WASHINGTON, Feb. 13- The heads of the House and Senate Agriculture Committees chided President Obama's decision to include crop insurance reductions in his FY 2013 budget plan for USDA, which also eliminates direct farm payments to help cut costs in the entire $3.8 trillion budget proposal.
"The President's budget demonstrates that neither rural America nor fiscal discipline is a priority for this administration,” said House Agriculture Committee Chairman Frank Lucas (R-Okla.). Lucas also criticized the proposal for ignoring other budget-saving options, such as “streamlining or eliminating duplicative programs in conservation, or closing loopholes in nutrition spending.”
The plan suggests $32 billion in savings over the next decade in mandatory program spending on commodity programs, crop insurance subsidies and conservation programs. It allocates $23 billion in discretionary spending for USDA in 2013, down nearly 3 percent or almost $700 million from the amount appropriated for the current fiscal year.
Under Obama’s plan, savings in the crop insurance program would come by reducing reimbursement to private companies to save $1.2 billion over 10 years and adjusting the cap on administrative expenses to save $2.9 billion over 10 years. In addition, the administration is proposing to reduce the premium subsidy by 2 basis points for all but catastrophic coverage, saving $3.3 billion over 10 years.
“I am encouraged the President agrees that direct payments are an indefensible program of the past, but do not agree with further cuts to crop insurance, which is a critical risk management tool,” said Chairwoman of the U.S. Senate Committee on Agriculture Debbie Stabenow (D-Mich.).
She added that the President’s budget “reinforces the need for Congress to pass a strong, fiscally responsible Farm Bill immediately this year.”
Ranking Member of the Senate Committee on Agriculture Pat Roberts (R-Kans.) dismissed the Obama Administration for ignoring feedback from producers and a majority of senators on the Agriculture Committee, which maintains that crop insurance is the most effective safety net for agriculture.
“Rather than listen to those in farm country, the Obama Administration has chosen to recycle old suggestions and raid Agriculture to pay for excessive spending elsewhere,” Roberts said.
National Council of Farmer Cooperatives (NCFC) applauded the Administration’s decision to help promote U.S. agricultural exports by fully funding the U.S. Department of Agriculture’s Market Access Program (MAP) and Foreign Market Development (FMD) program.
“Exports are absolutely essential to ensuring the continued strength of American agriculture and to boosting the economy in communities across the country,” said President and CEO of NCFC Chuck Conner. “Programs like MAP help to accomplish these goals while providing the American taxpayers with a tremendous return on investment.”
Both MAP and FMD are administered on a cost-share basis, and are among the few export tools not specifically capped under World Trade Organization rules.
Senator Kent Conrad (D-N.D.) praised the proposal for extending disaster programs through 2017 and providing $5 million to extend Conrad’s “Open Fields" program, which provides incentives to farmers and ranchers who voluntarily open their land to hunting, fishing and other wildlife-related activities.
“People need to remember that when the President was elected he inherited a fiscal and economic disaster. His policies have played a critical role in bringing us back from the brink and putting the nation on the road to recovery," Conrad said. “And the President's budget continues that investment in our nation's economic recovery."
Although the proposal includes several reductions to the USDA budget, it increases the 2012 funding level for the Agriculture and Food Research Initiative to $325 million, which is a $60 million increase from the 2012 level.
"The strong backing for federally funded research shows the importance of growing the workforce when it comes to agronomists, crop and soil scientists; as well as attracting and educating the next generations of scientists,” said American Society of Agronomy, Soil Science Society of America, and Crop Science Society of America Chief Executive Officer Ellen Bergfeld. “These scientists will help feed the world's burgeoning population in a sustainable manner while ensuring that the U.S. remains competitive globally,
NFU President Roger Johnson believes the plan asks too much of agriculture, but approves of the more than $6 billion reserved for renewable energy.
“Agriculture has and continues to do more than its fair share toward reducing the federal deficit,” he said. “Efforts to cut even more by slashing support for family farmers should be directed elsewhere. While we were not pleased with the decrease in funding levels, we were pleased with the renewable energy initiatives and the drive to increase America’s energy independence.”
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