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Published April 15, 2013, 09:55 AM

Obama presses Congress on farm bill

President Obama's 2014 fiscal year budget does not include a plan to pay Brazil $147 million.

By: Jerry Hagstrom, Agweek

WASHINGTON — In an effort to force Congress to pass a farm bill this year, President Barack Obama’s fiscal year 2014 budget does not include a provision to make a payment to Brazil to avoid the retaliatory tariffs that Brazil has the right to impose because it won a case over U.S. cotton subsidies in the World Trade Organization.

The U.S. has been paying Brazil $147 million per year. USDA has been making the payments through the Commodity Credit Corp. The Obama administration negotiated the arrangement in 2010 to avoid retaliation, but it was completed on the assumption that a new farm bill would resolve the issue of U.S. cotton subsidies in 2012. Congress did not pass a bill last year and instead extended the 2008 farm bill through Sept. 30.

USDA Secretary Tom Vilsack said on April 10 that the budget assumes that a new “food, farm and jobs bill” will be passed by Sept. 30, the end of fiscal year 2013.

“We are very committed to a strong food, farm and jobs bill. It has to happen this year,” he said.

The farm bill proposals that the administration is making, such as cuts to crop insurance, are similar to those in previous budgets, Vilsack said. He noted that the rate of return for crop insurance companies has been 14 percent, but that a USDA-commissioned study said a rate of return of 12 percent is high enough for the companies to prosper and stay in business.

In other comments on the budget, Vilsack said that the administration is asking Congress to restore a cut to food stamp benefits that is scheduled to go into effect on Oct. 31.

The budget documents noted that “The Recovery Act increased the maximum allotment by 13.6 percent, effective April 2009, a level to remain constant until the statutory Supplemental Nutritional Assistance Program thrifty food plan increased benefits above that amount. The expiration of this special increase was later changed to Oct. 31.

Beginning Nov. 1, the department anticipates that a four-person household will see their monthly SNAP benefit decline by $37 and remain relatively constant through the end of fiscal year 2014. The budget re-proposes to extend the Recovery Act SNAP benefits through March 31, providing help to participating households for several additional months.”

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