Agriculture Spending and the Debt Ceiling Negotiations

The Congress and the President have raised the debt ceiling, which restricts the speed at which expenditures can increase. So how was agriculture treated in the agreement?

If the objective of a farm lobbyist was to keep agriculture out of the agreement, they were successful. The agreement does not include the words like agriculture, farm, farm policy, biofuel, ethanol, direct payment or any of the language that you would expect.

The other shoe will fall in mid-August, when the House and Senate will appoint 12 of their members to a special committee to determine how to remove another trillion dollars from the budget over the next 10 years.

The current attitude in Washington is that agriculture is doing very well, and the U.S. Department of Agriculture (USDA) is a wealthy unit of government where savings could occur. With USDA's $100+ billion budget, the initial target will be direct payments and similar farm safety-net programs. However, 75 percent of the USDA budget is in the food assistance programs, and those have recently appeared to be vulnerable to sizeable cuts. When the Supplemental Nutrition Assistance Program (food stamp) is cut, that will be long after commodity support programs have been discarded, along with conservation funding, biofuel support programs, agriculture research and rural development funding.

In summary, the debt ceiling negotiations have successfully avoided a governmental default, but in doing so everyone agreed to curtail spending increases, so there has been no specific impact on agriculture. However, a special committee will soon begin work to cut the budget, and that will bring an expected impact on the USDA budget, from commodity support programs, conservation, agriculture research and even food assistance programs.

Reprinted in part from Drovers.com