The countdown has started.
The sequester budget cuts are now less than a week away, and there are few signs that Congress and the Administration will be able to agree on a compromise to avert those cuts. The cuts total $85 billion for the rest of fiscal 2013 and are split between defense and non-defense spending.
A few programs, such as Social Security and the SNAP program (food stamps) are exempt from the cuts. USDA will also honor “contractual” obligations, such as CRP payments.
USDA Secretary Vilsack has said the sequester cuts would mean furloughs for some employees, including some food safety inspectors. The cuts may still be avoided, but compromise must happen soon.
Senate Democrats have floated a plan targeting ag spending for cuts.
Direct payments to farmers would be eliminated according to the plan, which includes some additional revenue (tax hikes). Then, according to Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., agriculture would be exempt from any new round of sequestration cuts.
House Agriculture Committee Chairman Frank Lucas, R-Okla., is strongly opposed to the Senate proposal.
He says “That’s the resource base we need to use to craft the next farm bill in 2013. I don’t know what we have left to write a farm bill with this summer."
Without his support, the Senate plan has little chance in the House. Attorneys have not yet ruled on how the counter-cyclical and ACRE program contracts will be treated under the sequestration cuts.
Seeing these programs as similar to CRP, Chairman Lucas says he doesn’t see how USDA could reneg e on these contracts either and he encourages farmers to sign up for them before Mar. 1.
The sequester kicks in on Mar. 1 unless some compromise is reached.
Despite the looming budget cuts, USDA will hold a four-week open signup period for the Conservation Reserve Program (CRP). Agriculture Secretary Vilsack announced that tracts covering about 3.3 million acres of land in the CRP expire at the end of September and USDA will accept bids for CRP enrollment from May 20 to June 14 this spring.
About 2.5 million acres of land came out of the CRP in 2012 and the current enrollment in the program totals 27 million acres.
Four Senators introduced legislation that would cap farm payments and close loopholes in farm payment programs.
The bill was introduced by Senators Grassley, R-Iowa, Johnson, D-S.D., Enzi, R-Wyo., and Brown, D-Ohio. The legislation would establish a per farm cap of $50,000 on all commodity prog ram benefits, except those associated with the marketing loan program.
Payments under the marketing loan programs would be capped at $125,000 for an individual; $250,000 for a married couple.
The bill would also make it more difficult for non-farmers to qualify for federal farm payments.