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Federal Sequester Will Probably Reduce CRP & DCP Payments

September 30, 2013 By Ron Sylvester Leave a Comment

According to the Coshocton Farm Service Agency’s latest enewsletter, federal sequestration – the across the board spending cuts affecting all agencies – will likely reduce payments for certain FSA programs.

It is expected that Fiscal Year 2013 benefits issued under both the Direct & Counter-cyclical Payment (DCP) program and the Conservation Reserve Program (CRP) will be reduced. While the final reduction percentage has not been officially announced, benefits are expected to be reduced by around 5.1%.

The payment process normally begins for both these programs in the early part of October each year. Please be prepared for a possible delay in benefits that may occur due to program funding issues and/or staffing shortages.

Filed Under: Blog Tagged With: Sequestration

White House: Sequestration’s impact on Ohio

March 4, 2013 By Ron Sylvester Leave a Comment

The automatic across-the-board cuts known as “sequestration” began on March1 and the White House wants you to know how these cuts will hurt Ohio.

Sequestration is the fallout from the 2011 deal between Congress and President Barack Obama to increase the nation’s debt ceiling. At that time and since, leaders from both parties have admitted that sequestration is bad policy because it cuts all domestic programs except for Social Security, Medicare, Medicaid and veteran’s programs. The thinking was when it was passed that these cuts were so egregious that sequestration would be repealed and replaced with reasoned, balanced deal to cut the deficit. Partisanship in Washington remains more important than progress and it wasn’t repealed let alone replaced.

These cuts will be a slow burn and most Americans won’t notice any changes for weeks or months. For instance, most of the 26,000 civilian Defense Dept. employees in Ohio who will be put on ten to 20 day furloughs must be given a minimum of 30 days notice before being furloughed.

The White House issued a memo one week ago which outlines some of the fallout specific to Ohio. Among the cuts expected are:

  • $161 million in pay for those civilian Dept. of Defense employees in the state removed from the economy due to furloughs
  • 4,700 low income families will lose rental housing vouchers
  • $25 million in lost funding for K-12 public education
  • $22 million in lost funding for public school instruction of disabled kids
  • 1,450 fewer work study jobs for Ohio college students

In the last newsletter we reported that Senate Democrats were offering up USDA guaranteed payments as part of a replacement deal for the sequester. That bill is going nowhere for now. Republicans are dug in that there will be no further tax increases as part of a better deal. Both that Senate bill and a proposal the president has floated include closing certain tax loopholes affecting the wealthy and large, profitable corporations. The GOP is calling such tax reforms “increasing taxes” for now. The stalemate continues. The military and most vulnerable pay.

Filed Under: Blog Tagged With: Congress, Ohio, Sequestration

Senate Dems bill to prevent automatic budget cuts relies heavily on cutting direct payments

February 16, 2013 By Ron Sylvester Leave a Comment

HarryReidU.S. Senate Majority Leader Sen. Harry Reid, (D-NV), announced late last week that Democrats will offer a $110 billion proposal to avert so-called sequestration cuts on March 1.

The sequester is a package of drastic, across the board cuts to domestic programs including defense that was passed during the debt ceiling fiasco of 2011. Sequestration was designed to play out over ten years with the first cuts coming on Jan. 1. That deadline was pushed back by the early January fiscal cliff deal. Congress has not been able since then to address these automatic cuts. With the March deadline looming, Senate Democrats are proposing to nullify this year’s cuts and put in their place a balanced package of targeted cuts and tax increases on wealthy Americans.

Here’s where it gets interesting for agriculture and potentially for the future of the Farm Bill. According to Politico, $27.5 billion of Reid’s plan would come by cutting the direct payments under the USDA:

About $31 billion would be saved by cutting direct cash payments to producers — a system that is widely criticized at a time of high farm income. And to win support from Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.), the bill reallocates about $3.5 billion of these savings to extend farm programs left hanging by the White House and Senate Republicans in the New Year’s tax deal.

Although the $3.5 billion in funding for conservation and other programs not currently funded due to the lack of a Farm Bill would be nice, there are some questions that come to mind by dealing with the direct payments issue outside of a comprehensive, federal Farm Bill.

First, it should be noted that most actual farmers and ranchers have wanted to see the direct payments system go away or wholesale reformed for a long time. There have been Hollywood celebrities, real estate speculators and other non-farmers who have collected payments because they own land – that’s not why the payments were originally created. These payments are a part of a larger safety net for agriculture ensuring that farmers produce during the lean times as well as times like those we’re living through now. (Unless you’ve been affected by drought or other natural disaster.) In the bipartisan, Senate-passed bill last year, direct payments were replaced with a revamped crop insurance program. Does the current Democratic proposal contain the crop insurance provisions? We’ll be watching.

Second is the Farm Bill itself. Farm bills have never been easy for Congress – regional conflicts erupt over this program or that program – but they’ve always gotten done. One reason is the nutrition title which includes the Supplemental Nutrition Assistance Program (food stamps) and school nutrition provisions. The nutrition title doesn’t just bring rural and urban/suburban America together because of SNAP – although that’s true and there are no doubt many an urban member of Congress who votes for farm bills just because of SNAP. The nutrition title also creates an important link between producers and eaters. They call it a system of food for a reason. The nutrition title, in an otherwise producer-oriented bill sends the message that all Americans should care about the parts of their food system, even the ones that they don’t see.

So the second question is, if you split out the most controversial part of the producer-side of the Farm Bill and essentially solve it in many Americans’ eyes – what’s to become of the rest of the bill? The political hot potato last year was SNAP. The Tea Party Republicans in the House, backed by House Speaker John Boehner, (R-OH), prevented the bill from getting to the floor for a vote. They want SNAP cut drastically. SNAP was essentially preserved in that bipartisan Senate bill due to the end of direct payments and other measures. If we “waste” the opportunity by doing away with direct payments outside of the confines of a Farm Bill, are we taking an important progressive bargaining chip off the table to strike another compromise on agriculture’s flagship legislation later this year?

 

Filed Under: Blog Tagged With: Farm Bill, Harry Reid, Sequestration

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