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President’s ag budget again unwelcomed

February 13, 2020

Jacqui Fatka

White House has suggested cutting crop insurance by almost $25 billion and conservation programs by more than $9 billion.

President Donald Trump released his proposed spending for fiscal year 2021 this week, garnering a considerable amount of criticism on its priorities. The $4.8 billion budget would cut both mandatory and discretionary funding for the U.S. Department of Agriculture and other federal agencies while boosting spending on infrastructure and defense initiatives.

As always, Congress will have the final say on appropriated levels. Senate Agriculture Committee ranking member Debbie Stabenow (D., Mich.) said she’ll oppose these cuts.

“After three years of consistent cuts, the Trump Administration has continued to neglect agriculture and rural America. While farmers are struggling with uncertainty, the President is once again slashing crop insurance and conservation tools that help producers address the climate crisis,” Stabenow said.

House Agriculture Committee chairman Collin Peterson (D., Minn.) said the budget includes a call for an 8.2% reduction in discretionary spending at USDA at a time when the department’s field operations are significantly understaffed, as well as proposing billions in mandatory cuts to crop insurance, conservation spending, disaster assistance, the Supplemental Nutrition Assistance Program (SNAP) and other programs.

“This is what happens when ideologues decide to cut programs just for the sake of cutting," Peterson said. "We will make sure that the farm bill isn’t cut during this year’s budget process. What’s worse is the President is proposing all these cuts without any attempt to balance the budget.”

The White House has suggested cutting crop insurance by almost $25 billion and conservation programs by more than $9 billion. Peterson noted, “They also propose to eliminate assistance for livestock producers in drought-stricken areas and end our ability to provide U.S. commodities for food aid. The proposed budget eliminates the Rural Energy for America Program and several important rural economic development programs. Finally, their proposed changes to the SNAP program reduce SNAP spending by $182 billion.”

After the President released the Administration’s budget request, National Association of State Departments of Agriculture (NASDA) chief executive officer Dr. Barb Glenn stated: “State departments of agriculture depend on a robust partnership with the federal government to achieve their missions. This year, the President’s budget delivers mixed results on programs important to NASDA members. Proposed investments in animal and plant health, market access and food safety traceability are appreciated.

However, the proposed budget falls short of adequately funding essential programs for American agriculture and rural communities."

She added, “If enacted, the topline cuts to the U.S. Department of Agriculture and the Environmental Protection Agency would negatively impact the agriculture community. Conservation and crop insurance programs would bear the brunt of the burden, undermining resilience for rural America. Closing the rural opportunity gap remains a top priority for policy-makers, and we simply cannot support resilience for rural America without dedicating appropriate resources.”

The budget includes nearly $1.1 billion to fully fund the costs necessary to support more than 8,700 Food Safety & Inspection Service personnel who ensure the safety of meat, poultry and egg products at more than 6,400 U.S. processing, slaughter and import establishments.

The budget supports the continued establishment of National Bio & Agro-Defense Facility (NBAF) and provides $81 million for operations and maintenance costs in fiscal 2021. Funding is also requested within USDA's Agricultural Research Service (ARS) and Animal & Plant Health Inspection Service to transition highly pathogenic animal disease work from the obsolete facilities at the Plum Island Animal Disease Center to NBAF.

The budget includes $3.3 billion to support research to advance the competitiveness of U.S. agriculture and promote food security. This includes $1.4 billion to support the core research projects of ARS and $1.6 billion in discretionary funding to support the extramural agricultural research, education and extension activities of the National Institute of Food & Agriculture, including $600 million for competitive grants through the Agriculture & Food Research Initiative (AFRI).

Thomas Grumbly, president of the Supporters of Agricultural Research Foundation, said the group is “encouraged" that the budget requests more funding for AFRI, because "we need to plow as much money and resources into agricultural research as possible.” He added that USDA’s entire research and development operation "needs to be fully funded. From the commodity markets to the extreme weather, 2019 was a difficult year for farmers. Farmers are struggling today, and they will not be able to face tomorrow’s challenges unless we can generate more innovation in the future.”

The budget includes $79 million to fully support the estimated $8.9 billion in farm loan demand, providing loans to an estimated 35,000 farmers and ranchers to finance operating expenses, refinance debt or acquire a farm.

It has become an annual tradition for the Administration’s proposed budget to include cuts to crop insurance, regardless of party affiliation, and this year was no different. “It’s inexplicable as to why [the Office of Management & Budget] would target such a critical risk management tool for budget cuts. The proposed cuts will make crop insurance unaffordable and unavailable for farmers, seriously undermining the farm safety net,” according to a joint statement from the American Association of Crop Insurers, Crop Insurance & Reinsurance Bureau, Crop Insurance Professionals Assn., Independent Insurance Agents and Brokers of America, National Association of Professional Insurance Agents and National Crop Insurance Services.

“It must be understood that issuing cuts to crop insurance can make policies more expensive for farmers. When input costs remain high and commodity prices low, this additional cost could result in many growers not having insurance and may make it difficult for them to stay in business,” added National Association of Wheat Growers president Ben Scholz, a Lavon, Texas, wheat farmer.

Trump’s budget would lowered the adjusted gross income eligibility threshold for crop insurance and commodity programs from $900,000 to $500,000. “We are pleased that this change would likely direct more support to the farmers who need it most; however, this gesture seems hypocritical following the USDA’s recent doubling of payment limitations for trade assistance payments,” National Farmers Union president Roger Johnson said.

The fiscal 2021 budget proposal seeks to enact a cut of $1.66 billion to in-kind international food aid. “Feeding the world is a driving motivation for many agricultural producers. The U.S. wheat industry is a champion of food aid programs, making up an average of 40% of all in-kind food aid from the U.S. each year,” Scholz noted.

The Administration did call for full funding the Market Access Program at $200 million and the Foreign Market Development Program at $35 million.



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