Obama Agriculture Budget Proposals More of Same

May 8, 2009 Bookmark and Share

The Obama Administration released long-awaited budget details Thursday reflecting little change to agriculture proposals despite significant criticism from industry and Members of Congress.

The Administration’s proposals called for:

  • imposing a hard payment limit cap of $250,000.
  • phasing out direct payments to farmers with annual sales revenue above $500,000.
  • reducing Market Access Program funding by 20 percent.
  • reducing crop insurance premium subsidies by five percentage points on all coverage levels.
  • increasing the government’s share of crop insurance underwriting gains to 20 percent from 5 percent.
  • changing the way premiums for CAT coverage are calculated.
  • eliminating any new funding for Agricultural Research Service buildings in 2010 and canceling balances for previously approved facility construction.
  • terminating the Resource Conservation and Development program.
  • terminating the Watershed and Flood Prevention Operations program.

These proposals largely mirrored proposals released in late February, which garnered extremely negative reactions from key Members of Congress and agricultural associations.

At that time, NAWG and other groups meeting at Commodity Classic issued a joint statement emphasizing that the 2008 Farm Bill should not be reopened for modifications until it expires in 2012 (accessible in full here).

NAWG has since engaged in frequent conversations with Members and Administration officials about the negative effects these proposals could have on agricultural producers and operations. NAWG and other ag groups have also frequently joined together to state official opposition to individual proposals; for instance, last week, NAWG, U.S. Wheat Associates and 120 other groups wrote the White House to reiterate the importance of MAP funding (full letter at www.wheatworld.org/issues/trade).

Leaders in Congress, the body that ultimately appropriates funds, have also proved unreceptive to the Administration proposals. Agriculture and budget committees in both chambers rejected the proposals while writing the budget resolution that will guide FY2010 appropriations, which was finalized last week. Perhaps the most colorful reaction from the Hill to these ideas came from House Agriculture Committee Chairman Collin Peterson (D-Minn.), who called the ideas “more than dead on arrival”.

NAWG will continue to follow the budgeting and appropriations process and assert the priorities of the wheat industry, including the preservation of the direct payment and crop insurance programs, full funding for MAP and the importance of research.

Department-by-department breakdowns of the Obama budget proposals are accessible at http://www.whitehouse.gov/omb/budget/Appendix/

Details on proposed terminations and reductions are at http://www.whitehouse.gov/omb/budget/fy2010/assets/trs.pdf