NSAC Comments on Obama Budget

For Immediate Release
February 1, 2010

Contact: Ferd Hoefner

NSAC Comments on Obama Agriculture Budget

Comments of Ferd Hoefner, NSAC Policy Director:

The Obama Administration budget for food and agriculture is a mixed bag.

In the dreadful category, the President proposes to turn his back on the widely acclaimed 2008 Farm Bill deal to ramp up support for farmers and ranchers investing in natural resource conservation and environmental enhancement.

Obama is asking Congress to whack over $500 million in the short term and over $1 billion long term from the mandatory funding for farm conservation programs in the 2008 Farm Bill.

The conservation cuts include $380 million from the Environmental Quality Incentives Program (EQIP); 770,000 acres or $70 million (and $700 million over ten years) from the Conservation Stewardship Program (CSP); over 15,000 acres or $35 million from the Wetlands Reserve Program (WRP); $15 million from the Farm and Ranch Land Protection Program (FRPP); $12 million from the Wildlife Habitat Incentives Program (WHIP), and additional amounts from the Grasslands Reserve (short and long term), and other conservation programs.

The silver lining for NSAC is that Congressional appropriators rejected proposed cuts to mandatory farm bill funding for conservation programs the past two years, with the exception of a $270 million EQIP cut, and we urge them to reject this new proposal in exactly the same fashion.  Now is not the time to turn our backs on environmental improvement on the 50 percent of the continental U.S. that is agricultural land.

Turning his back on his campaign promises to fully back the new Conservation Stewardship Program, the budget President Obama submitted today proposes to start chipping away at contracts between USDA and farmers to comprehensively improve soil and water quality, use climate-friendly farming systems, improve wildlife habitat, and reduce water and energy consumption.

At his confirmation hearing, USDA Secretary Tom Vilsick had this to say about the CSP: “I recognize that this is not only an opportunity to expand income opportunities for producers but it is also great for the environment, and for water quality in particular, and it also provides jobs, rural jobs… (T)his is a job creator, it’s great for the environment, and it’s an income opportunity for marginal land.  I’m very supportive of this.”

For her part, Deputy Secretary Kathleen Merrigan at her confirmation hearing called the CSP “a jewel among many wonderful USDA programs. What I like about CSP…is that it recognizes farmers as environmental stewards and rewards their contributions to healthy food, land, water, and wildlife.”

We agree with the sentiments of then candidate Obama and the then Secretary and Deputy Secretary nominees.  We strongly suspect that Congress will reject this ill-advised cut to the only comprehensive working-lands conservation program in the country.

We support the proposed cut to the per-farm cap for commodity program direct payments from $80,000 a year (married couple) to $60,000 a year, though such a change would obviously require new legislation.  The proposed change to reduce the Adjusted Gross Income (AGI) caps, however, leaves us scratching our heads.

Reducing the means-test for receiving commodity production subsidies to $250,000 ($500,000 for married couples) in non-farm income is a noble sentiment, but an ineffective policy.  If it were to become law, the most immediate effects would be negative – encouraging crop share landlords to switch to cash rents (and thus avoid the cap) and encouraging investors to plow back subsidies into more land and equipment (and thus reduce AGI).  Ironically, both would increase farm consolidation.

The irony is further heightened by the President’s decision earlier this month to issue a final rule on commodity program payment limitation law in which he did a complete about face on his campaign promise to close the regulatory loopholes that allow mega farms to collect hundreds of thousands of dollars a year in subsidy checks.  Unlike the new, ineffectual AGI proposal which would require Congressional approval and take several years to implement, the payment limit final rule required only the President’s sign off to effectively and immediately halt farm subsidy abuse.

On the plus side, sustainable agriculture farmers and researchers are cheering the near 50 percent increase proposed by the President for the Sustainable Agriculture Research and Education (SARE) competitive grants program.  The $30 million proposed for SARE in FY 11 represents the largest proposed increase in the 22 year history of the program.  Most of the increase would help fund a federal-state matching grant program to build long-term sustainability into state and land grant university agricultural programs.  Winning congressional passage of the long overdue increase will be a priority of the sustainable agriculture community.

Two new proposals in the USDA budget sound promising and the local and regional food system farm and business community will be anxiously awaiting further details as they emerge.

One would build on a NSAC proposal included in the 2008 Farm Bill to set-aside 5 percent of Rural Business and Industry loans for local and regional food system enterprise development.  The President’s new proposal would set-aside up to 5 percent of a wide range of rural development, marketing, and conservation programs for projects in areas in which strategic regional planning is building a stronger rural economic foundation, including the redevelopment of local and regional food and agricultural systems.

The other is a proposed $35 million for a Healthy Food Financing Initiative that would provide loans for new grocery stores to increase access to healthy foods in urban and rural food “deserts.”  That proposal would also target an additional $15 million from other marketing and rural development programs to support the initiative.