Concerns Continue Over Ag Budget Cuts

The administration’s budget for USDA in 2010 is kind of like a good news, bad news scenario for agriculture. The good news is that President Obama has proposed an increase in overall spending for USDA. The bad news is that it cuts spending for farm programs, placing a hard cap of commodity program payments of $250,000, phasing out direct payments to farmers with gross sales over $500,000 and making cuts in the federal crop insurance program.

During a House Appropriations subcommittee hearing this week, Agriculture Secretary Tom Vilsack acknowledged that the proposal is meeting resistance from agricultural groups. “We’re willing to work with Congress on this,” Vilsack said. “There has been a lot of conversation about whether or not it ought to be adjusted gross income as opposed to gross sales. We’re certainly happy to look at that. We’re also certainly happy to look at the hard cap of $250,000.” Vilsack says they want to maintain a good safety net for farmers but at the same time wants that to be fiscally responsible.

National Corn Growers Association First Vice President Darrin Ihnen says the areas targeted by the president’s budget are alarming. “In agriculture today it is relatively common to see gross annual sales of over $500,000, but that does not mean net income,” said Ihnen. “Our growers need a strong safety net and our industry will be weakened if the government begins to cut crop insurance funding and basing payment eligibility on rules that ignore production costs and long term business investment.”

NCGA earlier this year joined a coalition of national farm and agricultural groups to oppose President Obama’s proposal.