WASHINGTON, February 12 - President Obama’s fiscal 2013 budget proposes $23 billion in discretionary spending for USDA, down nearly 3 percent or almost $700 million from the amount appropriated for the current fiscal year, and suggests $32 billion in savings over the next decade in mandatory program spending on commodity programs, crop insurance subsidies and conservation programs.
The administration is proposing to eliminate direct payments to grain, cotton and oilseed producers “Direct payments do not vary with prices, yields, or producers’ farm incomes,” the budget documents say. “As a result, taxpayers continue to foot the bill for these payments to farmers who are experiencing record yields and prices; more than 50 percent of direct payments go to farmers with more than $100,000 in annual income. Eliminating these payments would save the government roughly $23 billion over 10 years and build a better farm safety net.”
Savings in the “highly subsidized” crop insurance program – which now costs $10 billion a year, $3 billion for insurance companies to administer and underwrite the program and $7 billion in premium subsidy – would come by reducing reimbursement to the companies to save $1.2 billion over 10 years and adjusting the cap on administrative expenses to save $2.9 billion over 10 years. A change in the premium for catastrophic coverage will save $225 million. In addition, the administration is proposing to reduce the premium subsidy by 2 basis points for all but catastrophic coverage, saving $3.3 billion over 10 years.
“Crop insurance has contributed more than $12 billion towards reduced government spending and deficit reduction since 2008. And since 2008, private crop insurance companies have put more than $27 billion into the hands of farmers and ranchers to help them pick up the pieces after disasters. Simply put, the crop insurance industry has done more with less,” Zacharias said.
“Unfortunately, the additional disproportionate reductions being proposed would weaken a crop insurance infrastructure at the very time we need it the most. We fear such reductions would undermine the successful public-private partnership that was specifically designed by Congress to minimize taxpayer exposure to risk.
The budget would reduce conservation spending by $1.8 billion over 10 years by “better targeting conservation funding to the most cost-effective and environmentally-beneficial programs and practices.” Even under this proposal, conservation assistance is projected to grow by $60 billion over the next decade, assuming continuation of the current farm bill baseline.
Other highlights of the budget, released by the Office of Management and Budget:
-- Discretionary savings are achieved through ongoing efforts to streamline operations, reduce costs, and close offices, and these savings are redirected into critical activities in recognition of tighter budget constraints.
-- Modernizes service by redirecting staff to areas of greatest need without reducing or disrupting service to customers.
-- Invests $6.1 billion in renewable and clean energy and environmental improvements to spur the creation of high-value jobs, make America more energy independent, and drive global competitiveness in the sector.
-- Increases the 2012 funding level for the Agriculture and Food Research Initiative to $325 million and targets areas that are key to American scientific leadership: human nutrition and obesity reduction; food safety; sustainable bioenergy; global food security; and climate change.
Contributes to the job creation and economic growth goals of the White House Rural Council by continuing to fund programs that effectively promote renewable energy, job training, infrastructure investment, access to capital, worker training, and green jobs throughout rural America.
-- Leverages resources and works with Federal, State, and Tribal partners to accelerate voluntary adoption of agricultural conservation practices to improve water quality.
-- Provides $7 billion for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) for low-income and nutritionally at-risk pregnant and post-partum women, infants, and children up to age 5.
-- Supports State, local, and Tribal efforts to serve healthy meals and snacks to schoolchildren.
-- Preserves a strong Supplemental Nutrition Assistance Program to prevent hunger for millions of Americans.
-- Conserves landscapes and promotes outdoor recreation in national forests and on working lands through the America’s Great Outdoors initiative.
-- Continues efforts to restore significant ecosystems such as the California Bay-Delta, Everglades, the Great Lakes, Chesapeake Bay, and the Gulf Coast, helping to promote their ecological sustainability and resilience.
“Crop insurance has contributed more than $12 billion towards reduced government spending and deficit reduction since 2008. And since 2008, private crop insurance companies have put more than $27 billion into the hands of farmers and ranchers to help them pick up the pieces after disasters. Simply put, the crop insurance industry has done more with less.
“Unfortunately, the additional disproportionate reductions being proposed would weaken a crop insurance infrastructure at the very time we need it the most. We fear such reductions would undermine the successful public-private partnership that was specifically designed by Congress to minimize taxpayer exposure to risk.
“Farmers and lawmakers agree that crop insurance is the primary agriculture risk management tool. It is the centerpiece of modern-day farm policy, and we look forward to working closely with Congress and our partners in the Administration to ensure it will underpin farm policy's future.”
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