Obama Targets Ag for Cuts

DC Dialogue

President’s job proposal cuts $30B from commodity programs and crop insurance and $2.4B from conservation.

Published on: September 23, 2011

President Obama’s jobs proposal released Monday targets agriculture with $33 billion in cuts—$30 billion of that coming from Title I commodity programs and crop insurance and $2.4 billion from conservation.

Obama’s proposal would eliminate direct payments, extend SURE, which currently has no baseline funding, and cuts crop insurance by more than $8 billion. View a fact sheet of the White House’s proposal.

Agriculture Committee leadership in both the House and Senate decried Obama’s proposal, stating agriculture is willing to do its part to reduce the federal deficit but the proposed level of farm cuts need to be made by the Agriculture Committee, which have received input from farmers and others in the agriculture community.

Rep. Frank Lucas (R-OK), chairman of the House Agriculture Committee, and Sent. Pat Roberts (R-Kan.), ranking member of the Senate Agriculture Committee, said, "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.”

The leading Republicans note for example, cutting $8 billion from the crop insurance program puts the entire program at risk. “We have heard again and again from producers that crop insurance is the best risk management tool available. In jeopardizing this program, the President turns a deaf ear to America’s farmers,” they said.  

Sen. Debbie Stabenow, (D-Mich.), chairman of the Senate Agriculture Committee said in an interview, she is “concerned about the president’s proposals on cutting crop insurance and do not support that.”

Tom Zacharias, president of National Crop Insurance Services, said, “The tragic irony in this proposal is that it may hamstring the nation’s primary risk management program that it is already contributing at least $4 billion towards deficit reduction as a result of program changes made last year – and $12 billion overall when changes made in the 2008 Farm Bill are taken into account. This is happening at a time when the industry is providing coverage on approximately 260 million acres at a value of over $110 billion.”

Meanwhile, SURE has not worked as intended for most crops, but the President proposes extending it.  The National Sustainable Agriculture Coalition criticized the President for looking to extend SURE, which they called a “largely failed disaster program,” at a very substantial total cost equaling roughly half of the total savings created by eliminating direct payments. “Disaster assistance should be built into the new safety net at a significantly lower cost, and eliminated as a free-standing program,” NSAC said.

The President only proposes a $2 billion cut, roughly 3%, to conservation despite his claim that conservation spending has increased 500% through the years, Lucas and Roberts said. 

And, the President does nothing to address waste, fraud, abuse, and other integrity issues within nutrition programs, which account for 80% of USDA spending.

The Super Committee, which is charged with developing a plan to trim the federal deficit by at least $1.5 trillion before Nov. 23 when it has to kick its plan to the full Congress, is meeting regularly and assembling staff. Undoubtedly, cuts to agriculture are on the table but the Super Committee has not yet indicated how much budget reduction it will require from the agriculture industry.

When asked if Stabenow expected combined work, possibly a combined submission to the Super Committee with recommendations from both ag committees, she said Lucas and her have had many conversations and committee members are working together. However, she said we all share a concern for what we’re seeing. “Frankly, the cuts that came out of the House, the proposals by the President, other proposals that have been made are very concerning,” she noted.

“And we know that to the extent that we can work together and come together on a joint set of ideas that that is definitely in the best interest of agriculture and of the broader economy,” she added.

What are your thoughts on the latest potential agriculture cuts? How would it impact your farm?

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  1. Anonymous says:

    I suffered throught the Carter years when he was president. I thought those were bad. Well Mr.Obama at the rate you are going the Carter years may look good after all. I hope those poeple out in Iowa do a better job next time at picking a president. Because I don't know if I will be in business come election time. Mr.Obama you have been a major disappointment.

  2. Anonymous says:

    Here is a link to the Chicago Tribune editorial published on Monday September 26, 2011 - http://articles.chicagotribune.com/2011-09-26/news/ct-edit-farm-20110926_1_end-farm-subsidies-farm-programs-farm-bill Read it and weep.

  3. Anonymous says:

    Can somebody please remember this next November? The big black bus from Modor and the grandstanding at ethanol plants is just a campaign play. Obama does not care about farmers just union contributors!

  4. Anonymous says:

    Re cuts in direct payments in ag - only the poor and the new farmers will stay in the crop insurance system. The older farmers and landowners (like me) will just stop spending any money on discretionary items and become self insured or cash rent the land. Personally, if the premiums become unaffordable, I will hunker down, pay down debt this year, and become self-insued saving the $20,000/year I currently pay in premiums. Only those farmers that have significant debt and are forced into buying insurance will stay in the plan. The Feds will have to spend more on disasters because the crop insurance cuts will not be subsidized by financially capable farmers premiums. Only those with debt will stay in. Those with financial resources will leave and the increased premiums will be taxpayer-subsidized. Oh and the direct payments? Those won't affect rent - just commodity prices which should rise when all the little guys go broke.Happy yet, Obama? Socialism doesn't work.

  5. Anonymous says:

    I like the proposal by the four senators (on the home page). Everyone has to admit that the days of counter-cyclical and direct payments are over. Any insurance plan would have to charge realistic rates. I am tired of being a central Illinois farmer supporting the program. If a 1:1 ratio of pay ins and pay outs was established for each state it would be much fairer. Right now Illinois growers only get .3 to.6 back while other states routinely receive 1.6 to 1.9 back. Any real insurance would have dropped those that have crop failures 4 out of 5 years. Don't whine because you voted all these tea partiers in and now they say the free ride is over. This is not socialism but capitalism. The efficient and strong will survive and the rest will go by the wayside. The changes will be determined by the Monsanto's, DuPonts, Bayers and others. The family farmer is going to be a quaint notion that they all give lip service to and do everything to promote the corporate farms.

  6. Anonymous says:

    Ridiculous! I am not sure about other farmers, but without the help of direct payments, my operation would not survive financially. People do not understand the importance of these programs. If OBAMA cuts federal funding, will my landlord lower the cost of rent? I seriously doubt it. Don't worry OBAMA, somone will pay it. It just won't be the small farmer who has to have it. Good luck with re-election.