His proposal calls for an 8 per cent ag spending reduction
By Diego Flammini
President Trump’s next budget is calling for reduced spending within the United States Department of Agriculture (USDA).
The president’s 2021 budget proposal, “A Budget For America’s Future,” requests US$21.8 billion in discretionary spending (spending implemented through an appropriations bill) for the USDA. That figure would represent a US$1.9-billion, or 8 per cent decrease from 2020’s figure of US$23.8 billion.
The USDA’s mandatory spending (spending that’s mandated by law) is estimated to be US$128 billion, up from US$125 billion in 2020.
Some of the proposed cuts could come at the expense of the federal crop insurance program.
The U.S. government currently provides farmers with about 62 per cent of their crop insurance premiums. President Trump’s budget calls for that number to be dropped to 48 per cent.
Limiting those premiums would save the government more than US$21 billion by 2030, the budget estimates.
The budget also proposed limiting commodity payments for farmers with an adjusted gross income (AGI) of less than US$500,000 and eliminating subsidies for farmers with AGIs over US$500,000.
“It is hard to justify to taxpayers why the government should provide assistance to farmers with incomes over half a million dollars,” the budget states. “Doing so undermines the credibility and purpose of farm programs.”
Crop insurance organizations are unhappy with the president’s proposal.
Farmers need crop insurance to get through tough times, so targeting such an important program is a confusing move.
“It’s inexplicable as to why the (Office of Management and Budget) would target such a critical risk-management tool for budget cuts,” a Feb. 10 joint statement by six crop insurers including the American Association of Crop Insurers said. “The proposed cuts will make crop insurance unaffordable and unavailable for farmers, seriously undermining the farm safety net.”
In addition, the budget calls for cuts to the Section 32 program in which the federal government purchases domestic ag commodities for distribution through various channels like nutrition assistance.
The president’s budget is proposing a US$415-million cut to the program in 2021 and further cuts for a savings of more than US$5 billion by 2030.
“This proposal would increase transparency by providing mandatory appropriations in lieu of customs receipts, thereby reducing the variability from fluctuating receipts and providing funding for all programmatic needs,” the budget says.
Other USDA budget highlights include:
- US$200 million for the Foreign Agricultural Service to reduce trade barriers for U.S. ag products
- US$3.3 billion to support ag research
- US$1.036 billion to protect the industry from pests and diseases
Farms.com has reached out to American farm organizations for comment.