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Farm Bill Again Targeted for Big Budget Savings

DC Dialogue

Ryan’s budget proposes $33 billion in cuts to farm safety net and reforms nutrition programs.

Published on: March 23, 2012

House Budget Committee Chair Paul Ryan, R-Wis., unveiled the House Republican budget proposal for FY2013 this week during a speech before the American Enterprise Institute in Washington. Ryan’s proposal calls for $33.2 billion in cuts to agricultural programs, focusing primarily on direct payments and crop insurance.

The proposed cuts are $10 billion more than the agreement reached late last year in a bipartisan, bicameral manner by the House and Senate Agriculture Committees.

Ryan’s proposed cuts would be reconciled by the House Agriculture Committee. And as House Agriculture Committee Chairman Frank Lucas, R-Okla., cautioned people about “reading too much into the numbers or policy proposals in either the President’s budget or the Ryan budget,” adding that they are “only suggestions.” And in questioning about the cuts, Ryan did state the budgetary savings would be up to the committees on how to exactly make the cuts.

Normally the House takes the lead on writing the farm bill process, where many of the budgetary savings would have to be implemented. However, the Senate has done more legwork on the farm bill and with its seasoned committee members will be taking the first stab at a bill this year.

Lucas said during the farm bill writing process both policy and deficit reduction targets will be developed in conjunction with ranking member Collin Peterson, D-Minn., and other members to write a “fiscally responsible farm bill.”

 Senate Agriculture Committee Chairwoman Debbie Stabenow was critical of Ryan’s budget proposal, stating it was “irresponsible” and undermines one of the few sectors in the economy that is growing and creating jobs. She recognized that agriculture is willing to do its part to reduce the deficit, but said the proposal falls short of addressing the problem.

“Last year, the House and Senate Agriculture Committees developed bipartisan proposals to consolidate programs and make them more cost-effective, saving billions while still strengthening key priorities to help agriculture continue to grow,” Stabenow said. “This budget as proposed does nothing to strengthen production agriculture. Instead, it will hurt families and America’s economy at a time when we need to be creating jobs.”

Crop insurance cuts under the Ryan plan, much like the White House plan, would require farmers to pay higher premiums. Farmers, as well as those on the ag committees, are critical of any changes to the popular crop insurance program.

In an interview following the release of the budget, Secretary of Agriculture Tom Vilsack said there may be a way to strike a balance among the three components of crop insurance: the insurance companies, insurance agents and farmers.

“The president has suggested that perhaps a 12% return on investment would be a little bit better than the 14% that insurance companies are enjoying today. Maybe that’s a point of discussion. Nine hundred dollars a policy as opposed to maybe $1,000 a policy to the agents for servicing. There’s an area of discussion. Folks who are subsidized more than 50% – in some cases producers receive a 60 to 62% subsidy – maybe there can be some adjustments there.”

Additionally, the chairman’s budget includes a dramatic transformation of the Supplemental Nutrition Assistance Program (SNAP), formerly known as the food stamp program, which would cut $123 billion from the program and shift it to a state-run block grant program.

 Peterson stated the process outlined by the House Republican budget “all but guarantees there will be no farm bill this year.” He added, “The Ryan budget proposes significant cuts in the farm safety net and conservation programs, and slashes spending on nutrition programs that provide food for millions of Americans. It is appalling that in an attempt to avoid defense cuts the Republican leadership has elected to leave farmers and hungry families hurting.”

Republican leaders hope to hold a House vote next week. The Democrat-controlled Senate is all but certain to reject the Ryan plan, if it considers it at all.