Presidential Budget Keeps USDA Funding Steady

The Presidential budget may keep USDA funding flat, but provides for big changes in crop insurance, food aid

Published on: Apr 12, 2013

President Obama Wednesday released his proposal for the FY14 budget, keeping agriculture spending relatively unchanged but announcing funding shifts that will ultimately affect many USDA programs.

Top issues in the budget for many farm groups remained farm subsidy payments, research and renewable fuel provisions and food aid restructuring.

According to the portion of the budget specific to agriculture, eliminating direct payments and decreasing crop insurance offerings will provide $37.8 billion in deficit reduction over 10 years. President Obama's budget proposes that the reforms will improve targeted conservation efforts.

According to the USDA budget summary, the legislation also proposes to expand the dairy gross margin insurance program. An additional $1.3 billion is allocated for organic agriculture, specialty crops, and beginning farmers.

The Presidential budget may keep USDA funding flat, but provides for big changes in crop insurance, food aid
The Presidential budget may keep USDA funding flat, but provides for big changes in crop insurance, food aid

Obama's budget also invests $4 billion in renewable and clean energy and environmental improvements to drive "global competitiveness in the energy sector."

Research efforts will also see increased funding; the budget requests $383 million for competitive grants through the Agriculture and Food Research Initiative, which will support regional research projects involving federal, university and industry partners.

The Supplemental Nutrition Assistance Program for Women, Infants and Children will see $7.1 billion to ensure nutritional provisions for at-risk mothers.

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Food Aid, another big change in the President's budget, would replace in-kind aid with cash vouchers for purchases of food aid from foreign suppliers instead of commodities U.S.-grown supplies. The proposal would shift jurisdiction of $1.5 billion from the House and Senate Agriculture Committees to Foreign Operations, and stipulate that only 55% of food aid be purchased from American farms – a plan American Soybean Association President Danny Murphy said eliminates a key export market.

"Federal food aid programs provide nutrition to impoverished people in developing countries, and we remain absolutely opposed to the replacement of in-kind aid with cash, which takes a key market away from American producers and places aid recipients at risk by allowing purchases from suppliers whose safety and quality are unknown. The proposal would also adversely affect shipping and logistics providers, packaging companies, and private voluntary organizations," Murphy said.

Murphy also expressed concern over the crop insurance changes, though he praised the funding for research and transportation infrastructure projects.

"As ASA has said many times over, soybean farmers are willing to do our part to address the nation's fiscal challenges, and we have a vested interest in ensuring that the cuts needed are made in a strategic manner, with all potential consequences taken into account," Murphy said.

Overall discretionary funding for the USDA is about $23 billion, relatively flat from last year. Mandatory funding is about $123 billion, down from last year's $130 billion.

Click here to view the President's Budget Proposal for the USDA.