2008 FARM BILL AND FY-2011 BUDGET

ASA Position

ASA supported enactment of the 2008 Farm Bill despite the fact that cuts in overall agriculture spending preventing soybean producers from achieving full equity in support levels with other program crops. We oppose reopening this legislation, which provides a long-term commitment to provide income support to farmers when prices and yields decline.

The Administration’s budget proposals for FY-2011 would require Congress to reopen the 2008 Farm Bill in order to reduce the cap on Direct Payments and the Adjusted Gross Income thresholds for farm and non-farm income that determine eligibility for program benefits. It would also impose an $8.0 billion cut in spending for the federal crop insurance program over ten years, and a 20 percent reduction in the Market Access Program. ASA strongly opposes these proposals, and urges Congress to maintain the current safety net for U.S. farmers through expiration of the Farm Bill in 2012.

Background

Agriculture spending, not including food stamps and nutrition programs, represents barely two percent of the federal budget.  While the cost of other entitlement programs, particularly social security, medicare, and medicaid, have continued to rise, baseline outlays for farm programs have declined since 2008. At the same time, agriculture exports in 2010 are expected to top $100 billion, making a significant contribution to reducing the U.S. trade deficit. Compared to federal support for other industries, the agriculture sector is providing “bang for the buck.”

With no additional funding available for the 2008 Farm Bill, farm program outlays were reduced to accommodate increased spending for conservation, energy, rural development, and specialty crops. Soybean producers saw only a minor increase in income support under the Target Price Program, but strongly supported other provisions in the legislation,  these included authorization of the Average Crop Revenue Program (ACRE), reauthorization of the Bioenergy Program for Advanced Biofuels, including funding of $300 million for 2009-12, reduction of the cap on the Conservation Reserve Program to 32 million acres, authorization of the Quality Incentive Program, and expansion of incentives for biobased products, including USDA’s list of BioPreferred Products and development of a new biobased labeling program.

The President’s Budget for FY-2011 would reduce the cap on Direct Payments from $40,000 to $30,000. It would also cut the Adjusted Gross Income threshold for farm benefit eligibility from $750,000 to $500,000 for farm income, and  from $500,000 to $250,000 for non-farm income. These and other proposals to means-test farm program benefits were considered during debate on the 2008 Farm Bill. Some reforms were adopted, including significant changes in payment limitation provisions. The final legislation included numerous compromises between different interests that received resounding support in Congress. President Bush’s veto of the 2008 Farm Bill was overridden by votes of 319 to 106 in the House and 82 to 13 in the Senate. Reopening this legislation less than two years after enactment would undermine its commitments, not only to U.S. farmers, but to other agriculture and food sectors which benefit from its provisions.