No Farm Subsidy Cuts in Budget Resolution Plans

March 24, 2009 07:00 PM

via a special arrangement with Informa Economics, Inc.

No farm program payment changes, but some ag program cuts to be proposed

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

The Senate Budget Committee chairman said he will not propose cuts in U.S. crop subsidies for Fiscal Year 2010 despite White House proposals to phase out direct payments to some farmers, and to reduce payment limits beyond levels in the 2008 Farm Bill. Budget Chairman Kent Conrad (D-N.D.) called any such moves a mistake during a recession. Senate and House Budget panel members begin work today on a spending blueprint for the government for the fiscal year beginning Oct. 1.

Where the ag cuts may come from. Conrad on Tuesday said that he would save $2.5 billion through cuts in two land stewardship programs, crop insurance subsidies and the Market Access Program (MAP), which shares the cost of building foreign demand for high-value U.S. farm exports. Conrad said he would propose cuts in the Environmental Quality Incentives Program (EQIP), which shares the cost of controlling runoff from fields and feedlots; the Conservation Reserve Program (CRP), which pays owners to idle fragile land; in the federally subsidized crop insurance program, and in MAP, authorized at $200 million a year. Like President Obama's budget proposals, Conrad's plan would cut MAP by $40 million per year.

Similar approach in House. The House Budget Committee is also expected to exclude farm subsidy cuts in its package.

Comments: President Barack Obama and USDA Secretary Tom Vilsack and other administration officials who have been targeting farm program payment changes so soon after the 2008 Farm Bill was signed into law are seeing they are not the masters of the budget process. Farm-state lawmakers who went through the contentious farm bill debate will succeed -- at least while the U.S. economy is in recession -- in fending off any changes to farm program payment caps. But as noted above, Sen. Conrad has targeted agriculture-related cuts in other program areas, so agriculture will, indeed, have to pay its share in budget offsets that will surely be an annual exercise over the next few years.

This should put an end to the Obama/Vilsack ill-fated proposal to phase out over three years direct payments to producers with gross sales over $500,000. And that silly proposal did not just come from the Office of Management and Budget (OMB), I am told, as some USDA personnel were well aware of the proposal and in fact, pushed it.

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


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