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‘Alternative sequestration’ proposal would end direct payments

‘Alternative sequestration’ proposal would end direct payments

Attempting to keep automatic spending cuts from taking effect on March 1, Senate Democrats, with White House backing, have proposed an alternative to the sequester.  The “alternative sequester” would mean an end to direct payments, which were part of the 2008 farm bill extension passed in early January.  Payments likely safe for 2013.    

Attempting to keep automatic spending cuts from taking effect on March 1, Senate Democrats, with White House backing, have proposed an alternative to the sequester.

Without congressional action, in coming weeks federal agencies will be forced to implement $85 billion across-the-board cuts as part of $1.2 trillion in cuts mandated over the next 10 years.

In key ways the Democrat’s proposal hews closely to the farm bill passed by the Senate last summer. The “alternative sequester” would mean an end to direct payments, which were part of the 2008 farm bill extension passed in early January.

Ending direct payments would provide some $31 billion. Democrats would use $3.5 billion for disaster assistance and to fund programs left out of the aforementioned farm bill extension. The $27 billion-plus left would go to deficit reduction.

“In agriculture, we’re being very serious about evaluating government spending and setting priorities for taxpayers as well as farmers and ranchers,” said Michigan  Sen. Debbie Stabenow, chairwoman of the Senate Agriculture Committee, during a Thursday (Feb. 14) afternoon press conference. “In the process of writing the farm bill (in 2012) and evaluating what made sense to spend taxpayer dollars on, we agreed on a bipartisan basis that direct payments didn’t make sense, that we shouldn’t be providing a subsidy to farmers during good times of high prices or when they didn’t have a loss.

“We moved to a risk-based, market-based system that saved money but also makes a lot more sense.”

Having just returned from a series of meetings with lawmakers on Capitol Hill, Randy Veach, Arkansas Farm Bureau president, said farmers should continue with plans to begin signing up for farm programs on Feb. 19. In explaining the alternative proposal, “Sen. Reid said he’d take away direct payments for the 2014 through the 2023 farm bill. Obviously absent in that is he didn’t attack the direct payments in the 2013 (farm bill) extension. That gives us a little more certainty that we will get those direct payments (this year).”  

A vote on the proposal is expected the week after Congress returns from the President’s Day break.

Reaction to the plan from farm and rural interest groups was quick and mixed.

“We applaud (Senate Leader Harry Reid) for proposing to fix the fiscally irresponsible and unfair farm bill extension that was slapped together behind closed doors at the end of 2012,” said Ferd Hoefner, National Sustainable Agriculture Coalition Policy Director. “The package outlined today is a first step toward restoring both a sane fiscal policy and a fair farm bill extension. With that in mind, the sustainable agriculture community calls on House, Senate, and White House leaders to work immediately toward a deal that averts or substantially modifies the sequester and corrects the farm bill extension so that it actually extends the full farm bill while beginning the long overdue job of reforming subsidies.”

Meanwhile, Andrew Grobmyer, executive vice president of the Agriculture Council of Arkansas, was clearly displeased with the proposal. “The Agricultural Council of Arkansas strongly opposes the Stabenow proposal to eliminate direct payments as part of a ‘sequestration alternative.’  Eliminating this important program for farmers without a viable safety net alternative for this region is irresponsible and damaging to Arkansas agriculture. We would hope that Congress would be wise enough to not eliminate these important programs without providing alternative risk management tools for producers in Arkansas. Chairman Stabenow’s plan as proposed will undoubtedly cause substantial harm to farmers, rural banks and agribusinesses, and rural economies in Arkansas.”

Negative assessments

Grobmyer’s negative assessment was shared by Oklahoma Rep. Frank Lucas, chairman of the House Agriculture Committee. "Farmers and ranchers want to be a part of the solution to the fiscal crisis we face in this country. And, the House Agriculture Committee demonstrated that commitment to being a part of the solution when we passed a comprehensive, balanced farm bill that cut more than $35 billion from all of agricultural spending, including the farm safety net, conservation programs, and reforming the SNAP program.”

Lucas continued, "We made those reforms in the context of a comprehensive, five-year farm bill that ensured we still met the food and fiber needs of all Americans. The Senate’s approach of taking away our investment in rural America without addressing the hole it will create is not balanced and not acceptable.”

If the sequester goes through, it will mean some $46 billion in cuts to defense spending. With that in mind, Mississippi Sen. Thad Cochran, ranking member on the Senate Agriculture Committee, is, “disappointed that the Senate Democratic sequester package falls squarely on the backs of our defense and agriculture sectors. I understand that this is a political messaging bill, and I think it’s unfair and unfortunate that the entire federal government looks to agriculture and national defense to pay for its debt.”

Stabenow tried to shore up support for the proposal during her press conference. “In the process of looking at priorities in areas to reduce spending, it’s very clear that there’s bipartisan support for ending direct payments. In the context of sequestration – where we have very tough choices to make about possible meat inspections being eliminated, hundreds of thousands of jobs being eliminated for middle-class families and all the other things that could happen – it’s our judgment, and I support, moving forward by eliminating direct payments as a way to satisfy the cuts under sequestration, save dollars.”

At the same time, Stabenow and colleagues have, “negotiated a provision to make sure we’re providing disaster assistance for 2012/2013 for farmers and ranchers who really do need it. So, instead of having a direct payment given to folks who don’t need it we need to make sure we provide disaster assistance that do.”

The provision will also fund disaster assistance and “fill the holes in the extension that passed New Year’s Eve. … We’d extend the funding for the Energy Title and certain specialty crops, organics, and other things that didn’t get funded.”

Agriculture, said Stabenow, “will once again take the lead on deficit reduction and we’re offering a very specific cut by eliminating direct payments – and that would equal more than we’d be required to do under sequestration – that we’d satisfy the 10-year sequestration with this cut. We’d guarantee we’d not have another cut in mandatory spending next year, the year after or the year after.”

Farm program sign-up begins on Feb. 19. While direct payments are still available,I’m assuming that, as always, contracts are honored and people should proceed to make decisions based on current law,” said Stabenow. “When people sign contracts the USDA has indicated they’ll honor them.”

Stabenow warned of the consequences of allowing the sequester cuts to go through. “It would be devastating for the economy and families across the country because we’re looking at 750,000 jobs (being affected). … We’re looking at 2,100 fewer food inspections. About 10,000 would lose their jobs and 700,000 children would lose Head Start. The (Women Infant Children) program would see cuts that would eliminate the ability of pregnant moms and babies to have access to milk and healthy foods. It would have broad implications: border security, law enforcement, medical research, support for senior citizens.

“What’s so irresponsible about the sequester is the (cuts are) across the board, every program. It isn’t a judgment about what works and what doesn’t. When we wrote the farm bill, we went through every page and actually eliminated 100 different programs or authorizations or consolidated them so they’d work better – cut the paperwork and stop the things that don’t work.

“That’s what we should be doing. This should be done in a thoughtful way.” 

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