WASHINGTON,
Apri 17, 2013 – While noting that “we do not envy your position,” in the
current budget environment, American Farm Bureau
Federation (AFBF) President Bob Stallman took issue with Secretary Tom Vilsack’s plan to cut
direct payments by 8.5 percent as part of the agency’s sequestration cuts.
“It
was disappointing and unfortunate that Congress and the administration could
not pass a budget agreement to avoid sequestration,” Stallman wrote in a letter
to Secretary Vilsack.
“Under
these circumstances, we do not oppose “doing our fair share” and having direct
payments reduced by the 5.1 percent sequestration level. We do, however, oppose
the additional 3.4 percent reduction that is being applied only to those
participating in the direct payment program.
“We
strongly oppose penalizing those 315,000 farmers who receive direct payments by
adding on an additional $156 million hit because reductions in other programs
are difficult to sequester elsewhere. It is simply not fair,” he added.
On
March 19, Vilsack notified Congress that the agency intended to use its
interchange authority to transfer $156 million from the direct payment program
to several other Farm Service Agency programs.
According
to USDA, this will address a portion of the federal spending cuts known as
“sequestration.”
“It
is our understanding that $156 million will be taken from direct payments made
to farmers in October to offset the sequestration costs of (a) the Supplemental
Revenue Assistance Payments Program (SURE); (b) the Tobacco Transition Payment
Program; (c) the Marketing Assistance Commodity Loans Program; (d) the Crop
Cash Loan Deficiency Payments Program; (e) Storage and Handling Programs; (f)
the Noninsured Crop Disaster Assistance Program (NAP); and (g) the Milk Income
Loss Contract Program (MILC). The effect of this change is to reduce the direct
payments farmers are expecting to receive in October 2013 by 8.5 percent from
what they anticipated when they enrolled in the program,” Stallman continued.
“You
have said that 350,000 producers are affected by sequestration under all eight
of these programs, but that about 90 percent of those producers would be
receiving direct payments in October,” Stallman explained. “Therefore, about
35,000 producers and others received payments from one or more of the other
seven programs but are not due to receive direct payments. Taking funds to
offset the “excess” payments to these 35,000 producers would shift the
sequester burden to those 315,000 producers by an average of $500 per producer.
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