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Proposed Budget Continues to Receive Reaction

A number of agricultural groups and organizations are expressing disappointment in the proposed budget that President Obama sent to Congress Monday.

The American Meat institute points out that the proposed 2011 Federal budget includes an intention to submit legislation to collect two new inspection user fees. Under the proposal, plants that have sample failures or require additional inspection activities would be charged a performance-based user fee. A flat fee, based on plant size, would apply to facility applications and annual renewal activities.

USDA estimates total collections from the new fees could total as much as $12.6 million. American Meat Institute President and CEO J. Patrick Boyle says that user fees for meat and poultry inspection have been consistently and properly rejected by the U.S. Congress. He likens them to a food tax.

The American Soybean Association is unhappy with the proposal to cut funding in 2011 for key farm programs, federal crop insurance, and the Market Access Program. ASA President Rob Joslin, a soybean producer from Sidney, Ohio, says the plan would undercut long-term economic decisions made by soybean producers. ASA opposed similar proposals by the Administration last year when it tried similar moves that would have re-opened the 2008 farm bill.

The President's Budget for FY-2011 proposes to reduce the cap on Direct Payments to farmers by 25%, from $40,000 to $30,000. The President's budget also proposes to reduce by $250,000 each, the Adjusted Gross Income limits that can be earned from farm and non-farm sources in order to be eligible for farm and conservation payments.

The Administration is also proposing changes in the federal crop insurance program that would reduce its cost by $8 billion over 10 years. And another proposal would cut spending under MAP, which funds export promotion activities, by 20%, or $40 million per year.

According to Joslin cutting the farm safety net to achieve minimal savings would jeopardize an industry that continues to be a key driver for U.S. economic recovery and export growth. 

The Chairman of the National Cotton Council, Jay Hardwick, a Louisiana cotton producer, says the President's proposal on phasing down direct payments and limiting total payments affects the farms that produce more than three-fourths of all agricultural products marketed in the United States. Hardwick points out that the safety net for America's farm families must be maintained.

Hardwick says Congress spoke clearly to ensure sound agricultural policy that is fiscally responsible in the passage of the last farm law. Hardwick believes that direct payments are compliant with the direction being taken in the World Trade Organization to reduce trade distorting support. The cotton industry leader says in the midst of a credit crisis, it makes no sense to threaten a vital component of the borrower's cash flow.

Also reacting to the 2011 budget proposal is National Farmers Union President Roger Johnson. He says the cut in crop insurance, $8 billion over 10 years, comes as a disappointment, as crop insurance is part of the vital safety net for farmers and ranchers providing a safe and secure food supply.