On February 10th, the Trump administration released its proposals for the U.S. federal budget for fiscal year 2021, and it continues the trend of seeking modest cuts to USDA’s discretionary funding levels and proposing major reductions in several key mandatory programs operated by the Department. The President has sought similar sets of cuts in the previous budget proposals he has submitted to Congress for fiscal years 2018 through 2020. Thus far, Congress has not gone along with his proposed reductions, but they do represent the administration’s official perspective on such policies.
Overall, the President’s budget would fund discretionary spending accounts at USDA agencies at $23 billion, a $4 billion (15 percent) reduction from enacted levels for FY20.
USDA is proposing to fund its loan programs run by the Farm Service Agency (FSA) for a total of $8.9 billion in loans, split almost evenly (54 percent to 46 percent) between farm operating and ownership loans. They estimate that loan level would accommodate lending demands by about 35,000 farmers. For the Natural Resources Conservation Service (NRCS), the budget proposes to eliminate funding for watershed and flood prevention operations, reducing overall discretionary funding at the agency by 18 percent. Funding for salaries and expenses at the Foreign Agricultural Service (FAS) would be cut by 10 percent.
Funding for loan programs operated by the Rural Utility Service (RUS) would be cut so as to reduce lending for these programs by $1 billion, with the biggest hit to guaranteed loans provided under the electricity program. Under the Rural Business Cooperative Service, the budget proposes an increase of $500 million in loan levels for the business and industry guaranteed loan and distressed community loan programs, but would zero out a number of smaller loan programs, such as those targeting healthy food financing and rural micro-entrepreneur assistance.
With respect to nutrition programs, the budget proposes to reduce funding for the WIC program for mothers and infants by 9 percent from $6 billion to $5.4 billion compared to FY20 enacted spending, although they maintain that funding would be sufficient for anticipated participation in the program in FY21. The budget also proposes to eliminate funding for the Commodity Supplemental Food Program and the Farmers’ Market Nutrition Program.
Discretionary funding for the Agricultural Marketing Service (AMS) would be reduced by nearly 20 percent, with the biggest cuts coming for the pesticide data and national organic programs and market news activities.
Overall, agricultural research funding at USDA’s four agricultural research agencies would be reduced by 3.2 percent compared to FY20 levels. This funding level includes an 11 percent increase for the National Institute for Food and Agriculture (NIFA), a 2 percent cut for the National Agricultural Statistics Service (NASS), a 12 percent cut for the Agricultural Research Service (ARS), and a 27 percent cut to the Economic Research Service (ERS). Two of these agencies, NIFA and ERS, were moved to Kansas City, MO in September of 2019, causing the loss of about two-thirds of their staff in the process.
The FY21 budget also proposes to eliminate funding for two international food aid programs included in the agricultural appropriations account, the Title II “Food for Peace” program and the McGovern-Dole international school feeding program. Activities under these programs are proposed to be folded into a larger International Humanitarian Assistance account operated by the U.S. Agency for International Development (USAID), with overall funding cut by about one-third. This is the fourth straight year such a proposal has appeared in the President’s budget.
The budget also proposes even larger cuts to mandatory programs established under Farm Bills, similar to past Trump administration budget documents. For the Supplemental Nutrition Assistance Program (SNAP), it would cut funding by more than $213 billion over the next decade, representing a 30 percent cut over that period. These changes would include reviving the idea of a “Harvest Box”, which would force beneficiary households to accept a pre-selected box of staple foods delivered on a regular basis in lieu of being able to make their own food purchasing decisions with EBT cards. In addition, it would implement eligibility restrictions that would eliminate benefits for more than 4 million people and reduce benefits for many more.
Funding for programs in the farm safety net would also be reduced, by imposing tighter payment limitations on farmers with more than $500,000 in adjusted gross income (AGI) for both commodity support and crop insurance programs, and reducing premium subsidies under the federal crop insurance program. It would also eliminate the economic adjustment assistance program for upland cotton producers, the livestock forage emergency assistance program, and allow only one farm managers to qualify as “actively engaged” for each farm operation. Cuts to these programs would total more than $33 billion over ten years.
In addition, the President’s budget proposes to eliminate the Conservation Stewardship Program (CSP), limit enrollment of whole fields under the Conservation Reserve Program (CRP), and limit CRP payments to not more than 80 percent of county rental rates as estimated by NASS. Total savings from these programs would be more than $9 billion over ten years.
In his keynote address at USDA’s Agricultural Outlook Forum on February 20th, Secretary Perdue introduced the “Innovation Imperative” agenda that USDA intends to pursue over the next few decades. The goals of this agenda include increasing U.S. agricultural production by 40 percent and reducing the U.S. agricultural sector’s environmental footprint by 50 percent by the year 2050. It is difficult to reconcile those ambitious objectives with some of the spending levels included in this proposed budget, such as cutting USDA agricultural research spending by 3 percent and eliminating one of two major working lands conservation programs, the Conservation Stewardship Program, which provides cost-share assistance to farmers adopting new conservation practices such as cover cropping and no-till.
