While no specific cuts to agricultural programs or spending were mandated in the initial $900 billion in spending reductions that were part of the Budget Control Act of 2011 (BCA), domestic discretionary spending caps are established to achieve the savings.
It will be up to Congressional committees to decide on how to achieve these savings, and it is likely that agricultural spending will be reduced dramatically to help achieve the savings (as has already happened in the FY 2012 agricultural appropriations bill passed by the House).
With regard to the other $1.2 to $1.5 trillion in deficit reduction called for under the agreement, cuts to ag spending and farm programs are certain.
While the BCA does not specify how large, discussions leading up to its passage contained cuts anywhere from $11 billion to $48 billion over 10 years.
The American Soybean Association (ASA) has consistently said that farmers are willing to do their part to help address the United States' fiscal situation, but that cuts to ag spending and programs should be proportionate to agriculture's size of the budget — less than 1 percent — and that the changes come through the Senate and House Agriculture Committees.
The Joint Committee formed under the agreement that is charged with making recommendations on how to achieve the $1.2 to $1.5 trillion in deficit reduction will likely not give the Agriculture Committees a targeted savings number, rather the Agriculture Committees will need to make recommendations (about how much and where to cut) to the Joint Committee by Oct. 14. ASA will be working with the House and Senate to help them put recommendations together.
ASA will be working on its recommendations over the coming weeks, but believes the crop insurance program that allows farmers to manage risk is one that it must fight to protect.
ASA also needs to protect market development programs that help U.S. soybean farmers send 50 percent of their crop overseas, investments in the future through ag research, and conservation programs for working lands that provide cost-share assistance to farmers and livestock producers to help them comply with environmental rules and goals.
The recommendations made by the Agriculture Committees to the Joint Committee could be accompanied by legislative language to implement them, and there is speculation that this language could very well become the new farm bill.
The Joint Committee proposal/legislation must be approved by the 12 member Committee by Nov. 23.
If the Joint Committee reaches agreement, the legislation they produce is un-amendable and subject to a simple majority vote by both chambers — that vote must occur by Dec. 23. Failure to produce the legislation will automatically trigger cuts or sequestration of $1.2 trillion, half from defense and half from non-defense spending.