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Wednesday...Temperatures will range from a high of 61 to a low of 44 degrees with partly cloudy skies. Winds will range between 3 and 11 miles per hour from the northnortheast. No precipitation is expected.
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Farm cuts proposed in Senate measure to avoid sequester

Feb. 21, 2013 | 0 comments

Farm groups had mixed reaction to a plan proposed by Sen. Majority Leader Harry Reid (D-NV) to avoid the sequester - a set of onerous budget cuts that are set to go into effect automatically on March 1, with some of them saying that the devil's in the details.

The farm bill measures are part of a new "American Family Economic Protection Act" proposal - a larger package of spending cuts and revenue increases Reid has proposed as an alternative to the deficit reduction cuts known as sequestration.

Bob Stallman, president of the American Farm Bureau, said he was encouraged by Reid's $110 billion fiscal policy plan that would help put the nation on a better long-term fiscal road, but said he was concerned about the details of how the planned cuts would be made.

"It appears that the lion's share of budget reductions will come from cuts to agricultural programs that will create much harm in farm country," Stallman said.

Reid's plan would make over $27.5 billion in net spending reductions from farm programs. It would also cut defense spending by $27.5 billion over the next 10 years.

The total elimination of direct commodity payments yields $31 billion, but the bill also reinvests $3.5 billion to pay for a full farm bill extension, including the programs left stranded by the earlier partial farm bill extension.

It would also allocate funds for farm disaster assistance.

Reid's plan would raise an additional $55 billion by closing two tax loopholes and placing a minimum tax on millionaires to counteract the effect of tax loopholes, to raise another $55 billion.

The automatic budget cuts known as sequestration would be delayed until January 2014, in hopes that in the meantime a larger long-term deficit reduction deal could be reached by Congress.

Without new action by Congress, sequestration goes into effect on March 1, cutting farm commodity and conservation programs by some $7 billion and reducing every USDA discretionary program by 5 percent.

In Reid's proposal the biggest cuts would come from elimination of direct payments, which most farm leaders and lawmakers agreed last year were on the chopping block.

But what Stallman disagrees with this time around is that Reid's plan has no provision to allow the use of some of those savings for reinvestment in new safety-net or risk-management concepts.

In last year's go-round on the farm bill, lawmakers generally agreed to make cuts in one area of farm policy and use some of that money to help farmers in alternative ways, like added subsidies for crop insurance programs.

When the Senate passed its version of the farm and nutrition policy package last June, it included overall cuts of $28 billion. When the House Agriculture Committee passed their version in July, cuts totaled $35 billion.

The House adjourned in the fall without ever taking up its committee's version of the five-year package.

Stallman said he's concerned about the magnitude of the proposed cuts because they will prevent House and Senate Agriculture committees from crafting a farm bill that includes the safety-net and risk-management provisions that farmers need.

"We also believe it is very unfair that only the Defense and Agriculture programs are tapped to reduce spending in this bill," Stallman said.

Last year's farm bill process was on a path without direct payments, he added, but at least that path did include significant reinvestment of some of that funding to other farm programs and crop insurance tools.

"It is vital that a realistic portion of the proposed funding cuts to agriculture be reinvested to support risk-management programs that are so vital to farmers and ranchers."

Reid's plan directs some of the savings to extend disaster programs that dropped out of federal policy because they had expired before Congress passed a farm bill extension on New Year's Day.

His proposal also covers several other expiring provisions in the farm bill. But Stallman said that farmers need some kind of stable, long-term, risk-management program because they face constant market instability and potential yield losses.

Stallman said he knows there will be some pain involved in dealing with the federal budget crisis, but said that pain should be a "shared experience and not take such a heavy toll from any one sector.

"Once again, agriculture is being asked to step up to the cutting table and hand over substantially more than its fair share."

Ferd Hoefner, policy director with the National Sustainable Agriculture Coalition, said that Reid's plan includes a fix to some of what was agreed to in a farm bill extension "fiasco."

Reid's proposal to end direct payments and restore several farm bill programs that were left out of the farm bill extension as part of the fiscal cliff deal would be good for renewable energy, rural small businesses, value-added agriculture, new and beginning farmers, conservation, specialty crops, organic farming, minority farmers, and local food producers, he said.

Programs in all those areas "were thrown under the bus" in the fiscal cliff deal in order to "preserve every last dollar of unneeded, untargeted, and antiquated direct subsidies," he added.

The Reid's proposal, unveiled Feb. 14, would right that wrong, Hoefner said. It would also provide immediate funding for livestock disaster assistance, another item left out of the fiscal cliff deal.

His organization applauds 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."

The new package "is a first step toward restoring both a sane fiscal policy and a fair farm bill extension," he added.

The sustainable agriculture community is calling 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," he added.

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