WASHINGTON, Feb. 2, 2016 - Congressional leaders gave a frigid reception to President Obama’s  budget proposal for USDA, which includes a recycled plan to save more than $1 billion on crop insurance in fiscal 2017.

Senate Agriculture Committee Chairman Pat Roberts, R-Kan., called the budget proposal “dead on arrival.” 

“As farmers and ranchers are faced with the daily uncertainties of weather and volatile market conditions, the Obama administration has once again chosen to attack America’s agriculture producers and their ability to manage risk,” he said in a statement. “The president is hitting rural America where it hurts most, and all of this is occurring at a time” when farm income for this year, according to USDA, will have plunged 56 percent since 2013.

House Agriculture Chairman Mike Conaway, R-Texas, also slammed the proposal. He said the administration should find savings instead “by taking long-overdue action to stop high and rising foreign subsidies, tariffs, and non-tariff trade barriers that unfairly depress the prices American farmers and ranchers receive in the market and to stop layering new and costly regulations, like EPA’s Waters of the U.S. regulation, on our nation’s farm and ranch families.”

Agriculture Secretary Tom Vilsack said USDA is proposing the cuts because of Inspector General and Government Accountability Office reports criticizing management of the crop insurance program. He said USDA should be able to pay a smaller portion of crop insurance premiums. The department is currently subsidizing about 62 percent of the value of crop insurance premiums, but Vilsack said, “We think... it should be closer to 50 percent.”

The proposed cuts would reduce premium subsidies for revenue policies that have a harvest price option (HPO) and eliminate buy-up coverage for prevented planting insurance. The cuts would save an estimated $18 billion over 10 years and $1.26 billion in fiscal 2017.

Tom Zacharias, president of National Crop Insurance Services, said he thinks Congress will reject the proposal. “I don’t think this goes very far, quite frankly,” he said.

“It’s unfortunate that the crop insurance safety net remains a focus of administration proposals for spending reductions in agriculture,” Zacharias said. “This is a time when farmers would rely on crop insurance as much now as any other time. It’s important to keep this safety net in effect and viable.” The proposal “raises the cost of farmers to do business (when) they’re already being squeezed in terms of farm income,” he said.

USDA’s proposed budget for fiscal 2017, which begins Oct. 1, includes $126 billion in mandatory spending and about $25 billion in discretionary spending. The mandatory spending is for programs such as crop insurance, nutrition assistance, farm commodities, trade, and conservation. Obama’s spending plan for the U.S. government as a whole is $4.1 trillion.

In a conference call, Vilsack highlighted increases for agricultural research and the launch of a new summer feeding program for disadvantaged children – two proposals he said he hoped Congress would take seriously.

He also noted that the budget proposal for fiscal 2017 would change the way wildland fire management is conducted. The plan funds suppression for the most severe fire activity, including large fires that require emergency response, are near urban areas, and for abnormally active fire seasons, “as extraordinary costs that are outside the discretionary budget caps,” USDA said. “The budget recognizes such fires as natural disasters. Importantly, because this funding would not allow the total funding available under existing cap adjustments to grow, it would not increase overall discretionary spending.”

Vilsack also said he hopes Congress approves funding to put USDA in Cuba, “a market American agriculture should dominate.” In 2014, Cuba imported over $2 billion in agricultural products including $300 million from the U.S.

“USDA needs an in-country presence in Cuba to cultivate key relationships, gain firsthand knowledge of the country’s agricultural challenges and opportunities, and develop programs of mutual benefit to both countries,” the department’s budget summary said. Vilsack could not provide specific details of how the “in-country presence” would work.

“The goal here is to alert Congress to the fact that there is an expanded trade opportunity available in Cuba,” Vilsack said. “I don’t think we currently have the authority to fund personnel” there. “That’s why we’re asking for this in the appropriations process to essentially provide us congressional directive.”

The National Sustainable Agriculture Coalition praised the budget request for “preserving farm bill funding for private lands conservation programs, including the Conservation Stewardship Program and the Environmental Quality Incentives Program. For the first time in years, the budget proposes no new cuts to these critical programs.”

NSAC also was pleased with the proposed increases in research funding. In addition to seeking a boost for the Agriculture and Food Research Initiative (AFRI), spending for the Sustainable Agriculture Research and Education (SARE) program would go from $24.7 million to $30 million. 

The budget would boost funding for agricultural research in three areas:

·         $700 million for grants through USDA’s Agriculture and Food Research Initiative (AFRI), including $325 million in mandatory funding, double the 2016 funding level. “AFRI-supported research would enable USDA to respond to critical problems and challenges facing the nation such as ensuring an abundant supply of safe water for agricultural uses, responding to climate change, understanding and restoring soil health, and improving food safety and quality,” the president’s budget proposal said.

·         $1.2 billion for “in-house research” at the Agricultural Research Service, which includes increases for current and new programs for climate change resilience and vulnerability, pollinator health, agricultural microbiomes, responding to antimicrobial resistance, as well as research on foreign animal diseases, soil health, avian influenza, and for safe and abundant water supplies to support agricultural production,” the president’s budget said.

·         $94.5 million for “construction and renovation of key infrastructure investments based on USDA’s facility modernization plan,” according to the president’s budget. USDA said the proposal would fund “modernization of the Foreign Disease – Weed Science Research Laboratory, where scientists research foreign plant pathogens that pose a potential threat to American agriculture.”

·         Another area that would get an increase is antimicrobial resistance. USDA would boost funding to $61 million, “an increase of about $35 million to address antimicrobial resistance in pathogens of humans and livestock, and to seek answers to key questions about the relationships among microbes and livestock, the environment, and human health.”

The Food and Drug Administration, is asking for $5.1 billion for the next fiscal year, including increases of $14.6 million in budget authority and $268.7 million in user fees “for initiatives tied to several key areas, including the implementation of the FDA Food Safety Modernization Act (FSMA) and efforts to improve medical product safety and quality,” FDA said.

Both the user fee proposal and the amount of funding for food safety drew fire from the National

Association of State Departments of Agriculture. “The $25.3 million increase for FDA’s food safety activities … moves in the right direction, but falls far short of the next investment needed in our new preventive approach to food safety for public health,” NASDA CEO Barbara Glenn said. “The $104.5 million appropriated by Congress in December was a great down payment on the programs needed to implement (FSMA). States need a similar increased investment for FY17.”   States will need about $100 million in FY17 to meet the goals of FSMA, she said.

“NASDA is also deeply disappointed by the inclusion of user fees in this year’s budget request,” she said. “User fees have never been supported by NASDA, Congress, or other industry stakeholders. The continued request for user fees by the administration undermines FDA’s efforts to effectively implement FSMA in a timely manner. Without sufficient support of FSMA from the President and Congress, we are setting our producers up for failure.”

American Soybean Association President Richard Wilkins pointed out the association’s disapproval in the budget’s 22 percent cut to funding for the Army Corps of Engineers, which oversees the maintenance and construction of locks and dams on the nation’s waterways. The budget cuts more than 41 percent from the Corps’ construction account, $2.7 billion from the operations and maintenance account, and fails to fund the Navigation Ecosystem Sustainability Program (NESP), a priority for ASA.

Also in the budget proposal, the Land and Water Conservation Fund, would be fully funded at $900 million. The LWCF is funded by offshore oil and gas drilling fees, and distributes grants and matching funds to federal, state and local governments to buy land to establish parks and protect wildlife habitat. The LWCF’s authorization lapsed in September, but was reauthorized in the December omnibus bill for three years despite significant GOP opposition led by House Natural Resources Committee Chairman Rob Bishop of Utah.


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