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Will Ag Go Under Budget Ax?

What do the American Federation of Teachers, Camp Ronald McDonald at Eagle Lake, Ducks Unlimited, the National Corn Growers Association, the New York Hunger Council, and Salvation Army have in common? They’re among 392 organizations that last month wrote to ask leaders of the House and Senate Budget Committees not to reopen the Farm Bill as a way to reduce the federal deficit.

As early as Tuesday of this week, they’re likely to get an answer they won’t like.

Ferd Hoefner of the National Sustainable Agriculture Coalition (NSAC), another group that signed the letter, told Agriculture.com that the House Budget Committee tomorrow could ask committees with jurisdiction over mandatory spending, including the House Agriculture Committee, to cut spending by a specific dollar amount. 

Hoefner doesn’t know what that number will be, but after checking with offices of knowledgable Democrats and Republicans, he found a pattern of low-ball estimates by the Democrats and higher ones from Republicans.  

“If you take the average, it comes out to around $20 billion,” he told Agriculture.com. That’s a reduction from a decade of projected spending, so it would be $2 billion a year — if the cuts are the same every year.

Over 10 years, the cost of Farm Bill programs, which includes nutrition assistance, is approximately $975 billion, or nearly $1 trillion. So, a $20 billion trim might be just 2% overall, but the catch is where those cuts will be made by the agriculture committees.

On March 9, the Congressional Budget Office (CBO) released its latest 10-year baseline for the projected costs of federal programs. For agriculture, CBO estimates that commodity programs will cost $52.7 billion over the decade of 2014 through 2023. That’s an increase of nearly 50% from that CBO baseline when the Farm Bill was signed into law last year. That’s due to lower crop prices that will likely increase the size of payments from programs farmers are currently choosing. Crop insurance costs are projected to decline slightly, since less-expensive crops will lower the federal government’s premium subsidy. And the cost for SNAP, the Supplemental Nutrition Assistance Program, is up by just under 2%, from food price inflation.

Nutrition programs gobble up most of the Farm Bill costs. The CBO estimate for the years 2016 through 2025 is $743 billion, Hoefner said.  Crop insurance will cost $91 billion for the same time period. Commodity programs will cost $58 billion. And conservation programs will cost $56 billion.

Differences between Democrats and Republicans and the House and Senate over nutrition spending nearly killed the farm bill, but Hoefner expects the latest round of cuts to focus on that, as well as the suddenly more costly commodity title of the farm bill, Title I. 

Conservation programs, already cut by appropriations committees and targeted by the Obama administration, are less likely to be cut, said Hoefner, whose group is among the many farm and conservation organizations that backed the Farm Bill’s conservation title, which consolidated conservation programs.

“I think it’s more likely to be SNAP vs. Title I,” Hoefner said. 

Hoefner doesn’t pretend to know the outcome. In the 1980s and 1990s, when Congress made similar reductions in spending, the money came from Title I, he says. In 1996 it came out of food stamps, the program that preceded SNAP, and in 2005, it affected a broad group of USDA programs. 

As one way of saving part of the$20 billion the budget committees may require, Hoefner’s group supports legislation already passed ahead of the final 2014 Farm Bill that would have put a hard cap on commodity programs of $50,000 and $75,000 for marketing loan gains. It also would have tightened up USDA rules on what it means to be actively engaged in farming, ending payments to most nonfarmers. When the final version of a bill was hammered out by a Conference Committee of House and Senate ag committee members, most of those reforms were stripped from the final law. USDA is expected to issue soon its revised rules defining eligibility for program payments.

All of this shows why the 2014 Farm Bill, often attacked by interest groups on the right and the left when it was being written, is suddenly popular with every major commodity and farm group, hunters and fishermen and women, and a long list of churches and food banks. 

An in-depth analysis of the CBO baseline and the budget-cutting process can be found on the NSAC Blog. 

 

 

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