WASHINGTON, Feb. 13- Agriculture Secretary Tom Vilsack defended President Obama’s USDA budget plan for FY 2013 today, calling the proposed plan “a stable budget.”

The amount of the discretionary spending at $23 billion for FY 2013 is roughly the same as 2011, he said. The proposal outlines $32 billion in savings from mandatory spending by eliminating direct payments, reducing crop insurance subsidies and conservation funding while increasing investments in research and alternative energy. 

Regarding possible challenges in Congress to pass a plan that includes such an emphasis on food stamps, nutrition and energy dollars, Vilsack said “anytime there is disagreement, there is opportunity for education to explain how our programs really work.” 

He said “trade-offs” in the President’s budget include 30 programs that are eliminated or reduced. Vilsack also said the proposal reduces the percentage allocated to nutrition programs from 75 to 72 percent of the entire USDA budget. The plan preserves Supplemental Nutrition Assistance Program spending and provides $7 billion for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). 

The proposed fiscal 2013 budget provides $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 to save the government roughly $23 billion over 10 years. 

“The general consensus is that direct payments are going to change,” Vilsack said. “It’s hard to explain to 98 percent of the population that doesn’t farm why farmers are receiving payments when we’re seeing record income levels.”

“More than 50 percent of direct payments go to farmers with more than $100,000 in annual income,” according to budget document.  “Eliminating these payments would and build a better farm safety net.”

Vilsack emphasized the importance of maintaining a revenue protection program for farmers and ranchers, saying the department will work with Congress to provide crop insurance and a safety net. Obama’s proposal does not provide an alternative protection program, other than suggesting continued funding for the Supplemental Revenue Assistance Payments program (SURE).

“The safety net is going to change, but we’ll continue to see one,” Vilsack said. “We plan to work with Congress and require continued commitment to crop insurance as well as disaster assistance. We encourage Congress to extend these disaster payment programs in some form in the 2012 Farm Bill.”

The changes to the crop insurance budget are essentially the same the administration’s previous suggestions, said Vilsack. Savings in the crop insurance program 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.

The budget increases the 2012 funding level for the Agriculture and Food Research Initiative to $325 million, which is a $60 million increase from the 2012 level. 

“Our ability to be productive and meet demands in the future is directly related to our capacity to continue researching,” Vilsack said. “And we are proposing additional increases in our competitive grants program.”

The proposal also increases in-house research “in select areas such as crop protection, sustainable agriculture and food safety” by $75 million.

Obama’s proposal invests $6.1 billion in renewable and clean energy and environmental improvements with $200 million dedicated to biofuels and $19 million for the Rural Energy for American Program (REAP). 

“There’s a tremendous opportunity here in terms of bio-based economy,” he said. “By seizing it, it doesn’t mean a whole lot of additional money has to be created, but you have to give us flexibility within our existing programs to use money more effectively.”

Vilsack said the Conservation Reserve Program will be capped at 30 million acres.  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.”


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