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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