Reaction to Obama’s agriculture budget; cutting subsidies

Breaking news, compiled by Mark Dunlea, Executive Director of Hunger Action Network of New York State

A joint news release yesterday from House Agriculture Committee Chairman Frank Lucas (R-OK), and Senate Agriculture Committee Ranking Member Pat Roberts (R-KS) stated in part that, “The agriculture community remains willing to do its part in getting our fiscal house in order, but, in essence, President Obama’s plan for economic growth and deficit reduction is not credible.

“The President’s policy priorities reveal a lack of knowledge of production agriculture and fail to recognize how wholesale changes to farm policy would impact the people who feed us. For example, cutting $8 billion from the crop insurance program puts the entire program at risk…And, the President does nothing to address waste, fraud, abuse, and other integrity issues within nutrition programs, which account for 80 percent of USDA spending.”

President’s Deficit Plant: Agricultural Provisions
Chris Clayton reported yesterday at DTN that, “The $4 trillion savings plan offered Monday by President Barack Obama eliminates direct payments [related White House Blog update] and significantly cuts taxpayer subsidies for crop insurance over the next decade.”

The DTN article stated that, “The White House stated a net savings of $33 billion would come from agricultural programs over 10 years. The plan proposes eliminating direct payments to save $30 billion, as well as $8.3 billion in cuts to crop insurance. Another $2 billion would be saved in conservation. That’s $40.3 billion in total cuts to agriculture programs, but the plan also extends the Supplemental Revenue Assistance (SURE) program through 2016, which negates some of the savings.

“In its recommendations, The White House noted the agriculture sector is doing well economically compared to other parts of the economy. Income in 2011 is forecast at $103.6 billion, up $24.5 billion from 2010, ‘the highest inflation-adjusted value for net farm income in more than 35 years.’”

The President’s proposal
stated on page 18 that, “In 2010, the U.S. Department of Agriculture (USDA) and the crop insurance companies agreed to changes that saved $6 billion over 10 years from administrative expense reimbursement and underwriting gains while also improving service to underserved States. The Administration believes there are additional opportunities for streamlining of the administrative costs of the program.”