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Published April 29, 2013, 10:15 AM

Farm Bureau: direct payment cuts are unfair

The U.S. Department of Agriculture plans to cut $156 million out of this year's direct payment allotment.

By: Jerry Hagstrom, Agweek

WASHINGTON — The American Farm Bureau Federation told Agriculture Secretary Tom Vilsack last week that the U.S. Department of Agriculture’s plan to cut direct payments to offset the sequestration cuts for other farm programs is unfair, but USDA has defended the plan.

USDA has announced that it will cut direct payments to be made in October by 8.5 percent or $156 million to offset the sequestration costs of the following programs: Supplemental Revenue Assistance Payments Program (SURE), Tobacco Transition Payment Program, Marketing Assistance Commodity Loans Program, Crop Cash Loan Deficiency Payments Program, storage and handling programs, Noninsured Crop Disaster Assistance Program (NAP), and the Milk Income Loss Contract Program.

Vilsack has said USDA is taking this action because 90 percent of the 350,000 producers who received money under the seven programs also get direct payments, and that reducing the direct payments avoids the costly administrative challenge of seeking remuneration for payments already made.

In a recent letter to Vilsack, Farm Bureau President Bob Stallman said Farm Bureau does not object to a 5.1 percent cut, which has also been applied to other programs, but thinks cutting the direct payments another 3.4 percent to cover the costs of payments to farmers who do not get the direct payments is “simply not fair.”

Stallman applauded Vilsack for trying to avoid administrative costs and did not offer an alternative to complying with the Budget Act and saving administrative costs. But he added that he is concerned about how USDA will handle a sequestration for the Conservation Stewardship Program and that Farm Bureau will “adamantly oppose those repayments being made from the direct payment program or any other conservation program.”

A USDA spokesperson said the agency has not yet responded to the letter, but the department is “committed to carrying out these cuts in a manner that provides the least disruption to our customers.

“Using limited authority available in FSA programs, USDA will reduce direct payments in order to avoid requiring about 350,000 producers to refund a portion of the payments they have already received through other programs,” the spokesman said.

“This action will also save American taxpayers significant administrative costs that would be required to recoup these payments. While USDA’s efforts will minimize disruption to the extent possible, we cannot mitigate the negative effects that cuts of this magnitude will have on our mission. We continue to urge Congress to replace sequestration with balanced deficit reduction.”