NSAC's Blog
Deficit Commission Proposes $3 Billion in Cuts to Farm Subsidies, CSP
November 11, 2010
Yesterday, the two co-chairs of the National Commission on Fiscal Responsibility and Reform, an 18-member bipartisan panel commissioned by President Obama in February 2010, released a draft plan to slow the growth of the federal budget deficit.
As expected, the “trial balloon” report offers a contradictory set of recommendations; the commission’s chairs for instance propose reducing individual and corporate tax rates while also increasing the standard retirement age for Social Security and ending tax deductions for mortgages and student loans.
The draft plan calls for $3 billion in annual cuts to “farm subsidies,” loosely described as “direct payments and other subsidies, Conservation Security funding, and funding for the Market Access Plan.” Unfortunately for conservation advocates, the authors appear to conflate production subsidies with conservation incentives.
While the commission’s report is non-binding, NSAC hopes that the final draft will focus on closing payment rule loopholes and lowering per-farm payment caps, thereby ending the current practice of sending hundreds of thousands of dollars each year in payments to individual mega farms. Similar rules should be applied to crop insurance subsidies, while receipt of all production and insurance subsidies should be linked to implementation of basic soil and water conservation.
Rather than being scaled back, programs that support environmental and conservation practices on working farm and ranch land, like the Conservation Stewardship Program, should be the template for a leaner, public benefit-oriented farm program in the future.
(Note: We assume the commissioners really meant to say Conservation Stewardship Program, not Conservation Security Program. To obtain savings from the Security program (or from recent Stewardship program enrollments), the government would have to be willing to break long-term contracts they have signed with farmers in earlier years. The obvious mistake in the name of the program, though, may also be a sign of how little thought went into the development of the recommendation.)
Other commission recommendations with relevance to agriculture and rural development include:
- Requiring food processing facilities to finance all federal inspections of meat and poultry products through inspection fees; these services currently cost over $900 million annually.
- Eliminating the Economic Development Administration and combining the Small Business Administration with the Department of Commerce.
- Eliminating a number of programs administered by the Rural Utility Service – the only one specifically mentioned is the Local Television Loan Program, but others help provide electricity, telephone, water and waste disposal services in rural areas.
- Reducing federal and state land acquisition through cutting funding for the Land and Water Conservation Fund (LWCF).
- Eliminating subsidies to regional rural development agencies, including the Appalachian Regional Commission and the Delta Regional Authority. These agencies provide grants to support economic development in their regions, including a number of agricultural development grants.
Categories: Budget and Appropriations, Conservation, Energy & Environment, Farm Bill, Rural Development
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