WASHINGTON, March 21, 2012 -A 10-year, $31-billion cut to direct payments and crop insurance proposed by House Budget Committee Chairman Paul Ryan on Tuesday is too much, according to the two largest U.S. farm organizations.
“That’s way more than agriculture’s fair share,” said Mary Kay Thatcher, a senior director of congressional relations at the American Farm Bureau Federation.
“Once again, we see that Congress is attempting to balance the budget on the backs of rural America,” complained Roger Johnson, president of the National Farmers Union. “The proposed cuts to agriculture spending would severely constrain the ability of the next farm bill to provide policy that protects against yield losses and when markets collapse.”
All told, the Ryan budget aims to reduce Farm Bill funding by approximately $181 billion over the next decade - $15.5 billion for commodity supports, $15.5 billion for crop insurance, $16 billion for conservation and $134 billion for nutrition assistance, virtually unchanged from last year’s proposal.
By comparison, House and Senate Agriculture Committee leaders recommended putting farm bill programs by $23 billion last fall in a proposal to the failed deficit-reduction “super committee.”
This time around, the House GOP Budget Resolution also includes reconciliation requiring the Agriculture Committee to decide by April 27 how to come up with farm policy changes that result in 1-, 5- and 10-year savings of $8.2 billion, $19.7 billion, and $33.2 billion respectively.
Rep. Collin Peterson, D-Minn., the top Democrat on the House Agriculture Committee, said the proposal “all but guarantees” there will be no new farm bill this year, even as the panel’s chairman vowed to continue to “work tirelessly” to enact new multi-year farm legislation before current law expires on Sept. 30.
“This budget as proposed does nothing to strengthen production agriculture,” said Senate Agriculture Chair Debbie Stabenow. “Instead, it will hurt families and America’s economy at a time when we need to be creating jobs.”
Ryan’s 99-page fiscal 2013 version of The Path to Prosperity: A Blueprint For American Renewal represents the GOP’s election-year plan for reversing years of big-dollar budget deficits and restoring economic growth. It proposes $5.3 trillion in government-wide spending cuts and entitlement reforms, and $2 trillion in tax reductions to shrink the deficit $3.3 trillion below President Obama’s latest plan.
The Budget Committee was expected to mark up the bill Wednesday.
Holding a copy of Path To Prosperity in his hands, Ryan told reporters at a Capitol Hill press briefing “There’s about a hundred pages here of details which are food stamp reform, welfare reform, federal employee reform, agriculture reform – I can go on and on but that’s the bulk of where the savings come from.” Compared to an overall economy that is recovering slowly, the document notes, the U.S. agriculture sector is improving dramatically.
“The record-breaking prosperity of American farmers and farm communities . . . calls for a re-examination of federal agricultural programs that spend billions each year. Taxpayers should not finance payments for a business sector that is more than capable of thriving on its own.
“With farm profitability – and deficits – continuing at high levels, it is time to adjust support to this industry to reflect economic realities,” he added.
The American Soybean Association encouraged Ryan to remember “that the record farm productivity he cites in his budget is a direct result of policies that help those farms grow.”
There is no connection between the $30 billion cut mentioned for agriculture in the Path to Prosperity document and the $33.2 billion required for reconciliation, according to a GOP source. The Ryan budget recommends two major reforms to the 2012 Farm Bill safety net: a reduction in Direct Payments and fewer subsidies for crop insurance premiums, “so that agricultural producers assume the same kind of responsibility for managing risk that other businesses do.”
“Do I think you can get more reform out of crop insurance subsidies? Yes, I do,” the Wisconsin Republican replied when reminded that government funding for the primary safety net program for farmers had already been cut by $12 billion over the past four years. The latest Congressional Budget Office budget baseline projects crop insurance budget authority through 2022 at $89.8 billion, up about $9.5 billion from CBO’s March 2011 report. Agriculture Committee leaders on both sides of Capitol Hill have pledged to keep the funding intact in a new farm bill.
The spending cuts sought by Ryan would leave the committees with roughly $116 billion in which to craft the Commodity and Crop Insurance Titles of the next farm bill, Agri-Pulse has learned. House Ag Chair Frank Lucas cautioned stakeholders against reading too much into the numbers or proposals contained in Ryan’s blueprint, referring to them as simply suggestions.
“During our process, both policy and deficit reduction targets will be developed in conjunction with Ranking Member Peterson and Members of the Committee as we write a fiscally responsible Farm Bill that ensures Americans continue to have a safe, affordable, and stable food supply," Lucas said.
Peterson said Ryan’s proposal to significantly cut farm and conservation programs, and slash spending on nutrition programs - by far the biggest component of farm bill spending - is indefensible. “It is appalling that in an attempt to avoid defense cuts the Republican leadership has elected to leave farmers and hungry families hurting,” Peterson said.
Under the Ryan budget, the Supplemental Nutrition Assistance Program (SNAP) would be converted to a state-run block grant program and automatic categorical eligibility for benefits would be eliminated. Currently, a record 46 million Americans are enrolled in the program. The latest CBO budget baseline projects budget authority for nutrition programs through 2022 at $771.7 billion, up about $71.9 billion from CBO’s March 2011 report.
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Original story printed in March 21, 2012 Agri-Pulse Newsletter.
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