MOOSE JAW, Sask. — The United States’ $1 trillion budget deficit will affect the size of its next farm bill, says an American agricultural economist.
Agricultural spending is an easy target, even though it is less than one percent of the federal budget, said Flynn Adcock, assistant director of the Centre for North American Studies at Texas A & M University.
Sixty-three percent of the overall proposed 2012 budget is mandatory or entitlements such as social security, Adcock said.
“You can’t really touch those without getting in severe political trouble,” he said.
Spending on security and the military accounts for 24 percent of the budget.
The remaining 13 percent includes departmental operations and items such as highways.
Adcock said high commodity prices have lowered farm program payments in recent years, reducing the baseline of what is available for agriculture.
Politics will also be at play in 2012.
There are 23 new members on the House of Representatives agriculture committee, with not a lot of experience in policy issues.
House budget chair Paul Ryan has said he would like to see the baseline $763 billion agriculture budget cut by $177 billion. Adcock said farmers’ interests are protected somewhat by two senators from each state, but their influence may be waning.
He said most farmers would like to extend the existing farm bill for another five years, but that probably won’t happen.
A & M professor Parr Rosson said some legislators view high prices as a sign that agriculture doesn’t need continued spending.
“The perception that high prices mean a prosperous farm sector is a dangerous view to have,” he said.
Agricultural loans are at high risk compared to 2007, he said.
And while some farm payments allocated in the farm bill are declining, others are not.
William Meyers of the University of Missouri’s food and agricultural policy research institute, said crop insurance costs are growing.
Net indemnities have climbed from $1.84 to $4.97 billion.
He said rice and cotton producers rely on programs such as the marketing loan and counter cyclical payments, but corn, soybean and wheat producers rely more on crop insurance.
Conference organizer Andy Schmitz said the issue has become one for consumers, particularly low income consumers, because food stamps and school lunch programs make up the largest expense in the agriculture budget.
