House Ag Committee outlines budget priorities
Last week, the House Agriculture Committee sent a letter to House Budget Committee Chairman Paul Ryan (R-Wis.) outlining the committee’s budget recommendations for the agencies and programs under its jurisdiction for fiscal year 2013.
Ag Committee Chairman Frank Lucas (R-Okla.) and Ranking Member Collin Peterson (D-Minn.) signed the bipartisan document, which acknowledges the need for deficit reduction while warning of excessive cuts to vital farm programs.
The committee notes that its primary focus this year will be on reauthorizing the Farm Bill, which expires on September 30, 2012. Last fall, the committee proposed $23 billion in savings from programs under its jurisdiction, including $15 billion in cuts from commodity programs, $6 billion from conservation programs and $4 billion from nutrition programs. “Expiring unfunded livestock disaster programs would have been extended but fully paid for in recognition of the extreme drought conditions facing many livestock producers around the country,” the authors wrote.
Some key points from the letter include:
- Crop insurance has become a cornerstone of risk management in agriculture for a great many producers.
- One area of consensus that seems to be forming is to simplify and improve conservation programs. The committee wants to streamline programs designed to help producers avoid regulation or come into compliance.
- Because the Joint Select Committee on Deficit Reduction was unable to achieve targeted spending reductions, mandatory programs within the committee’s jurisdiction will be subject to sequestration beginning in January, 2013. The committee expects these programs will be sequestered between $10 billion and $15 billion.
- The Supplemental Nutrition Assistance Program (SNAP), formerly known as Food Stamps, is the largest program under the committee’s jurisdiction and is exempt from sequestration. In 2001 there were 17.3 million recipients. That figure rose to 23.8 million by 2004, 28.2 million in 2008 and 44.7 million today, costing $700 billion.
- In contrast to many other mandatory funding policies, spending on farm policy has declined significantly.
- Another way to reduce the deficit is to grow the economy. The authors note that regulatory overreach may adversely affect production agriculture and communities and businesses they support.
- A view that the strong agricultural economy justifies cutting agricultural programs even further ignores lessons from history. The ag economy is highly cyclical, and having sound farm policy in place is vital not just for producers but for the entire national economy.
- During some of the worst economic times, agriculture has served as a catalyst for economic growth. Last year, U.S. farmers and ranchers produced $410 billion on goods and spent $227 billion to purchase inputs. They made $65 billion in rent payments, paid $24 billion in wages and spent $15 billion on interest and financing.
- Based on goods purchased alone, U.S. agriculture would be the world’s 25th largest economy if it were a country. And yet, the farm safety net now constitutes less than one quarter of one percent of the federal budget.