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Farm agencies assess impact of budget cuts

Issue Date: April 20, 2011
By Christine Souza

Following passage of an agreement to trim the federal budget and keep the government operating until the end of September, officials who operate the programs and services used by farmers and ranchers say they're still trying to figure out how the cuts will translate at farm level.

President Obama signed a bill authorizing $38.5 billion in spending reductions for the current fiscal year.

That's "a small share of the overall federal budget," said Josh Rolph of the California Farm Bureau Federation National Affairs and Research Division.

"Though this is not a sizable cut, it is still a cut and will affect agriculture because of the programs it will ultimately hit," Rolph said. "USDA, for example, is grappling with the challenge of how to change programs mid-year to go along with the cuts."

The resolution negotiated by lawmakers and the administration includes $3 billion in reductions to various agricultural programs, including nutrition programs. A U.S. Department of Agriculture official told Ag Alert® last week that the agency is still trying to decipher what the recent budget cuts mean for the nation's farmers and ranchers. The official, who spoke on condition of anonymity, said USDA hopes to have a better idea this week of which specific programs are taking a hit.

"Some of the mandatory cuts will result in shrinking baselines for future negotiations such as for next year's federal budget and the 2012 Farm Bill. Even though in some cases not all the mandatory money was going to be spent, now we head into a shrinking baseline with less money to spend overall in the years ahead for wetlands and other conservation programs, for example. But, what's really significant is that this is the start of what will be a repeated and concerted effort to pare back government spending in the next (2012) fiscal budget as well as the next farm bill debate," the official said.

Of interest to California are cuts to conservation programs such as those affecting the Natural Resources Conservation Service, including the Environmental Quality Incentives Program, which was reduced by $350 million, relative to the level provided in the 2008 Farm Bill.

"The authorized level for EQIP in fiscal year 2011 was $1.6 billion, so the money that remains is $1.2 billion, still more than was spent in the previous year," said Elisa Noble, CFBF director of livestock, public lands and natural resources. "These cuts are unfortunate as conservation programs—EQIP, in particular—have some of the most efficient types of funding, with landowners often contributing a 50 percent cost share for projects and practices that improve the farm operation as well as produce an environmental benefit for the public."

Other reductions in conservation include: $119 million from the Wetlands Reserve Program; $39 million from the Conservation Stewardship Program; and $134 million from the Biomass Crop Assistance Program.

The bill also lists the following cuts to USDA:

• $500 million from the Women, Infants, Children food program

• $207 million from Rural Economic Development funds

• $165 million from watershed rehabilitation programs

• $126 million from the National Institute for Food and Agriculture

• $44 million from the Agricultural Research Service

• $41 million from the Animal and Plant Health Inspection Service

• $41 million from the Fruit and Vegetable Nutrition Program

• $10 million from the Food Safety and Inspection Service, leaving enough funds to allow for uninterrupted meat, poultry and egg inspections.

Also of interest is a $1.6 billion or 16 percent reduction in funding for the U.S. Environmental Protection Agency. Much of that was for climate change studies, energy efficiency and renewables programs, and environmental clean-up.

The Food and Drug Administration came out ahead, with an additional $107 million this year. The Department of the Interior is slated to receive $2.6 billion less than fiscal year 2010 and the Department of Homeland Security will receive $784 million less than last fiscal year.

The budget settlement also led to the removal of Endangered Species Act protection for grey wolves in the western United States, and a funding moratorium on pending federal land designations. The two measures were among a few "amendment riders" that survived the final agreement, Noble said.

Western ranchers had sought the wolves' de-listing due to increasing wolf numbers and resulting livestock losses; elk and other large wildlife were also suffering losses. The lands measure would prevent the Interior Department from spending any money to implement a new "wild lands" policy, which would have limited natural resource management such as livestock grazing and timber harvesting.

In another spending reduction, the U.S. Department of Transportation eliminated new funding for high-speed rail and rescinded $400 million in previous-year funds.

Jeffrey Barker, deputy director of the California High-Speed Rail Authority, said none of the money the authority has received so far is affected.

Assessing the budget situation as a whole, Ted Reimers, a vice president of American AgCredit in Turlock who served on the American Farm Bureau Federation Federal Deficit Task Force, said the problem will not be solved until Congress and the administration confront entitlements such as Social Security, Medicare and Medicaid.

"Cutting $38.5 billion is only cutting 2.75 percent of the annual deficit—a drop in the bucket," Reimers said.

(Christine Souza is an assistant editor of Ag Alert. She may be contacted at csouza@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.




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