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• Over the longer-term, Congress will need to write a new farm bill in 2012, and some programs that are authorized by the bill will face serious funding challenges.
• The problem is that future spending will be based on past spending baselines.
The Supplemental Revenue (SURE) disaster assistance program expires Oct. 1, and the Wetlands Reserve Program and others will expire next year. Congress will have to glean money from other programs if it wants to extend them. "Just making a copy of the 2008 farm bill is not an option. The funding won't be there," Thatcher said. "The challenge will be identifying those programs that are most critical to providing a safety net for farmers and ranchers, and trying to preserve as much of that safety net as possible."
Here are five things farmers and ranchers might like to know about the current budget debate and the effort to write the new farm bill next year.
1.) For agriculture, there are really three different budget-related issues to follow: funding for this year, next year and beyond. First, Congress needs to pass a long-term "continuing resolution" to keep the government funded until the end of this fiscal year, through September. Congress is in deficit-reduction mode, and the House-passed bill would cut $60.8 billion in spending this year, including $5.21 billion, or 22 percent, in USDA spending compared to last year's appropriation. Large cuts would come from food safety, conservation, rural development and agricultural research.
Second, the 2012 budget process has begun. President Obama sent his budget proposal to Congress in mid-February. It would cut agriculture spending by $2.5 billion, but perhaps the most direct impact to farmers and ranchers would come from a proposal to lower payment limits and income limits that determine whether farmers can receive direct farm payments. The proposal is only that, a proposal, and it will be up to Congress to decide whether to pursue the idea.
Also, the budget resolution that Congress will debate this month will outline how much the appropriations subcommittees should allocate to discretionary programs under their jurisdiction. This year's budget resolution could include austere "reconciliation" instructions that would require committees to make appropriations and policy decisions to meet specific reduction targets in both mandatory (entitlement programs) and discretionary spending (subject to annual appropriations bills).
On the downside, a reconciliation bill would likely require deep cuts in programs on which farmers and ranchers depend. On the upside, the pain of reducing the federal deficit would be shared across program areas and constituencies.
Third, with a record budget deficit (nearly $1.5 trillion in 2011, according to a Congressional Budget Office forecast) and fierce competition for funds among different programs, there will be tremendous pressure to reduce the size of farm programs when Congress writes a new farm bill to authorize farm, conservation, nutrition and agricultural research programs for the next few years. If there is a budget reconciliation measure next year, it will coincide with the writing of the farm bill and could have a big impact on the size and structure of safety-net programs.
2.) Agriculture programs already represent a tiny portion of the federal budget. They are projected to be just 2 percent of total federal spending from 2011 through 2020. Take out spending for food stamps, school meals and other nutrition programs, and the agriculture piece of the pie shrinks to just about half of 1 percent (0.53 percent).