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Published February 22, 2011, 09:08 AM

Ag spending targeted for cuts

WASHINGTON — In a confusing but important development for agriculture, House Republicans and President Obama each have made a budget proposal that would cut some key farm programs — but at different times.

By: Jerry Hagstrom, Special to Agweek

WASHINGTON — In a confusing but important development for agriculture, House Republicans and President Obama each have made a budget proposal that would cut some key farm programs — but at different times.

Republicans made a proposal Feb. 11 to reduce government spending from March 4 through Sept. 30, the end of the 2011 fiscal year. Obama made a proposal Feb. 14 for the government budget for the 2012 fiscal year that begins Oct. 1. Neither proposal is expected to become law as written because the Republican-controlled House, the Democratic-controlled Senate and President Obama, also a Democrat, will have to reach agreement on both.

The Republican proposal would cut USDA spending by $5.2 billion this year, but would not affect crop subsidies. Obama proposed the same cuts to the direct payments program and tighter caps on payments that he proposed last year, but he also proposed cuts in conservation, research and rural development programs. If enacted, USDA spending on discretionary programs for fiscal year 2012 would be $23.9 billion, about $3.2 billion less than in fiscal year 2010.

In a Feb. 14 call to reporters, Agriculture Secretary Tom Vilsack noted the administration did not propose cutting the market access program as it did last year, and the budget includes an additional $20 million for export promotion, a sign the administration is serious about President Obama’s commitment to doubling exports in five years. Vilsack told reporters that it was “a very challenging and difficult budget that we presented today.” In a statement, he said, “In this budget, we are cutting programs not because we want to, but because we have to.

Both the National Sustainable Agriculture Coalition and the Environmental Working Group praised Obama for trying to put limits on farm subsidies but criticized the administration for making cuts in conservation programs. But Senate Agriculture Committee ranking member Pat Roberts, R-Kan., declared the Obama proposal dead on arrival on Capitol Hill, saying, “The administration has once again dusted off old proposals aimed at pitting farmers against farmers. Thankfully, Congress has consistently rejected these efforts in the past. I appreciate the administration’s perspective, but Congress will take over from here on setting our national budget priorities.”

Lobbyists were more critical of the Republican proposal to cut $5.2 billion out of this year’s agricultural spending, saying it would cut American food aid for close to 18 million hungry people in poor countries and cause farmers to lose benefits guaranteed to them under the 2008 farm bill.

Spending bill deadline

House Republicans made their proposal because Congress did not pass appropriations bills last year. The federal government is operating under a continuing resolution in effect until March 4, and Congress needs to pass a new spending bill by that date.

Responding to the political sentiment that led to the rise of the Tea Party movement and the shift of control of the House of Representatives from Democratic to Republican, the House Appropriations Committee released a proposal for financing the federal government through the end of the fiscal year that includes a $60 billion cut in government spending.

Of that $60 billion cut, $5.2 billion would come from the agriculture function and there would be additional cuts to food aid in the State Department and U.S. Agency for International Development budgets.

“This year, our nation is spending $1.5 trillion more than we have, running our debt to $14 trillion. The taxpayers have told us loud and clear that this is simply unacceptable, and have demanded that we get our nation’s fiscal house in order,” House Appropriations Committee Chairman Hal Rogers, R-Ky., said in a statement when he released the budget. “My committee has taken a thoughtful look at each and every one of the programs we intend to cut, and have made determinations based on this careful analysis.”

Senate Democrats, who control that chamber, already have described the House Republicans’ proposal as unrealistic. Senate Appropriations Committee Chairman Daniel Inouye, D-Hawaii, said in a news release, “It is clear from this proposal that House Republicans are committed to pursuing an ineffective approach to deficit reduction that attempts to balance the budget on the back of domestic discretionary investments, which constitute only a small percentage of overall federal spending. The priorities identified in this proposal for some of the largest cuts — environmental protection, health care, energy, science, and law enforcement — are essential to the current and future well-being of our economy and communities across the country.”

Asked about the Republican proposal, Vilsack said the fiscal year 2011 budget cutting effort “should not compromise our ability to invest in growth opportunities” and listed biofuels, conservation and ecosystem markets as examples of programs that should not be cut.

But the Agriculture secretary also went out of his way not to antagonize House Republicans. “We will work with our friends in Congress to find out where that proper balance is,” he said.

The House Republican spending proposal is unlikely to become law as written as the Democratic-controlled Senate and President Obama will have to agree to the final bill, but it has laid out the beginning of the House negotiating position. The House is expected to act on the proposal soon, but the Senate may move so slowly that there may be another continuing resolution before Congress passes a final bill to fund the government through Sept. 30.

Food aid reductions

Ellen Levinson, executive director of the Alliance for Global Food Security, a coalition of humanitarian and industry groups that deliver food aid, said the Republican proposal would cut U.S. international food assistance to its lowest levels in a decade, dropping the food aid budget 42 percent or $800 million from its fiscal year 2010 level.

“Cutting food aid is particularly devastating now, because food prices have soared to their highest levels in decades and low-income, food-deficit countries are struggling with growing hunger and unrest,” Levinson said.

U.S. food aid now reaches 50 million people per year, she said. The House proposal would cut 15 million people from the Food for Peace Program, which targets communities where there is persistent hunger and 30 percent or more children are undernourished, and cut 2.5 million children from the McGovern-Dole Food for Education Program, Levinson said.

“Reductions in Food for Peace will also severely limit the ability of the United States to provide assistance in response to conflicts, drought and other disasters, when hunger sets in quickly and people’s lives are endangered,” she added.

The United States has traditionally been the world’s biggest donor of food aid, and Levinson’s alliance Feb. 13 called on Congress “to restore funding to the Food for Peace and McGovern-Dole Food for Education Programs to assure that the United States continues its leadership role in the fight against global hunger.”

U.S. farm groups and shipping companies have formed a coalition with humanitarian groups to include food aid in the farm bill and other legislation. The impact of an $800 million reduction in government food aid purchases on the commodity markets is unknown.

Cuts to programs

Meanwhile, Ferd Hoefner, the Washington lobbyist for the National Sustainable Agriculture Coalition, said in a blog post for his members Feb. 12 that the cut proposed in agriculture would be “enormous.” Hoefner noted that, while the budget resolution focuses mostly on discretionary spending, it includes more than $500 million in cuts to the Environmental Quality Incentives Program, the Conservation Stewardship Program, the Wetlands Reserve Program, and the Biomass Crop Assistance Program.

“NSAC strongly opposes the cuts to farm bill mandatory conservation and renewable energy programs,” Hoefner wrote. “If Congress decides that deficit reduction requires farm bill spending to be on the table, then we strongly believe ALL farm bill spending should be on the table and that cuts should be fair and equitable and based on the merits. Singling out the 10 percent of farm bill spending represented by conservation and renewable energy spending to take all the cuts is grossly unfair. In our view, either everything is on the table, or nothing is on the table.

“We also believe the appropriations bill is not the appropriate venue for making farm bill cuts,” he added. “Such adjustments to the farm bill should be made by the Agriculture committees and only in the context of a broad agreement to find savings in mandatory programs on a government-wide basis.”

Hoefner said the bill would eliminate — “zero out,” in budget jargon — many sustainable agriculture programs, including the National Sustainable Agriculture Information Service, Organic Transitions research program, the USDA Office of Advocacy and Outreach (for minority and beginning farmers), the USDA Office of Tribal Relations, Farm Service Agency conservation loans, the Resource Conservation and Development program, the regional integrated pest management centers, the regional Rural Development Centers, the National Integrated Food Safety Initiative, and the Hunger Free Communities program.

“NSAC intends to work with members of Congress to pursue amendments on the floor . . . to restore funding to many of these important functions,” Hoefner wrote. “It is unacceptable in our view to focus terminations on very modest programs for sustainable and organic agriculture, beginning and minority farmers, and initiatives to reduce pesticides and pathogens in food production. Funding cuts should be based on careful evaluation of the need for and effectiveness of programs, not simply aimed to chop out small programs that only just barely begin to level the playing field for chronically underserved parts of agriculture.”

Contract issues?

Hoefner also noted the bill’s provision to limit the Conservation Stewardship Program by $39 million would force the government to break the terms of the five-year contracts already signed with farmers in 2009 and 2010 by delaying contract payments.

“Reneging on contracts already in effect would truly represent government at its very worst,” Hoefner said. He also noted that the proposal to cut the Wetlands Reserve Program by 19 percent or nearly 48,000 acres would be a permanent reduction in the acreage level for the WRP established in the 2008 farm bill.

USDA’s National Institute for Food and Agriculture — formerly the Cooperative State Research, Education, and Extension Service — also would take a big hit under the bill, Hoefner said.

“Formula funds” to land-grant colleges and institutions would go up by $25 million relative to fiscal year 2010, but competitive grant programs would be funded at their 2010 levels rather than at the significant increased levels called for in President Obama’s budget request. The agency’s administrative funds would also be cut, USDA’s Agricultural Research Service would be cut by 10 percent.

One of the biggest agriculture cuts in the Republican proposal is a $747 million reduction in the special nutrition program for women, infants and children known as WIC. The exact impact of that cut is unclear because the birth rate is down, but Craig Cox of the Environmental Working Group said, “It is unconscionable to propose cutting a program that puts food in hungry children’s mouths while continuing to send billions to farmers and landlords that are headed for a record profitable year.”