Vilsack discusses proposed fiscal year 2013 budget
By Jennifer M. Latzke
February on Capitol Hill means it's once again budget discussion time. President Barack Obama released his proposed budget for fiscal year 2013 Feb. 13, and U.S. Secretary of Agriculture Tom Vilsack spoke to reporters about agriculture's gains and losses in the proposed budget.
Vilsack said in a prepared statement that both he and the president recognize that the country needs to foster an economy that makes, creates and innovates to be sustainable.
"Over the past three years, USDA has worked with the Obama administration to respond to the economic crises of 2008, put Americans back to work, and to rebuild economic security for the middle class," VIlsack said. "USDA has supported farmers, ranchers and growers so that last year they enjoyed record farm income. We have focused on creating jobs and building a foundation for future economic growth, especially in rural America, where unemployment is falling than in other parts of the country.
"The president's 2013 USDA budget helps us to continue this progress, supporting robust farm income and good jobs in rural communities," he added.
Vilsack emphasized that the agency itself has worked to cut waste from its own administration. The proposed budget provides $23 billion in discretionary funding, down 3 percent, or $700 million, from the 2012 enacted level. The agency, he said, is working on 379 key areas--the Blueprint for Stronger Service--where it can streamline operations, reduce costs, or close offices and redirect those savings to critical activities such as renewable energy, rural development and research.
"Since fiscal year 2010, USDA has seen our operating budget cut by $3 billion, or 12 percent," Vilsack stated. "This came on top of a $4 billion contribution to help pay down the debt."
The proposed budget, according to Vilsack, will save $32 billion over 10 years by eliminating direct farm payments, decreasing subsidies to crop insurance companies and focusing conservation funds to high priority areas. Vilsack said the budget offers disaster assistance, income support and farm loans and modernizes systems for farmers to access programs online at their convenience.
Some in agriculture are not pleased with the proposal to slash the farm safety net.
"Once again, the Obama administration has ignored feedback from producers, and a bipartisan majority of the Senate Agriculture Committee all of whom believe that crop insurance is the most effective safety net for agriculture," said Sen. Pat Roberts, R-KS. "Rather than listen to those in farm country, the Obama administration has chosen to recycle old suggestions and raid Agriculture to pay for excessive spending elsewhere."
While many in the farm community agree that direct payments are probably not sustainable under current federal budgetary constraints, they agree that farmers need a safety net to guarantee production. The president's budget renews the farm disaster program, but it proposes a 2 percent cut to the farmers' crop insurance premium subsidies, nearly $8 billion on top of the previous $6 billion cut from the previous SRA, according to Roberts.
In his testimony before the Senate Ag committee Feb. 15, Vilsack explained why the president chose to cut the federal crop insurance subsidies, rather than nutrition programs.
"The president had to decide whether to focus on a balanced approach, taking resources away from farm programs, conservation programs and nutrition assistance programs. He chose not to take away any from nutrition assistance programs," Vilsack said. He added that the crop insurance proposal recrafts and recalibrates catastrophic coverage and how premiums are set, which will offer savings and not affect farmers. It also address how the crop insurance program is administered, he said, affecting agents and not farmers. It also addresses the return on investment crop insurance companies generate from the sale of federally subsidized corp insurance.
"Historically, we believe a 12 percent return supports the industry," Vilsack said. "Today that return on investment is significantly above 12 percent, and the president feels that 12 percent is the place to be." The proposal also adjusts premiums for farmers where the subsidy paid to them is more than half of the premium.
"The question is who is in the best position to bear the cuts forthcoming," Vilsack said. "In the president's view, these insurance companies are in better positions to handle cuts than folks struggling with tight budgets and cannot afford to put food on the table for their families."
The proposed budget provides a 23 percent increase in funding for research and development through the competitive grants program and continues support for USDA research and public research at land-grant universities.
It increases the 2012 funding level for the Agriculture and Food Research Initiative to $325 million, targeting human nutrition and obesity reduction; food safety; sustainable bioenergy; global food security and climate change.
Yet, the budget also proposes no construction funds in 2013 for the National Bio and Agro-Defense Facility and proposes a new task force to determine if the new facility--currently under construction in Manhattan, Kan.--is actually needed. Roberts took this up with Vilsack during a Senate Ag Committee hearing Feb. 15.
Vilsack reiterated his support of the NBAF facility, and his commitment to working with the state and other officials like Roberts to make sure that the facility becomes a reality, only that it must be adequate to handle dangerous materials.
"So, obviously we're going to continue to work with you, and work with the committee and work with Congress, to make sure folks understand the significance of this facility," Vilsack said. "To make sure that they understand the concerns we have with the Plum Island facility and some of the needed repairs that would be required, and the cost of those repairs, over a period of 10, 15, 20 years, and whether or not we'd be better off as a country having a modern facility. This is critical for us in terms of being able to identify problems and being able to accurately analyze the extent of the problem."
The budget also includes $6.1 billion in renewable and clean energy and environmental improvements to create high-value jobs in rural America; improve America's energy independence; and drive global competitiveness. This funding supports Vilsack and the president's vision for rural America, which he testified to the Senate Ag Committee March 15. Specifically he challenged the committee to make a bold statement about the importance of rural towns and create opportunities for communities through a bio-based economy that could provide millions of jobs.
"For the first time in a long time we have a vision of a rural America where moms and dads, grandpas and grandmas can talk to their children about the extraordinary opportunity to create an economy in rural America that is less dependent on foreign oil, less dependent on moving to cities and suburbs to find opportunities, and to fundamentally change the character of this country and get us back into the business of creating, innovating and making," Vilsack testified.
Still some on Capitol Hill predict that this proposed budget will wind up being just that--a proposal. Already Senate Republicans are stating that the president's budget won't be considered in the Senate.
"I look forward to working with Chairwoman Stabenow to pass a new farm bill this year," Roberts said. "It is through the Committee's careful and open consideration of how to improve our nation's ability to meet critical global demand for food that will decide funding priorities, not through a budget proposal that according to Senate Majority Leader Reid will not even be considered in the Senate."
For more on the proposed FY2013 federal agriculture budget, visit www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/agriculture.pdf.
Jennifer M. Latzke can be reached at 620-227-1807, or email@example.com.