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Published July 20, 2010, 07:49 AM

USDA asks for budget flexibility

WASHINGTON — Although President Obama has asked all Cabinet secretaries to cut 5 percent of their discretionary, Agriculture Secretary Tom Vilsack has asked the White House to allow USDA “flexibility” so that USDA could cut mandatory farm programs in the fiscal year 2012 budget rather than make the entire cut in discretionary programs, Deputy Agriculture Secretary Kathleen Merrigan said July 13.

By: Jerry Hagstrom, Special to Agweek

WASHINGTON — Although President Obama has asked all Cabinet secretaries to cut 5 percent of their discretionary, Agriculture Secretary Tom Vilsack has asked the White House to allow USDA “flexibility” so that USDA could cut mandatory farm programs in the fiscal year 2012 budget rather than make the entire cut in discretionary programs, Deputy Agriculture Secretary Kathleen Merrigan said July 13.

In a speech to the American Soybean Association board, Merrigan, who manages the USDA budget process, noted that USDA is expected to spend $149 billion in fiscal year 2011 and that only $26 billion of that is discretionary spending, but that Office of Management and Budget expects the agency to propose a cut of $1.5 billion.

“USDA is going to have to look ourselves in the mirror and make tough choices,” Merrigan said. She added that “There are going to be tough times ahead.”

Making cuts at USDA are especially difficult, Merrigan said, because 70 percent of the USDA budget goes for nutrition programs including food stamps, school meals and the special nutrition program for low income women, infants and children known as WIC. Merrigan noted that WIC, which costs more than $7 billion, is part of the discretionary section of the budget, but it is treated like a mandatory program that no one wants to cut.

She also noted that no one wants to cut the Food Safety and Inspection Service, which costs more than $1 billion per year. If the cut comes totally out of discretionary spending, that would leave rural development, research, marketing and regulatory programs and some conservation programs to absorb all the cuts.

No ‘clear pathway’

Merrigan later said that Vilsack had sent the White House Office of Management and Budget a letter requesting “flexibility” in the budget cut. Merrigan declined to discuss whether USDA intends to propose cuts in farm subsidies, but she acknowledged that the Obama administration has proposed cuts in the direct payments program and also proposed limiting payments to the biggest farms. Obama also made a campaign promise to impose stricter payment limits.

Vilsack announced July 13 that crop insurance companies agreed to accept a contract that cuts their subsidies by $6 billion in 10 years, but Merrigan declined to discuss what impact that cut might have on the budget process.

“There’s not a clear pathway,” Merrigan said, adding that she has yet to receive budget ideas from the undersecretaries in the department.

In her speech, Merrigan emphasized that USDA wants to be a voice for agriculture, particularly when Obama administration officials think impressions of rural America are incorrect. Merrigan noted that the administration has started several programs to help reduce pollution from agriculture in the Chesapeake Bay watershed, but she said when she announced those projects, she pointed out that the biggest increases in pollution in the bay now come from urban sources.

Merrigan is known as an advocate for organic agriculture, but she declared herself a longtime believer in biotechnology and urged the soybean growers to support USDA’s proposals to help developing countries establish regulatory agencies that can evaluate biotech crops.

“Technology has outpaced bureaucracy,” she said, adding that if the developing countries establish those regulatory regimes, “we increase the likelihood that the United States will be the supplier.”

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