The last several days have provided some big "announcements" for the ag economy and the entire industry. On February 11, 2011, United States Department of Agriculture (USDA) Secretary Tom Vilsack announced that U.S. farm exports reached an all-time high of $115.8 billion in calendar year 2010. This was up nearly $1 billion from the previous year's record, and, for the first time, China emerged as the top market for U.S. agricultural exports with $17.5 billion in sales.
Then, on February 14, 2011, Secretary Vilsack released the projections for 2011 farm income. Net cash income for all of U.S. agriculture is expected to reach $98.6 billion in 2011, up $7.3 billion (or 8 percent) from 2010 and $26.8 billion above its 10-year average of $71.8 billion. Strong demand for food around the world and near-record commodity prices contribute to this especially rosy outlook.
That same day, President Obama unveiled his budget proposal for 2012. For perspective, USDA’s budget authority is approximately $145 billion of the $3.7 trillion proposed by the President for the entire federal government. USDA's budget proposed $2 billion in cuts to its discretionary spending ($24 billion). With the backdrop of a healthy and vibrant farm economy now well in place, the Administration proposed cuts in agriculture programs to the wealthiest farmers. Specifically, the proposals called for limits on direct payments to farmers and further tightening of income limits for farm program payments. According to the Secretary, this would save $2.5 billion over 10 years, while only affecting 2 percent of participants. Seems to make sense if the free market is treating agriculture as well as it is, right?
But most of our "agricultural" spending, both in the USDA budget and in Farm Bill programs, is not on agricultural production or "farm" programs. Today, approximately 70 percent of the USDA budget - as well as Farm Bill monies - goes to food and nutrition programs. The 2012 USDA budget proposed increases in spending to strengthen nutrition assistance for millions of Americans, including the Women, Infants and Children (WIC) program, which supports 9.6 million low-income, nutritionally at-risk pregnant and post-partum women, infants and children up to age five. The Budget also supports the Supplemental Nutrition Assistance Program (SNAP), which touches more than 45 million lives. The budget proposes to suspend the benefit time limits for certain working-age adults for an additional fiscal year, and it provides $35 million for the Healthy Food Financing Initiative to bring grocery stores and other healthy food retailers to underserved communities. These are unarguably valuable programs that provide much needed services to a growing number of Americans.
The cuts, however, being proposed by political leaders to discretionary programs are simply "nickel and dime" approaches to very serious problems. According to the Congressional Budget Office, the commodity/farm program payments to farmers will amount to just 0.15 percent of all federal spending over the next ten years. Indeed, every area of spending should be scrutinized and cuts should be made in efficient or outdated programs, regardless of their scope or size. But until there is a commitment to reform and reductions in our mandatory program spending, including food and nutrition programs in the agriculture budget, and more importantly, Medicare/Medicaid, social security and defense spending in the federal budget, we're simply kicking the can further down the road.
Then, on February 14, 2011, Secretary Vilsack released the projections for 2011 farm income. Net cash income for all of U.S. agriculture is expected to reach $98.6 billion in 2011, up $7.3 billion (or 8 percent) from 2010 and $26.8 billion above its 10-year average of $71.8 billion. Strong demand for food around the world and near-record commodity prices contribute to this especially rosy outlook.
That same day, President Obama unveiled his budget proposal for 2012. For perspective, USDA’s budget authority is approximately $145 billion of the $3.7 trillion proposed by the President for the entire federal government. USDA's budget proposed $2 billion in cuts to its discretionary spending ($24 billion). With the backdrop of a healthy and vibrant farm economy now well in place, the Administration proposed cuts in agriculture programs to the wealthiest farmers. Specifically, the proposals called for limits on direct payments to farmers and further tightening of income limits for farm program payments. According to the Secretary, this would save $2.5 billion over 10 years, while only affecting 2 percent of participants. Seems to make sense if the free market is treating agriculture as well as it is, right?
But most of our "agricultural" spending, both in the USDA budget and in Farm Bill programs, is not on agricultural production or "farm" programs. Today, approximately 70 percent of the USDA budget - as well as Farm Bill monies - goes to food and nutrition programs. The 2012 USDA budget proposed increases in spending to strengthen nutrition assistance for millions of Americans, including the Women, Infants and Children (WIC) program, which supports 9.6 million low-income, nutritionally at-risk pregnant and post-partum women, infants and children up to age five. The Budget also supports the Supplemental Nutrition Assistance Program (SNAP), which touches more than 45 million lives. The budget proposes to suspend the benefit time limits for certain working-age adults for an additional fiscal year, and it provides $35 million for the Healthy Food Financing Initiative to bring grocery stores and other healthy food retailers to underserved communities. These are unarguably valuable programs that provide much needed services to a growing number of Americans.
The cuts, however, being proposed by political leaders to discretionary programs are simply "nickel and dime" approaches to very serious problems. According to the Congressional Budget Office, the commodity/farm program payments to farmers will amount to just 0.15 percent of all federal spending over the next ten years. Indeed, every area of spending should be scrutinized and cuts should be made in efficient or outdated programs, regardless of their scope or size. But until there is a commitment to reform and reductions in our mandatory program spending, including food and nutrition programs in the agriculture budget, and more importantly, Medicare/Medicaid, social security and defense spending in the federal budget, we're simply kicking the can further down the road.
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