A war of words has erupted between the Senate and House Ag Committees over a sequestration plan for agriculture. Senate Majority Leader Harry Reid has offered a sequestration package that includes farm bill provisions. Ag Committee Chair Debbie Stabenow says the package would eliminate direct payments avoid all sequestration-related USDA cuts and fund disaster assistance programs that were not included as part of the farm bill extension. Stabenow says the provision will fill the holes in the extension passed New Year’s Eve so that all of agriculture is supported. According to the National Sustainable Agriculture Coalition – the elimination of direct payments would save 31-billion dollars over 10 years. Overall – the package is controversial because half of the money to avoid across-the-board cuts would come from spending cuts and half would come from what Stabenow describes as closing tax loopholes on the wealthy and well-connected. Republicans have been opposed to any tax increases. Stabenow expects a vote on the package before March 1st.
If the measure is approved – the Agriculture committees would not need to make cuts in any other program in the agriculture budget function when writing a new five-year farm bill. Stabenow believes Congress could write a bill with the money remaining in the commodity title. She says the decision to eliminate direct payments is based on bipartisan agreement in the House and Senate to do so last year. She says the cuts would likely begin in fiscal year 2014.
Meanwhile, House Ag Committee Chairman Frank Lucas says the plan from Senate Democrats to avoid the sequester cuts slated to take effect March 1st is not balanced and not acceptable. Lucas says farmers and ranchers want to be part of the solution to the fiscal crisis this country faces. He says his committee demonstrated that commitment in passing a comprehensive, balanced farm bill that cut more than 35-billion dollars from all agricultural spending. Lucas says the House Ag Committee made those reforms in the context of a comprehensive, five-year farm bill that ensured the food and fiber needs of all Americans were met. According to Lucas – the Senate approach takes away investment in rural America without addressing the hole it will create.
Farm groups also expressed concern over the Senate plan. “No producer, no co-op across the country doubts the need for our federal government to get its spending more in line with revenue—agriculture has always stood ready to contribute its fair share to deficit reduction,” said Chuck Conner, president and CEO of NCFC. “Unfortunately, the Senate proposal fails to treat farmers equitably. The only parts of the budget taking cuts under this proposal are defense and agriculture. It should also be noted that this cut would be three times what agriculture would contribute to deficit reduction if the sequestration process is allowed to move forward on its own.”
“The larger issue is that the proposal targets only a tiny sliver of the farm bill budget for cuts–over three quarters of farm bill spending goes towards nutrition programs like SNAP and these programs will not contribute a single penny towards deficit reduction under this proposal,” he continued. “Less than a year ago, the Senate found savings of $4.5 billion from SNAP when they overwhelmingly passed a new five-year farm bill; I think that farmers have the right to ask their Senators why these cuts have gone from acceptable to unacceptable in less than 10 months.”
Conner also expressed concern that the end result of the cuts would also have a disproportionate impact on certain commodities and certain regions of the country; in effect, while the proposal is bad for all of row crop agriculture, its burdens will be placed heavily on those in the South, among other places. In addition, he noted that the Senate proposal would severely limit the resources available to write a new five-year farm bill before the current extension of the last bill expires in September.
After reviewing the Senate plan the American Farm Bureau Federation came out against the proposal. “While initially we are encouraged that a new $110 billion fiscal policy proposal from Sen. Majority Leader Harry Reid (D-Nev.) would help put our nation on the long road toward greater fiscal responsibility, the details on how he proposes to do so raise strong concerns. It appears the lion’s share of budget reductions will come from cuts to agricultural programs that will create much harm in farm country. More than $27.5 billion in net spending reductions are earmarked for farm programs—with all the cuts coming from the elimination of direct payments with no provision to allow use of some of the savings for reinvestment in new safety-net or risk-management concepts. The magnitude of these proposed cuts will hamstring the House and Senate Agriculture committees from crafting a farm bill that includes the safety-net and risk-management provisions that our farmers need. We also believe it is very unfair that only the Defense and Agriculture programs are tapped to reduce spending in this bill.” AFBR President Bob Stallman added, “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.”