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Tea Party Victory Will Shine Light on Ag Spending

December 27, 2010
By: Roger Bernard, Farm Journal Policy and Washington Editor
Agriculture programs will become a major focus of anti-spending crowd when Congress reconvenes.
Editors note: AgWeb editors and readers have weighed in on the top stories of 2010 that will continue to be a major story in 2011. This is the first in a five-part series. (Read all of the major stories.)
The 112th Congress will begin in January with the focus expected to be squarely on addressing the rising tide of federal budget red ink. That focus was telegraphed well in advanced as many the Tea Party candidates in the November elections campaigned on that as their main focus -- cutting government spending.
Farm program spending is one area that will come into focus, despite the fact that the "farm" portion is a splinter of the spending block. Of the programs under the control of the House Ag Committee, the 10-year cost of the commodity portion amounts to 0.15% of the overall federal budget. Even nutrition programs which make up 75% of USDA spending amount to just 1.62% of the overall 10-year federal budget.
Not Just One Group. So what impact will the Tea Partiers have? "The Tea Party is not just one group, but their impact is clear," says Jim Wiesemeyer of Informa Economics. "They want to cut spending. Period. And Republicans and moderate Democrats who do not heed that charge could find Tea Party candidates against them if they are up for reelection in 2012 -- especially the primaries, where the Tea Party is most effective."
That definitely was the case in November 2010, as even though the Tea Party candidate in a given race may not have won, their focus on spending put the eventual winner on notice that they better be ready to get serious about reducing the federal budget deficit.
Will agriculture be spared despite the fact the spending amounts to so little of the overall federal budget? No. But where can lawmakers look? Of the House Ag Committee’s projected $924 billion, 10-year budget, nutrition programs account for 75.3%, crop insurance 9.0%, conservation programs 7.0%, commodity programs 6.9% and "other" at 1.7%.
Food and Nutrition. Focus on Clearly, nutrition is the largest component but will be the hardest to cut – not all that many lawmakers have farmers in their districts, but all have "eaters." And, after all, that could be a dicey argument for a lawmaker to put forward to reduce this benefit to families at a time when the U.S. economy is only starting to pull out of the recession. But, it is still the largest chunk of spending that lawmakers on the Ag panels have to work with.
Some suggest one option could be to shift eligibility requirements for the program to make sure that only those who truly need the benefits are receiving them. That could be "easier" than some think given that this could fall under the category of rooting out waste, fraud and abuse. That will be a tough "no" vote for a lawmaker to cast when put in that light.
Momentum is With Them. But the Tea Party is a force to be reckoned with says Randy Russell of the Washington consulting firm Russell and Baron. "People need to recognize this was a grass-roots effort that took ahold in a matter of less than 18 months," he notes. "They will be a force to be reckoned with. The types of Tea Party members elected are going to be members that won't be as interested in being career politicians, but rather to go about the business of reducing the deficit, cutting spending, keeping taxes under control and making sure the regulatory environment is kept in check. Frankly, it just might be the change Washington needed."
So as the 112th Congress gets set to kick into action, they have a tall order ahead of them. And it's one that will have lasting impacts for agriculture and a host of other U.S. government programs.

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COMMENTS (14 Comments)

Michael - Watauga, SD
Why don't we quit funding foreign country's leave domestic funding alone and let them use their own money. We need to sell them products not teach them how to compete with us.
9:53 AM Dec 31st
Tim Gieseke - MN
I learned awhile ago that everyone else's job is easy and they get paid too much. And now I will get to learn that everyone else's government subsidy is unnecessary except their own. Let's not ask what our country can do for me.....
1:03 PM Dec 28th
FG - cuba, IL
Commodity subsidies should be stopped when corn is above 3.50 and beans above 7.50. Dont' know about other crops.

To that extent the Tea Party is right. However, the Crop Insurance is a expensive joke where the insurance companies win.

And as for Food Stamps. I bet the Tea Partiers won't have the guts to take on this massive entitlement that really drives the USDA budget. Hope I am wrong, but again I will say they will back off on reducing this huge cost. They willl be afraid of "being against the poor" and will allow the use of children as social/political blackmail to preserve the status quo.
12:09 PM Dec 28th
frmn10 - sugar city, ID
Tiny, you need an internship on a farm. Just because the media makes a big deal about $6 corn or $8 wheat they fail to ever mention how much fuel (tripled since 2007) fertilizer (2.5 X) irrigation costs (doubled) (out west we aren't so lucky as the midwest to have mother nature do it for us) parts (doubled) labor (minimum wage increases yes we have to keep up with what other people are paying, or we can't find the help) and we don't just put in a few 80 hr weeks, and then the increased costs of borrowing money from banks due to new obama regulations. Starting in april on our farm since we can't afford all the help we need we put in close to 100 hours a week and it doesn't end till harvest is complete mid October. It's starts with planting and keeping equipment moving 18 - 20 hrs/ day then we start irrigating still with the same hours and then harvest comes. We plant wheat, peas, alfalfa, and potatoes and there have been years including last year where harvest happens all at the same time because of the weather. It was a short cold wet season for us. Yields were down quite a bit. It costs us over $7/ bushel for the wheat to raise it and that is just actual cost, nothing there for equipment updates, farm expansion, unpaid family labor (me) or other types of opportunity costs. Sold most for just under that $7 mark. Then potatoes they cost $2200/ ac to raise and right now the return is $2100.

So before you stuff some more food in your face why don't you come on out and I'll put you to work so you can appreciate the cheap safe food you eat.
9:58 AM Dec 28th

What we really had in mind when we voted for Republicans who pledged to reduce spending was that they would reduce spending on things that dont effect us. But I wouldnt worry too much about it. Politicians dont get elected taking things away. They get elected by giving things away.
8:42 AM Dec 28th
gbosfarm - CORNING, IA
Well, Tiny, you should follow me around for ANY month of the year. You wouldn't have time for any thing else. The livestock farmers are working, or on call all the time and are not getting rich. I am all for phasing out direct payments. They helped keep us in business through the 80's and the 90's. You have no concept of the sacrifices we made, or the skill levels we have. Even when us 'rich' guys sell corn at $6, there is still only 12 cents of corn in a 20 oz bag of Doritos, costing what? $4 ?
10:10 PM Dec 27th
Let me know if the family of 4 netting $250,000 has a daughter over 18 that I could introduce to my son. Not too many young people are interested in the hard work and long hours needed to be in the business. I find it amazing that farm families would share their finances with a stranger.

Are you basing your comments on a unique farm family situation or your knowledge of farming across the country. The families I know have two jobs outside the farm to make ends meet. That means 40 hours a week, plus the farm. The farms have been in the family and they are trying to stay in agriculture. For farmers in small farms (80 cows or less) dairy business, it has been tough to pay off loans AND invest in the business.
9:51 PM Dec 27th
I don't know 2 farmers in the county that can say they work 80 in two weeks except for 6 weeks in the spring when it is time to plant and 6 weeks if the fall when it is time to harvest and do tillage. If it takes 6 weeks to do either there is some major whining going on about the weather.

Beans are over $10.00, corn is near $6.00. Why are there still direct payments being made to farmers? Millionaries getting checks because they have acres signed up at the county FSA office is the current farm program.

The Federal Government is keeping ethanol from being imported into the country when gas is over $3.00/gallon while renewing the subsidy for both ethanol and biodiesel. How much help does the grain farmer need???!!!!
8:10 PM Dec 27th
Truth Hurts - Fulton, KY
Midwest2010 sorry you feel that way. You don't say much when your using your hard earned money to buy that steak on friday nights. Well it takes a corn farmer to raise the grain to feed that cow and he works 80 hours a week and dont get a check for overtime and the man that raised thatcow works 365 days a year tending that cow. So if you had to pay what it would cost for steak out of your pocket without a little government help, I would be willing to bet your 9 to 5 job couldn't afford to buy the steak.

4:34 PM Dec 27th
Midwest2010 - Green Lake, WI
I don't care how the numbers are fudged, or if it's 'only' 1% or 'only' a few billion dollars. A waste is a waste. When everyone else has to work 9-5 for a paycheck, and some of the farmers I personally know, net $250,000 for a family of 4, and still get another $85,000 in subsidies and program payments. That is farming the taxpayer (me), not the land.
4:14 PM Dec 27th



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