Proposed USDA Budget Hits Ag Hard

Dairy Herd Management reported President Barack Obama’s suggested federal budget proposal this week, stating agriculture, though carrying a trillion dollar price tag, took a huge hit. The total suggested budget is estimated to save $10 billion over 10 years.

In the proposed budget for 2011, Obama suggested a drastic reduction in income that qualifies for crop supports, implemented over a three-year period. The move would save $2.26 billion over 10 years.

An estimated $8 billion would be saved over 10 years by ending “huge windfall profits” of crop subsidies by reforming the administration of the federally subsidized crop insurance system. The Agriculture Department is negotiating a new agreement with insurers that would reduce overhead payments.

Crop subsidies would disappear for people earning more than $250,000 adjusted gross income from off-farm source or more than $500,000 on-farm AGI. Those caps are currently set at $500,000 off-farm AGI and $750,000 on-farm AGI.

The budget also included a request for a 25 percent cut to $1.2 billion, of the Environmental Quality Incentives Program.

“Despite the administration’s rhetorical desire to support conservation and agriculture, and address such issues as climate change and renewable energy, “reductions of over one-half a billion dollars in mandatory conservation program spending will make it much more difficult for farmers and ranchers to make changes necessary to protect our air, land and water,” said Jon Scholl, America Farmland Trust president.

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