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Obama budget cuts farm programs

Agriculture advocacy groups have reacted with a flurry of unhappy responses to President Obama’s Feb. 1 release of his proposed 2011 budget.

The proposed budget “reflects the serious challenges facing the country,” said Obama the day of its release. “We’re at war. Our economy has lost 7 million jobs over the last two years. And our government is deeply in debt after what can only be described as a decade of profligacy.” Read Obama’s full statement on page 2

Obama’s attempt to control government spending (pegged at over $1.5 trillion for this year) would mean payment cuts not only to large farmers (more than $2 billion over a decade) and agriculture-related insurance (some $8 billion over a decade) — but also, to the consternation of some environmental groups, would reduce the growth of conservation programs.

For the full budget proposal, see USDA 2011 Budget.

Crop insurance has been on the Obama administration’s radar for months. The latest budget comes after the December release of a proposal for a new Federal Crop Insurance Program. According to the budget proposal “crop-insurance companies currently benefit from huge windfall profits due to the structure and terms of the government’s contract with the companies, called the Standard Reinsurance Agreement.”

In the budget proposal, the USDA would receive $26 billion. Of that total, over $8 billion would be targeted for nutrition programs and more than $400 million would go to building broadband networks in rural areas.

Two other proposals sure to draw growers’ ire:

• Cotton and/or grain farmers, despite market prices, would collect $30,000 or less annually in direct-payment subsidies. That would mean a potential drop of $10,000.

• Current farm payment eligibility caps of $750,000 (for farm income) and $500,000 (for non-farm income) would drop to $500,000 and $250,000, respectively.

Such actions, according to the budget proposal, “would allow USDA to target payments to those who need and can benefit from them most, while at the same time preserving the safety net that protects farmers against low prices and natural disasters.”

Like the advocacy groups, prominent farm-state lawmakers — many facing re-election fights in 2010 — were unswayed by the Obama administration’s effort and arguments.

“Put simply the president’s proposal picks winners and losers,” said Arkansas Sen. Blanche Lincoln, chairman of the Senate Agriculture Committee. “By targeting policies that rural America relies upon, this proposal places a disproportionate burden on the backs of farmers and rural communities. While I too believe we must reduce the federal deficit, we must all share in this responsibility.”

The latest farm bill “contained over $4 billion worth of cuts to farm programs, was completely paid for and did not contribute to the deficit. … Changing the rules in the middle of the game would be detrimental to their operations and would cost us even more jobs in rural America.”

Obama’s 2010 budget called for similar cuts in agriculture, which were derailed by Congress. Lincoln was ready to remind him of that. ”I thank the president for his recommendations,” she said, “but Congress writes the budget. I intend to support measures to reduce the deficit but fight many of the president’s proposed cuts that will harm farmers, ranchers and rural communities.”

Tom Vilsack, USDA secretary, defending Obama’s budget, said problems in the United States’ rural areas “have grown more acute, which is why the Obama administration is committed to new approaches to strengthen rural America.” Read Vilsack’s full statement on page 3.

As a reflection of needed financial constraint, Vilsack said, the proposed budget “essentially (freezes) funding for discretionary programs at the FY 2010 level. However, limits we placed on select programs and efforts to eliminate earmarks and one-time funding actually result in a bottom line reduction to our discretionary budget authority of over $1 billion.”

Further, “we care deeply about farmers and ranchers and have worked hard to maintain the agricultural safety net, while instituting some targeted reductions in farm program payments.”

Walking a tightrope between his state’s farmers and his party’s recent mantra of controlled spending, Georgia Sen. Saxby Chambliss, ranking Republican on the Senate Agriculture Committee, commended Obama’s “effort to reign in government spending,” but said “we need to examine where resources are truly needed. As with last year, the (Obama) administration unfairly targets farmers and ranchers to achieve savings and fund Washington-based programs.

“I will continue to examine the budget along with my colleagues to ensure we are spending hard earned taxpayer dollars efficiently and effectively. In the weeks and months ahead, we will have to make some hard choices. It is my hope we can produce a budget that mirrors what Americans have to struggle with every day.”

The National Cotton Council (NCC) warned that cotton will be a loser under Obama’s proposal. If it is adopted, not only would farmers lose payments but storage and marketing issues would arise.

“The financing demands of commercial agriculture require a high level of confidence by lenders in program availability,” said Jay Hardwick, a Louisiana farmer and NCC chairman. “In the midst of a credit crisis, it makes no sense to threaten a vital component of the borrower’s cash flow.”

The NCC said further proposals to eliminate upland cotton storage credits and reduce funding for the Market Access Program fails to take the whole picture into account. Read the NCC’s full statement on page 5.

The American Soybean Association (ASA) “opposed similar proposals by the (Obama) administration last year that would have reopened the 2008 farm bill and undercut long-term economic decisions by soybean producers,” said Rob Joslin, Ohio soybean producer and ASA president.

“They were bad ideas then, and they are bad ideas now. Agriculture spending, not including nutrition programs, is projected to account for just over one-half of one percent of next year’s $3.8 trillion budget. Cutting the farm safety net to achieve minimal savings would jeopardize an industry that continues to be a key driver for U.S. economic recovery and export growth.” Read the full ASA statement on page 4.

Next page: President Obama’s Feb. 1 statement on his budget proposal

President Obama’s Feb. 1 statement on his budget proposal
“This morning, I sent a budget to Congress for the coming year. It’s a budget that reflects the serious challenges facing the country. We’re at war. Our economy has lost 7 million jobs over the last two years. And our government is deeply in debt after what can only be described as a decade of profligacy.
“The fact is, 10 years ago, we had a budget surplus of more than $200 billion, with projected surpluses stretching out toward the horizon. Yet over the course of the past 10 years, the previous administration and previous Congresses created an expensive new drug program, passed massive tax cuts for the wealthy, and funded two wars without paying for any of it -– all of which was compounded by recession and by rising health care costs. As a result, when I first walked through the door, the deficit stood at $1.3 trillion, with projected deficits of $8 trillion over the next decade.
“If we had taken office during ordinary times, we would have started bringing down these deficits immediately. But one year ago, our country was in crisis: We were losing nearly 700,000 jobs each month, the economy was in a free fall, and the financial system was near collapse. Many feared another Great Depression. So we initiated a rescue, and that rescue was not without significant cost; it added to the deficit as well.
“One year later, because of the steps we’ve taken, we’re in a very different place. But we can’t simply move beyond this crisis; we have to address the irresponsibility that led to it. And that includes the failure to rein in spending, as well as reliance on borrowing –- from Wall Street to Washington to Main Street –- to fuel our growth. That’s what we have to change. We have to do what families across America are doing: Save where we can so that we can afford what we need.
“Now, I think it’s very important to understand: We won’t be able to bring down this deficit overnight, given that the recovery is still taking hold and families across the country still need help. We will continue, for example, to do what it takes to create jobs. That’s reflected in my budget; it’s essential. The budget includes new tax cuts for people who invest in small businesses, tax credits for small businesses that hire new workers, investments that will create jobs repairing roads and bridges, and tax breaks for retrofitting homes to save energy.
“We also continue to lay a new foundation for lasting growth, which is essential as well. Just as it would be a terrible mistake to borrow against our children’s future to pay our way today, it would be equally wrong to neglect their future by failing to invest in areas that will determine our economic success in this new century.
“That’s why we build on the largest investment in clean energy in history, as well as increase investment in scientific research, so that we are fostering the industries and jobs of the future right here in America.
“That’s why I’ve proposed a more than 6 percent increase in funding for the Education Department. And this funding is tied to reforms that raise student achievement, inspire students to excel in math and science, and turn around failing schools which consign too many young people to a lesser future — because in the 21st century there is no better anti-poverty program than a world-class education.
“And that’s why we eliminate a wasteful subsidy to banks that lend to college students, and use that money to revitalize community colleges and make college more affordable. This will help us reach the goal I’ve set for America: By 2020 we will once again have the highest proportion of college graduates in the world.
“These are the investments we must make to create jobs and opportunity now and in the future. And in a departure from the way business had been done in Washington, we actually show how we pay for these investments while putting our country on a more fiscally sustainable path.
“I’ve proposed a freeze in government spending for three years. This won’t apply to the benefits folks get through Social Security, Medicaid, or Medicare. And it won’t apply to our national security –- including benefits for veterans. But it will apply to all other discretionary government programs. And we’re not simply photocopying last year’s budget; freezing spending does not mean we won’t cut what doesn’t work to pay for what does.
“We have gone through every department’s spending line by line, item by item, looking for inefficiency, duplication, and programs that have outlived their usefulness. That’s how we freeze discretionary spending. Last year, we found $17 billion in cuts. This year, we’ve already found $20 billion.
“Now, some of these cuts are just common sense. For example, we cut $115 million from a program that pays states to clean up mines that have already been cleaned up. We’re also cutting a Forest Service economic development program that strayed so far from any mission that it funded a music festival. And we’re saving $20 million by stopping the refurbishment of a Department of Energy science center that the Department of Energy does not want to refurbish.
“Other cuts, though, are more painful, because the goals of the underlying programs are worthy. We eliminate one program that provides grants to do environmental cleanup of abandoned buildings. That’s a mission I support, but there are other sources of private and public funds to achieve it. We also eliminated a $120 million program that allows folks to get their Earned Income Tax Credit in advance. I am a big supporter of the Earned Income Tax Credit. The problem is 80 percent of people who got this advance didn’t comply with one or more of the program’s requirements.
“So I’m willing to reduce waste in programs I care about, and I’m asking members of Congress to do the same. I’m asking Republicans and Democrats alike to take a fresh look at programs they’ve supported in the past to see what’s working and what’s not, and trim back accordingly.
“Like any business, we’re also looking for ways to get more bang for our buck, by promoting innovation and cutting red tape. For example, we consolidate 38 separate education programs into 11. And last fall, we launched the “SAVE Awards” to solicit ideas from federal employees about how make government more efficient and more effective. I’m proud to say that a number of these ideas — like allowing Social Security appointments to be made online — made it into our budget.
I also want to note even though the Department of Defense is exempt from the budget freeze, it’s not exempt from budget common sense. It’s not exempt from looking for savings. We save money by eliminating unnecessary defense programs that do nothing to keep us safe. One example is the $2.5 billion that we’re spending to build C-17 transport aircraft. Four years ago, the Defense Department decided to cease production because it had acquired the number requested — 180. Yet every year since, Congress had provided unrequested money for more C-17s that the Pentagon doesn’t want or need. It’s waste, pure and simple.
“And there are other steps we’re taking to rein in deficits. I’ve proposed a fee on big banks to pay back taxpayers for the bailout. We’re reforming the way contracts are awarded, to save taxpayers billions of dollars. And while we extend middle-class tax cuts in this budget, we will not continue costly tax cuts for oil companies, investment fund managers, and those making over $250,000 a year. We just can’t afford it.
“Finally, changing spending-as-usual depends on changing politics-as-usual. And that’s why I’ve proposed a bipartisan fiscal commission: a panel of Democrats and Republicans who would hammer out concrete deficit reduction proposals over the medium and long term, but would come up with those answers by a certain deadline. I should point out, by the way, that is an idea that had strong bipartisan support, was originally introduced by Senators Gregg on the Republican side and Conrad on the Democratic side; had a lot of Republican cosponsors to the idea. I hope that, despite the fact that it got voted down in the Senate, that both the Republican Leader Mitch McConnell and the Republican Leader in the House John Boehner go ahead and fully embrace what has been a bipartisan idea to get our arms around this budget.
“That’s also why we’re restoring pay-as-you-go: a simple rule that says Congress can’t spend a dime without cutting a dime elsewhere. This rule helped lead to the budget surpluses of the 1990s, and it’s one of the most important steps we can take to restore fiscal discipline in Washington.
You can read more about the budget at — very easy to remember — But the bottom line is this: We simply cannot continue to spend as if deficits don’t have consequences; as if waste doesn’t matter; as if the hard-earned tax dollars of the American people can be treated like Monopoly money; as if we can ignore this challenge for another generation. We can’t.

“In order to meet this challenge, I welcome any idea, from Democrats and Republicans. What I will not welcome -– what I reject -– is the same old grandstanding when the cameras are on, and the same irresponsible budget policies when the cameras are off. It’s time to hold Washington to the same standards families and businesses hold themselves. It’s time to save what we can, spend what we must, and live within our means once again.”

Next page: Statement from Tom Vilsack, USDA Secretary on the proposed 2011 budget

Previous page: President Obama’s Feb. 1 statement on his budget proposal

Statement from Tom Vilsack, USDA Secretary on the proposed 2011 budget

“I don’t need to tell the American people that in 2009, America struggled through the most serious economic recession since the Great Depression. Families were forced to make difficult decisions. And more and more Americans had to rely on USDA to help put food on the table.

“The challenges facing rural communities for decades have grown more acute, which is why the Obama Administration is committed to new approaches to strengthen rural America. Rural Americans earn less than their urban counterparts, and are more likely to live in poverty. More rural Americans are over the age of 65, they have completed fewer years of school, and more than half of America’s rural counties are losing population.

“This year, President Obama took steps to bring us back from the brink of a depression and grow the economy again. But with the unsustainable debt accumulated over the past decade, it’s time to get our fiscal house in order.

“Our proposed FY 2011 budget is a reflection of that reality, essentially freezing funding for discretionary programs at the FY 2010 level. However, limits we placed on select programs and efforts to eliminate earmarks and one-time funding actually result in a bottom line reduction to our discretionary budget authority of over $1 billion.

“This budget uses taxpayer dollars wisely, taking common-sense steps that many families and small businesses have been forced to take with their own budgets. We are investing in American agriculture and the American people without leaving them a mountain of debt.

“We care deeply about farmers and ranchers and have worked hard to maintain the agricultural safety net, while instituting some targeted reductions in farm program payments. Just as importantly, this budget pursues priorities that will have the greatest impact in our efforts to address the challenges facing rural America and lay a new foundation for growth and prosperity.

“This budget will assist rural communities create prosperity so they are self-sustaining, economically thriving, and growing in population. We have already taken important steps in this effort. With help from the Recovery Act, we supported farmers and ranchers and helped rural businesses create jobs. We made investments in broadband, renewable energy, hospitals, water and waste water systems, and other critical infrastructure that will serve as a lasting foundation to ensure the long-term economic health of families in rural America. This budget includes almost $26 billion to build on that down payment and focuses on new opportunities presented by producing renewable energy, developing local and regional food systems, capitalizing on environmental markets and generating green jobs through recreation and natural resource restoration, conservation, and management.

“We will promote the production of food, feed, fiber, and fuel, as well as increased exports of food and agricultural products, as we work to strengthen the agricultural economy for farmers and ranchers. America’s farmers and ranchers are the most productive and efficient in the world, and this budget maintains the policies that help maintain our nation’s food security. This budget increases our funding for export promotion as part of President Obama’s National Export Initiative and provides more support than ever before for competitive research, which can lead to gains in agricultural productivity.

“We will ensure that all of America’s children have access to safe, nutritious, and balanced meals. The budget fully funds the expected requirements for the Department’s three major nutrition assistance programs — WIC, the National School Lunch Program, and SNAP — and proposes $10 billion over 10 years to strengthen the Child Nutrition and WIC programs. It also invests over $1 billion for efforts to reduce food-borne illnesses from USDA-inspected food products.

“We will ensure our national forests and private working lands are conserved, restored, and made more resilient to climate change, while enhancing our water resources. This budget will enroll more than 300 million acres into Farm Bill conservation programs, an increase of 10% over 2010. It will support our efforts to strategically target high priority watersheds. And it focuses efforts on forest restoration and hazardous fuels reduction in the wildland-urban interface, where they will offer job-creation opportunities and reduce the chance of catastrophic wildfires.

“There is no doubt that these tough times call for shared sacrifice. The American people have tightened their belts and we have done so as well. We made tough decisions, but this budget reflects our values, and common sense solutions to the problems we face. It makes critical investments in the American people and in the agricultural economy to set us on a path to prosperity as we move forward in the 21st century.”

Next page: ASA opposes proposed cuts in farm programs, crop insurance, export promotion

Previous page: Statement from Tom Vilsack, USDA Secretary on the proposed 2011 budget

ASA opposes proposed cuts in farm programs, crop insurance, export promotion

The American Soybean Association (ASA) “expressed disappointment in the Obama administration’s proposals to cut funding for key farm programs, federal crop insurance, and the Market Access Program (MAP).

“‘ASA opposed similar proposals by the administration last year that would have reopened the 2008 farm bill and undercut long-term economic decisions by soybean producers,’ said ASA president Rob Joslin, a soybean producer from Sidney, Ohio. ‘They were bad ideas then, and they are bad ideas now. Agriculture spending, not including nutrition programs, is projected to account for just over one-half of one percent of next year’s $3.8 trillion budget. Cutting the farm safety net to achieve minimal savings would jeopardize an industry that continues to be a key driver for U.S. economic recovery and export growth.’

“Joslin’s comments followed release of the President’s Budget for FY-2011, which proposes to reduce the cap on Direct Payments to farmers by 25 percent, from $40,000 to $30,000. The President’s budget also proposes to reduce by $250,000 each, the Adjusted Gross Income limits that can be earned from farm and non-farm sources in order to be eligible for farm and conservation payments.

The (Obama) administration is also proposing changes in the federal crop insurance program that would reduce its cost by $8 billion over 10 years.

“‘Congress already considered these proposals during debate on the 2008 Farm Bill, and rejected them again last year,’ Joslin said. ‘While there may be need for reform in crop insurance administrative payments to companies, any savings should be reinvested to make the program more widely accepted in parts of the country where farmers don’t participate.’

“Another proposal would cut spending under MAP, which funds export promotion activities, by 20 percent, or $40 million per year. Noting the Administration’s proposed increase in funding for other export activities, including the Foreign Market Development (FMD) program, Joslin stated that ‘ASA would support increasing funding for FMD, but not at the expense of MAP.’

“ASA strongly endorses the proposed increase in funding for the Agriculture and Food Research Initiative (AFRI), from $262 million this year to $429 million in FY2011.

“‘Agriculture research was left out of last year’s economic stimulus package, while other research sectors received billions of federal dollars,’ Joslin said. ‘Research is the driving force behind innovation in American agriculture, and this proposed increased in AFRI funding is needed for long-term economic growth of the agricultural and food sectors of our economy.’

“ASA represents all U.S. soybean farmers on domestic and international issues of importance to the soybean industry. ASA’s advocacy efforts are made possible through the voluntary membership in ASA by over 22,500 farmers in 31 states where soybeans are grown.”

Next page: NCC: budget proposal undermines farm safety net

Previous page: ASA opposes proposed cuts in farm programs, crop insurance, export promotion

NCC: budget proposal undermines farm safety net

“The National Cotton Council said President Obama’s FY2011 USDA budget ignores the extensive changes to production agriculture support that were embodied in the Food, Conservation, and Energy Act of 2008. In addition, the NCC noted, USDA already has announced unwarranted restrictions in program eligibility during the legislation’s implementation.

“NCC Chairman Jay Hardwick, a Louisiana cotton producer, said, ‘The President’s proposal on phasing down direct payments and limiting total payments affects the farms that produce more than three-fourths of all agricultural products marketed in the United States. The safety net for America’s farm families must be maintained. Congress spoke clearly to ensure sound agricultural policy that is fiscally responsible in the passage of the last farm law. Direct payments are compliant with the direction being taken in the World Trade Organization to reduce trade distorting support. The financing demands of commercial agriculture require a high level confidence by lenders in program availability. In the midst of a credit crisis, it makes no sense to threaten a vital component of the borrower’s cash flow.’

“The 2008 farm law includes provisions for the Commodity Credit Corporation (CCC) to pay a portion of the storage costs during periods of low prices. These provisions’ costs were completely offset by changes in the upland cotton counter-cyclical target price.

“The NCC emphasized that the Administration’s proposal to eliminate the upland cotton storage credits is a failure to discern critical differences between commodities.

“‘Baled upland cotton lint is an identity-preserved commodity that requires off-farm storage in facilities approved by CCC while under loan,’ Hardwick said. ‘Further, loan eligible cotton must comply with a number of CCC regulations stipulating bale wrapping and packaging.’

The NCC also is truly puzzled by the proposed reduction in Market Access Program (MAP) funding.

“‘While the Department of Commerce is announcing new programs for export promotion and job creation, the administration proposes to cut support for agricultural export promotion,’ Hardwick stated. ‘Foreign sales account for one-third of U.S. agricultural production’s total value. Solid export performance is essential for the economic health of rural America and agricultural exports warrant aggressive support.’”

Next page: NFU statement on proposed FY2011 budget

Previous Page: NCC: budget proposal undermines farm safety net

NFU statement on proposed FY2011 budget

“National Farmers Union (NFU) President Roger Johnson made the following statement on the proposed fiscal year (FY) 2011 budget.

“‘NFU understands the nation is faced with a difficult financial situation and we commend the U.S. Department of Agriculture (USDA) for increases in important programs in its proposed budget. However, the cut in crop insurance at $8 billion over 10 years comes as a disappointment, as crop insurance is part of the vital safety net for farmers and ranchers providing a safe and secure food supply.

“‘NFU is supportive of USDA’s significant investment in rural development and the allocation of funds toward bringing broadband access to rural America.

“‘NFU is committed to working with Congress to find solutions to the growing hunger problem in America. USDA’s full funding of its food and nutrition programs is a step toward expanding access and improving quality of nutrition programs.

“‘Increased funding for the Food Safety and Inspection Service will help USDA maintain a safe food supply and implement the interstate shipment of state-inspected meat, as intended by Congress.

“‘Funding for the Agricultural and Food Research Initiative (AFRI) is at its highest level. NFU strongly supports agricultural research, as it is the key to helping agriculture adapt to the challenges of a changing world.

“‘NFU supports the funding for technology in the Farm Service Agency offices, allowing the agency to upgrade its systems.

“‘NFU will continue to work with the president and Congress to ensure the interests of producers are prioritized and represented in the final budget.’

“With a membership of 250,000 farm and ranch families, NFU has for more than 100 years continued its original mission to protect and enhance the economic well-being and quality of life for family farmers and ranchers and their rural communities.”

Next Page: NSAC comments on Obama agriculture budget

Previous Page: NFU statement on proposed FY2011 budget

NSAC comments on Obama agriculture budget

Comments of Ferd Hoefner, National Sustainable Agriculture Coalition policy director:

“The Obama administration budget for food and agriculture is a mixed bag.

”In the dreadful category, the President proposes to turn his back on the widely acclaimed 2008 Farm Bill deal to ramp up support for farmers and ranchers investing in natural resource conservation and environmental enhancement.

“Obama is asking Congress to whack over $500 million in the short term and over $1 billion long term from the mandatory funding for farm conservation programs in the 2008 farm bill.

“The conservation cuts include $380 million from the Environmental Quality Incentives Program (EQIP); 770,000 acres or $70 million (and $700 million over ten years) from the Conservation Stewardship Program (CSP); over 15,000 acres or $35 million from the Wetlands Reserve Program (WRP); $15 million from the Farm and Ranch Land Protection Program (FRPP); $12 million from the Wildlife Habitat Incentives Program (WHIP), and additional amounts from the Grasslands Reserve (short and long term), and other conservation programs.

“The silver lining for NSAC is that Congressional appropriators rejected proposed cuts to mandatory farm bill funding for conservation programs the past two years, with the exception of a $270 million EQIP cut, and we urge them to reject this new proposal in exactly the same fashion. Now is not the time to turn our backs on environmental improvement on the 50 percent of the continental U.S. that is agricultural land.

“Turning his back on his campaign promises to fully back the new Conservation Stewardship Program, the budget President Obama submitted today proposes to start chipping away at contracts between USDA and farmers to comprehensively improve soil and water quality, use climate-friendly farming systems, improve wildlife habitat, and reduce water and energy consumption.

“At his confirmation hearing, USDA Secretary Tom Vilsack had this to say about the CSP: ‘I recognize that this is not only an opportunity to expand income opportunities for producers but it is also great for the environment, and for water quality in particular, and it also provides jobs, rural jobs… (T)his is a job creator, it’s great for the environment, and it’s an income opportunity for marginal land. I’m very supportive of this.’

“For her part, Deputy Secretary Kathleen Merrigan at her confirmation hearing called the CSP ‘a jewel among many wonderful USDA programs. What I like about CSP…is that it recognizes farmers as environmental stewards and rewards their contributions to healthy food, land, water, and wildlife.’

“We agree with the sentiments of then candidate Obama and the then Secretary and Deputy Secretary nominees. We strongly suspect that Congress will reject this ill-advised cut to the only comprehensive working-lands conservation program in the country.

“We support the proposed cut to the per-farm cap for commodity program direct payments from $80,000 a year (married couple) to $60,000 a year, though such a change would obviously require new legislation. The proposed change to reduce the Adjusted Gross Income (AGI) caps, however, leaves us scratching our heads.

“Reducing the means-test for receiving commodity production subsidies to $250,000 ($500,000 for married couples) in non-farm income is a noble sentiment, but an ineffective policy. If it were to become law, the most immediate effects would be negative — encouraging crop share landlords to switch to cash rents (and thus avoid the cap) and encouraging investors to plow back subsidies into more land and equipment (and thus reduce AGI). Ironically, both would increase farm consolidation.

“The irony is further heightened by the President’s decision earlier this month to issue a final rule on commodity program payment limitation law in which he did a complete about face on his campaign promise to close the regulatory loopholes that allow mega farms to collect hundreds of thousands of dollars a year in subsidy checks. Unlike the new, ineffectual AGI proposal which would require Congressional approval and take several years to implement, the payment limit final rule required only the President’s sign off to effectively and immediately halt farm subsidy abuse.

“On the plus side, sustainable agriculture farmers and researchers are cheering the near 50 percent increase proposed by the President for the Sustainable Agriculture Research and Education (SARE) competitive grants program. The $30 million proposed for SARE in FY2011 represents the largest proposed increase in the 22 year history of the program. Most of the increase would help fund a federal-state matching grant program to build long-term sustainability into state and land grant university agricultural programs. Winning congressional passage of the long overdue increase will be a priority of the sustainable agriculture community.

“Two new proposals in the USDA budget sound promising and the local and regional food system farm and business community will be anxiously awaiting further details as they emerge.

“One would build on a NSAC proposal included in the 2008 farm bill to set-aside 5 percent of Rural Business and Industry loans for local and regional food system enterprise development. The President’s new proposal would set-aside up to 5 percent of a wide range of rural development, marketing, and conservation programs for projects in areas in which strategic regional planning is building a stronger rural economic foundation, including the redevelopment of local and regional food and agricultural systems.

“The other is a proposed $35 million for a Healthy Food Financing Initiative that would provide loans for new grocery stores to increase access to healthy foods in urban and rural food “deserts.” That proposal would also target an additional $15 million from other marketing and rural development programs to support the initiative.”

Next Page: American Farmland Trust on proposed budget

Previous Page: NSAC comments on Obama agriculture budget

American Farmland Trust on proposed budget

“‘At a time when we most need to invest in our strategic natural resources and keep them healthy for the future, the President has proposed cuts to key farmland preservation, conservation, and water quality programs,’ says Jon Scholl, American Farmland Trust (AFT) President. ‘The fact of the matter is, slashing these programs will do nothing significant to address our nation’s budget problems while it will dramatically reduce our ability to protect the resources that supply abundant food and a cleaner environment. So we’re concerned that it is penny-wise now, and will be very pound foolish in the future.’

“Despite the administration’s rhetorical desire to support conservation and agriculture, and address such issues as climate change and renewable energy, ‘reductions of over one-half a billion dollars in mandatory conservation program spending will make it much more difficult for farmers and ranchers to make changes necessary to protect our air, land and water,’ adds Scholl. ‘These cuts represent nearly a 20% cut to working-lands conservation programs, yet agriculture is the most cost-effective solution to these very real environmental challenges.’

“The President’s proposed budget would cut hundreds of millions of dollars from working lands conservation programs that was promised under the 2008 Farm Bill. Some of the key cuts concerning AFT include:

• Farm and Ranch Lands Protection Program (FRPP)—A cost-share program that helps farmers keep their land in agriculture in perpetuity has been slated for $55 million in cuts over the next two years. Typically in this program every $1 the government invests in conservation easements is matched by $3 from farmers, local and state programs.

• Environmental Quality Incentives Program (EQIP)—The conservation program that encourages landowners to install buffer strips between fields and streams, fence livestock out of waterways, and more, would be slashed by $380 million, or by 31 percent in 2011.

• The Conservation Security Program (CSP) is to be cut by hundreds of millions of dollars. Depending on the final reimbursement rate per acre used, this could be as high as a $331 million loss. CSP is a program that provides cost-share monies to farmers to assist in implementing on-farm stewardship practices on working farm and ranchland.

“‘On a more positive note, the administration is building on new programs for producers by developing local and regional food systems through new programs under the 2008 farm bill. During the last year, we’ve been excited by the USDA’s Know Your Farmer, Know Your Food initiative and its potential. AFT believes that new economic opportunities that connect farmers with local consumers have numerous benefits, and especially when programs underscore the fact that food comes from farmland nearby, and how without land there would be no food,’ notes Scholl.

“‘During the last year, USDA has moved forward in conservation and environmental programs. They have worked to make programs more efficient, and make constructive policy changes to improve programs. More generally, the administration has acknowledged and defended agriculture’s role in improving the environment, and that’s a good thing,’ says Scholl. ‘However, we were very disappointed today that the administration has undercut the work that they’ve begun by not recognizing that the environmental benefits to society gained over the long run through agriculture far outweigh the investments made by the public now. That’s why we believe this 2011 budget proposal is penny-wise and pound foolish.

“‘We look forward to working with members of Congress and the administration to highlight our concerns, reexamine the President’s budget and recalibrate the priorities for agriculture. We simply must address loss of farmland, and the potential of farms and ranches to maximize their production of environmental benefits like cleaner water and air, sequestering carbon, renewable energy, and more. This is a critical time to invest even more cost-share money, not less,’ concludes Scholl.

TAGS: Legislative
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