the Conservation Stewardship program, all to enroll more acres.
10) Eliminate the Resource Conservation and Development program and save $50 million.
11) Reduce $59 million from the Rural Development Agency
12) Increase $63 million for the Foreign Agriculture Service to help with exports.
13) Increase the Food and Nutrition Service by $2.8 billion, up to $75 billion, the largest segment of the USDA budget.
Summary:
The budget proposed by the White House and the Secretary of USDA will be analyzed and undoubtedly modified when it gets to Capitol Hill. In the meantime many farm organizations and their lobbyists will be pushing and pulling to increase certain line items at the expense of others. Significant in the administration proposal were the concept to reduce Direct Payments and ACRE payments that were set in the 2008 Farm Bill, and to raise funding for agricultural research, in a year in which discretionary spending was being held in check.
Posted by Stu Ellis on 02/02 at 01:11 AM | Permalink