Farm program cuts to prevent sequestration spur concern

Feb 22, 2013

As Congress continues to bicker and fight itself into a standstill over economic woes, agricultural spending is on a very short list for shearing. The most recent proposal is one many say cuts too deep.

On Valentine’s Day, Senate Democrats suggested a $110 billion measure which would theoretically fend off the mandatory spending cuts coming March 1. The proposed package recommended replacing the spending cuts (often referred to as “the sequester” or “sequestration”) would shift the economic onus onto, among other things, agriculture.

The proposition would cut funds between defense and non-defense spending. For agriculture, the proposed reduction would come from ending agriculture subsidies and support programs estimated at $27.5 billion over the next decade.

While Congress has been able to agree on one thing— the sequester would be bad— how to go about preventing it while still cutting government spending and reducing the deficit is far from an easy matter.

The issue has, of course, attracted significant partisan sound bites from those involved. Cuts to military spending and suggestions of tax increases have gained the most attention. Senate Republicans have loudly opposed any new taxes, calling them “tax hikes,” while Senate Democrats have argued that refusing the possibility of increased revenue through taxes is “prioritizing tax loopholes.” And matters of proposed military spending cuts have boiled down to one side accusing the other of inefficiency and the other side firing back with suggestions of a weakened America.

While the oft-cited figures of “middle-class families” and “hard-working Americans” were held up by both sides in their arguments over taxes and military spending, the proposed cuts’ impact on agriculture was only scantly addressed. A few senators made comments on the agricultural impact, but it was not a central point of attention.

“Billions in direct payment subsidies are paid out even in good times and for crops farmers aren’t even growing,” said Sen. Debbie Stabenow, D-MI, chair of the Senate Committee on Agriculture, Nutrition and Forestry, in her support of the cuts.

Agricultural concerns, however, were ready with responses.

“While initially we are encouraged that a new $110 billion fiscal policy proposal from Sen. Majority Leader Harry Reid, D-NV, would help put our nation on the long road toward greater fiscal responsibility, the details on how he proposes to do so raise strong concerns,” said Bob Stallman, president of the American Farm Bureau Federation (AFBF).

“It appears the lion’s share of budget reductions will come from cuts to agricultural programs that will create much harm in farm country. More than $27.5 billion in net spending reductions are earmarked for farm programs—with all the cuts coming from the elimination of direct payments with no provision to allow use of some of the savings for reinvestment in new safety-net or risk-management concepts.”

AFBF wasn’t the only group to oppose the move.

According to DTN’s Chris Clayton, 14 farm organizations signed onto a letter Tuesday, Feb. 19 to Reid raising their concerns over a Senate proposal. In addition to AFBF, signers were American Soybean Association, National Association of Wheat Growers, National Barley Growers, National Cotton Council, National Council of Farmer Cooperatives, National Sorghum Producers, Southern Peanut Farmers Federation, U.S. Canola Association, U.S. Dry Bean Council, USA Dry Pea & Lentil Council, USA Rice Federation and the Western Peanut Growers Association.

“Your proposed legislation seriously undermines efforts to advance much-needed reforms to meet the long-term risk management needs of America’s family farmers,” the letter reads.

“While our grower members are prepared to contribute their fair share of cuts to help reduce our nation’s unsustainable deficits, we cannot support a doubling of reductions in the commodity title funding.”

USDA also released a letter Tuesday—written earlier in February by Agriculture Secretary Tom Vilsack to Senate Appropriations Chairwoman Barbara Mikulski, D-MD— citing the impact of various cuts USDA will have to implement under the sequester.

Vilsack said USDA would have to “indiscriminately reduce funding for USDA programs further by almost $2 billion” in fiscal year 2013.

Again according to Clayton, a couple of the biggest cuts would be a reduction of 600,000 low income women and children who receive assistance through the Women, Infants and Children program. While the majority of the cuts would hit discretionary spending, about one-third of the cuts would affect mandatory programs under the farm bill.

Vilsack cited a “nationwide shutdown of meat and poultry plants during a furlough of inspection personnel.” A furlough could cost as much as $10 billion in lost production for the meatpacking industry.

“The magnitude of these proposed cuts will hamstring the House and Senate Agriculture committees from crafting a farm bill that includes the safety-net and risk-management provisions that our farmers need,” continued Stallman in his statement.

In their letter to Reid, the farm groups stated they understood the bill proposed by Reid and other Senate Democrats would restore funding to 24 programs at USDA, including disaster aid for livestock, fruit and vegetable producers. Still, the groups want budget decisions on farm programs to be made by the Senate Agriculture Committee.

“It is vital that a realistic portion of the proposed funding cuts to agriculture be reinvested to support risk-management programs that are so vital to farmers and ranchers,” continued Stallman.

“We recognize that the proposal provides for some of the savings to be redirected to extend key disaster programs left in the lurch by the New Year’s tax deal and several other expiring provisions in the farm bill. But in order to address the constant perils of market instability and potential yield loss, farmers need a stable risk-management program.”

The issue of fairness—that word being another favorite word wielded by both Senate Republicans and Democrats against one another, along with “fair share”—is large in the minds of agricultural groups. The fact the proposed cuts would come from defense and agriculture almost entirely struck many as very much unfair.

“We recognize there are many steps on the road toward restoring fiscal responsibility to our federal government and that some will be painful. That pain, however, should be a shared experience and not take such a heavy toll from any one sector. Once again, agriculture is being asked to step up to the cutting table and hand over substantially more than its fair share. We sincerely hope our lawmakers are not eating the seed needed to sow a viable risk-management program to help secure our nation’s crops and livestock.” — Kerry Halladay, WLJ Editor