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Farm Bill Proposal Would Save $40 Billion

Senator Dick Lugar, R-Ind., and Representative Marlin Stutzman, R-Ind., have introduced the Rural Economic Farm and Ranch Sustainability and Hunger Act or REFRESH. The bill targets $40 billion in USDA cuts to help meet federal deficit reduction goals. Roughly two-thirds of the savings would come from farm and conservation programs, and a third from nutrition programs, which represent three-fourths of the USDA budget. 

Under the bill, funding for farm programs would be cut $16 billion, a 24.5% reduction. Conservation programs would be updated and streamlined for a savings of $11.3 billion, a 17.6% reduction. And nutrition program eligibility loopholes would be closed saving $13.9 billion, only a 2% reduction.

The Lugar-Stutzman bill would end current farm programs including direct payments to farmers, counter-cyclical payments, the ACRE program and marketing assistance/loan deficiency payments. The REFRESH bill would establish an aggregate risk and revenue management program that allows producers to protect between 90% and 75% of their expected crop revenue. All farmers would be able to purchase supplemental revenue insurance that is underwritten by the USDA Risk Management Agency.

Lugar and Stutzman propose repeal of the mandatory federal sugar program, allowing for market pricing of sugar. And their bill replaces dairy price support and milk income loss contract programs with a voluntary margin protection program that covers 80% of the producers' production history when margins fall below $4 per hundred-weight.

REFRESH would also close eligibility loopholes, eliminate government overlap and improve the efficiency of the Supplemental Nutrition Assistance Program. The lawmakers say the savings of $14 billion come without devastating the program used by as many as 43 million low-income Americans in need of additional food security.

Senator Lugar, who was Chairman of the Senate Ag Committee in 1996, says they offer the bill as a thoughtful option for consideration by the House and Senate Agriculture Committees, as well as the Congressional Deficit Reduction Super Committee charged with making real federal spending cuts by the end of the year.

"Long before I came to Washington, I've opposed the direct payments that handcuff farmers and manipulate markets," Stutzman said. "I'm happy to introduce legislation with Senator Lugar that ends those direct payments. We've proposed genuine safety nets - options that give confidence and expand opportunities for farmers, not outdated systems that restrict their options."