Agriculture interests feel safe from big 2011 cuts, worry about 2012

Agricultural lobbyists are increasingly worried that Democrats will target federal farm subsidies as a way to reduce the deficit.

Lobbyists expressed concern this week after Senate Majority Leader Harry Reid (D-Nev.) signaled Democrats would look at farm subsidies during talks with Republicans over spending cuts for the rest of the fiscal year. 

“Not all the money [for cuts] has to come from what they’ve identified,” Reid said of the House-passed spending bill. “There are many other mandatories that we can look at. Commodity price for farms, farm products have never been … never been higher than they are today. There’s money there,” Reid said.

{mosads}The payments to growers are mandated under the five-year farm bill that was passed by Congress in 2008.

One lobbyist said Reid ‘”doesn’t know what he is talking about” when it comes to finding money for 2011 cuts in the farm programs.

The lobbyist said direct payments to farmers have already been made for the year, so they could not be scored as spending cuts in a continuing resolution funding the government for the rest of fiscal 2011. The lobbyist also noted that counter cyclical payments to farmers — which guarantee a set price for commodities — are not being made since crop prices are high. 

Given those facts, the lobbyist said that Reid’s statements do not raise much of a risk of major cuts in 2011.

The fiscal 2012 budget could be a different story, however.

Cuts to the farm bill programs could be included in a budget resolution reconciliation bill for 2012, and it would be difficult for farm-state senators to filibuster the cuts under Senate rules.

Other lobbyists said they are worried Reid’s statements may mean the Senate will be more likely to agree to the 22 percent cut in discretionary agriculture spending that the House approved in its 2011 spending bill. 

Those cuts affect programs such as federal agricultural research, rather than payments to farmers.

 “We certainly appreciate the need for reducing the federal deficit, but the numbers show there is just no way to balance the enormous federal budget with cuts to agriculture spending,” said Dana Peterson, chief executive officer of the National Association of Wheat Growers, in an e-mailed statement Friday.

“The multitude of programs that support agriculture constitute only 2 percent of discretionary and 2 percent of mandatory spending — and more than 70 percent of those dollars go to support our nation’s food and nutrition assistance programs,” Peterson said. “The money just simply is not there to make a meaningful impact on the deficit.”

In a March 5 meeting in Tampa, the National Corn Growers Association, American Soybean Association, National Sorghum Producers and National Association of Wheat Growers adopted a unified message on the 2011 and 2012 budget battles.

Their statement notes that the USDA has already renegotiated an agreement with crop insurers saving $6 billion, with $4 billion of the savings going for deficit reduction.

“We believe any further reduction in discretionary spending should recognize and reflect this contribution. We would also note that agriculture-related programs represent less than one-half of one percent of the federal budget,” the groups stated.

“Looking forward, we believe any meaningful approach to deficit and debt reduction in the FY2012 budget must encompass all entitlement programs and all discretionary spending,” they said.

One lobbyist said that not all commodity groups are united in backing some cuts to the farm budget. The source said some cotton and peanut growers are advocating no cuts at all to farm programs under a take-no-prisoners approach.