By Jon H. Harsch

© Copyright Agri-Pulse Communications, Inc.

Washington, July 14 – Agriculture Secretary Tom Vilsack confirmed Wednesday that USDA will work with Congress to investigate possible diversion of USDA funds for other purposes.

After meeting with House Agriculture Committee Chair Collin Peterson (D-MN) Wednesday, Agriculture Sec. Tom Vilsack told Agri-Pulse that USDA “will cooperate with the Chairman in terms of an inquiry.” Vilsack said Peterson plans a hearing on whether the federal Office of Management & Budget (OMB) may have improperly diverted funds which Congress appropriated for specific USDA programs, in order to fund other government purposes.

Peterson's initial concern is with the federal crop insurance program. The program's just-signed Standard Reinsurance Agreement negotiated by USDA includes a 10-year $6 billion cut in USDA's subsidy for crop insurance, with $4 billion of the savings earmarked for reducing the federal deficit. The remaining $2 billion is being reserved to use as additional funding for USDA's Conservation Reserve Program.

Vilsack said that in preparation for Peterson's House Agriculture Committee hearing, “I am sure that we will provide the information he has requested.”

Vilsack added that “from our perspective, the good news is that we've been able to secure resources to get us to 32 million acres in CRP, which is really the goal here.”

As for whether there could be a pattern of OMB redirecting funds in past years, Vilsack said that “Honestly, I don't know enough about the details of OMB's machinations. I just know that I am focused on trying to get those 32 million acres in CRP, which I think we are going to get done. We will cooperate with the committee and we will provide them with all the information that they are seeking . . . My focus is on the CRP aspect of this and making sure that we have the resources to get up to 32 million acres which we did not have prior to the SRA renegotiation and now we do.”

For an Agri-Pulse report on Chairman Peterson's concern about OMB diversion of USDA funds, go to: www.agri-pulse.com/20100714S_Ag_Committee_OMB_taketh.asp

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