WASHINGTON, D.C. (Reuters) – The U.S. House of Representatives budget committee chair has proposed slashing farm spending by $30 billion over 10 years.
The proposal is part of a package unveiled April 5 as part of Republican Paul Ryan’s controversial plan to tackle the giant federal budget deficit.
He called for a reduction in the $5 billion a year direct payments made to growers regardless of need. The payments are based on past production of grain, cotton and soybeans.
“Second, reform the open-ended nature of the government’s support for crop insurance, so that agricultural producers assume the same kind of responsibility for managing risk that other businesses do,” said the budget committee proposal, promoted by Ryan. “These reforms will save taxpayers nearly $30 billion over the next decade.”
Read Also
Phosphate prices to remain high
Phosphate prices are expected to remain elevated, according to Mosaic’s president.
Overall, Ryan proposed nearly $6 trillion in savings over the next decade, with huge cuts in Medicare and Medicaid programs.
He unveiled his plan while House Republican leaders and the White House fought over spending cuts for this year.
The cuts in farm subsidies and crop insurance would equal 20 percent of projected spending on those two programs, according to Congressional Budget Office figures.
They would not take effect until an overhaul of U.S. farm law is completed, scheduled for next year. That will give the agriculture committee flexibility in writing the new farm law, said the budget committee.
Agriculture committee chair Frank Lucas said the budget proposals are only suggestions.
“At the end of the day, members of the House agriculture committee and I will write the next farm bill,” said Lucas.
Farmers are enjoying boom times, which the budget committee proposal said is an ideal moment for reform of “numerous overlapping” farm supports.
Direct payments, created by the 1996 Freedom to Farm law, are a popular target for deficit hawks, reformers and farm activists. Farm groups have suggested moving the money into revenue assurance programs.
Payments by the government to farmers amount to 10 percent of net cash farm income, which is a U.S. Department of Agriculture gauge of solvency.
A farm lobbyist said public nutrition programs such as food stamps, which make up nearly two-thirds of the USDA budget, would face cuts of 20 percent, and land stewardship would be cut by 25 percent.
Food stamps would receive the same types of reforms as welfare did a decade ago, said the budget committee, such as “encouraging work, limiting the duration of benefits and giving states more control over the money being spent.”
Food stamps, formally named the Supplemental Nutrition Assistance Program, are forecast to cost $80 billion this year. Enrollment is a record 44.2 million people, or one in seven Americans.
