With the 2019 Virginia General Assembly session adjourned, I have turned my full attention from the state capital back to our nation’s capital, and the federal issues that impact your farm. Since the 116th Congress convened in January, we have seen more than 2,900 bills introduced, as well as the Administration’s FY2020 budget proposal. As we move into another year of low commodity prices and farm income, the federal agriculture budget is more important than ever. Let’s dive into the federal agriculture budget and how it would impact your operation, both positively and negatively.
On March 11th, the President released the administration’s federal budget for FY2020. The $4.75 trillion budget is the largest in federal history, yet calls for a 15 percent reduction in funding for the USDA. The total budget request for USDA amounts to $20.8 billion, which is $3.6 billion below current levels. The proposed cuts affect both discretionary funding (set through the annual budget and appropriations processes) and proposed legislative changes to programs authorized and funded in the 2018 Farm Bill.
High-Level Agricultural Budget Summary by Issue Area:
Crop Insurance & Farm Bill
- Imposes an Adjusted Gross Income (AGI) limit of $500,000 on commodity, conservation, and crop insurance subsidies
- Reduce the average premium discount for farmers by 14 percentage points (from an average of about 62 percent to 48 percent)
- Tightens commodity payment limits, including eliminating the separate payment limit for peanut producers.
- Limits eligibility for commodity subsidies to one manager per farm.
User & Inspection Fees
- Establishes Food Safety and Inspection Service user fees.
- Establishes Animal Plant and Health Inspection Service user fee
- Establishes Grain Inspection, Packers and Stockyards Administration user fee. Estimated total collections would be $250 million over 10
- Establishes Agricultural Marketing Service user fee. Estimated total collections would be $200 million over 10
- Eliminates the Rural Energy for America Program, which offers a combination of grants and guaranteed loans for farmers to purchase renewable energy systems.
- Eliminates the Rural Economic Development Program, which provides funding for rural projects through local utility organizations.
- Eliminates value-added producer grants
- Increases the Business and Industry Loan Guarantee Program
- Maintains funding for FSA Farm Ownership Loans at FY2019 levels
- Cuts FSA direct and guaranteed operating loans by 9 percent
A lot of what you just read is worrisome. However, it is important to remember that the President’s proposed budget is just that – a proposal. This proposed budget simply outlines the President’s recommendations and is only the first step in the annual federal budget process. In the end, Congress sets the budget and writes appropriations bills.
In the coming weeks, the House and Senate Agriculture Appropriations Subcommittees will host hearings with USDA representatives where they will present their analysis of the President’s budget proposal and how it will impact the agency. Farm Bureau looks forward to working with leadership in the House and Senate Agriculture, Appropriations, and Budget Committees to protect the programs and services critical to farmers’ ability to manage the risks inherent in production agriculture as well as protect programs that are vital to our rural communities.
The USDA summary can be found here, and the full federal budget can be found here. Click here for a letter signed by Virginia Farm Bureau and nearly 200 other organizations urging House and Senate Budget Committee Chairs to oppose cuts to farm programs.
Federal Funding for the Chesapeake Bay
Outside of the President’s proposed budget, we are also seeing spending bills introduced by members of Congress. This month, Representative Elaine Luria (VA-2) introduced HR1620, new legislation that would reauthorize and increase federal funding for the Chesapeake Bay Program. The bipartisan legislation has eleven co-sponsors, including Virginia Representatives Wittman (VA-1), Scott (VA-3), Riggleman (VA-5), and Connolly (VA-11.)
The bill would boost federal funding for the Bay Program from $73M up to $90 million for fiscal year 2020, $90.5 million for 2021, $91 million for 2022, $91.5 million for 2023 and $92 million for 2024. This increase would provide vital funding that farmers need to put conservation programs and practices on the ground. Senator Ben Cardin of Maryland has introduced similar legislation in the Senate.
Advocating for Young and Beginning Farmers
As you read through the list of programs and resources above, you may have thought about how important they are to your operation and its viability. Imagine how difficult it would be for a young or beginning farmer to start their operation if these programs went away, or lost funding. On March 18th, Nottoway County Member and Young Farmer Achievement Award Winner, John Shepherd, and I traveled to the Agri-Pulse Ag & Food Policy Summit at the National Press Club in DC. John joined four other young farmers on a panel speaking on the future of farming and programs that helped them to be successful. John and the other farmers credit many of these programs for their early success and stability as they grew their farms, and in some cases, diversified their operations. The event was a great reminder of why these programs are so important to the agriculture industry, and why we must all work hard to communicate their worth to our elected officials who hold the federal purse strings.
As always, please do not hesitate to be in touch with any questions on the issues above or any policy, state or federal, that is important to you.