How Trump’s budget proposal would impact USDA

President Donald Trump’s plan to eliminate the federal deficit over the next 10 years would mean big budget cuts for USDA, including a $275 billion reduction in funding for farm bill programs, rural development, inspection and marketing services and nutrition assistance over the coming decade.

In some areas, those cuts would be offset by new user fees for inspection and marketing services and user fees for retailers and matching funds from states for nutrition assistance.

Any budget decisions are made by Congress. The administration’s proposal can serve as a roadmap for congressional actions, or it can be ignored.

USDA’s proposed FY 2018 budget calls for a reduction of $11.8 billion across the agency’s seven mission areas and do not reflect Secretary Sonny Purdue’s recent reorganization plan, which adds an undersecretary of trade and eliminates rural development as a core mission area.

USDA’s current budget is $155 billion. Without factoring in salary increases or any other changes, total spending would total $1.55 trillion over the coming decade.

The biggest cut in the proposed budget is to nutrition assistance, both in 2018 and in the long run. The proposal for FY 2018 reduces spending by nearly $8.4 billion, with $4.9 billion of that dependent on proposed legislation.

In the current USDA budget, 71 percent, or about $110 billion, goes to nutrition assistance.

The proposal would tighten eligibility and benefit calculation standards, establish a fee for retailers applying and recertifying to accept Supplemental Nutrition Assistance Program benefits and implement a 25 percent SNAP cost-share requirement for states.

USDA estimates the proposal would save $194 billion over 10 years but the budget would fully fund estimated participation.

The 2018 budget would reduce Special Supplemental Nutrition Program for Women, Infants and Children funding by $188 million. It also does not fund the discretionary Farmers Market Nutrition Program, which is estimated at $19 million in 2017.

House Agriculture Committee Chairman Michael Conaway said he shares the administration’s goal of reducing the size of the national debt and setting the country on a sustainable economic path.

“But I have reservations about making counterproductive cuts, like those to farm policy and crop insurance, which are programs of critical value to producers at a time of great economic uncertainty, he said.

The reality is agriculture has done more than its fair share. CBO projections show that the 2014 Farm Bill is now on target to save $104 billion — more than four times the anticipated $23 billion, he said.

He said he’s still reviewing the proposed budget changes to the SNAP program but noted the committee has taken a close look at the program through a series of hearings over the past two years and remains committed to making “smart” reforms that prioritize good policy as it heads into the next farm bill.

“I anticipate Congress will produce a final budget that reflects the tough times facing rural America and enables us to craft an effective, efficient farm bill,” he said.

Conaway recognizes several concerns within the agricultural community, but he’s always been a strong advocate for the value of farm programs and the safety net they provide — and it’s going to be Congress that really writes the budget, said Rachel Millard, communications director for the House Agriculture Committee.

Sen. Mike Crapo, R-Idaho, said he commends the president for submitting a budget that puts the country on track to balancing the budget and Congress will carefully evaluate the proposal.

“It is important to streamline, reduce and eliminate duplicative or redundant programs across all agencies in order to help American businesses and the economy thrive,” he said.

But it is essential that much-needed efforts to balance the federal budget do not add to the challenges facing farmers and ranchers, who continue to suffer through economic headwinds, he said.

Natural Resource and Environment: The 2018 budget proposal would reduce conservation funding by $89 million, funding for Natural Resources Conservation Service technical assistance by $61 million and U.S. Forest Service funding by $970 million — although it fully funds wildfire suppression.

Trump’s budget plan would eliminate enrollment of new acres in the Conservation Stewardship Program for a reduction of $180 million in the 2018 budget and a 10-year savings of $7.9 billion. It would also eliminate the Regional Conservation Partnership Program for a reduction of $100 million in 2018 and a 10-year savings of $755 million.

The plan also calls for additional funding for the Environmental Quality Incentives Program to the tune of $250 million in 2018 and $1.9 billion over 10 years.

It would also provide additional funding for the Agricultural Conservation Easement Program — $450 million in 2018 and $3 billion over 10 years.

Rural Development: Trump’s 2018 budget proposes to eliminate funding for all discretionary rural business and most rural utilities and rural housing programs.

It also would terminate the Water and Waste Disposal Program and eliminate the Single Family Housing direct loan program. USDA noted that rural communities have access to funding for those projects from other federal agencies or the private market.

Proposed legislation to eliminate interest payments to the Electric and Telecom Cushion of Credit account would cut $131 million from the 2018 budget and save $1.4 billion over 10 years.

Eliminating the Rural Energy for America loan and grant program would cut $50 million from the 2018 budget and save $432 million over 10 years.

Eliminating the Rural Economic Development Program would cut $6 million from the 2018 budget and save $477 million over four years, reflecting staff cuts or reassignments to other programs and cuts to such things as facilities and maintenance.

Farm Service and Foreign Ag Services: Several changes are proposed for the Farm Service Agency, Risk Management Agency and the Foreign Agricultural Service that would cut the budget in 2018 and beyond.

Cutting $82 million in the 2018 budget and $1.9 billion over 10 years, one proposal would enroll no acres under the general signup through 2020 and eliminate signing incentive payments and practice incentive payments on all newly enrolled acreage except for the Conservation Reserve Enhancement Program.

Another would limit commodity and conservation assistance to producers with an adjusted gross income of $500,000 or less, cutting $72 million in 2018 and $654 million over 10 years. Another would eliminate the Biomass Crop Assistance Program, cutting $3 million in 2018 and $3 million over 10 years.

Three proposals for the Risk Management Agency would target insurance subsidies for producers with an adjusted gross income of $500,000 or less, limit premium subsidies to $40,000 for any one entity and eliminate subsidized harvest price revenue coverage. Those changes are projected to begin in FY 2019 and save $28.2 billion over 10 years.

Proposals for the Foreign Agricultural Service would eliminate the Market Access Program, cutting $30 million in 2018 and saving $1.8 billion over 10 years; eliminate the Agricultural Wool Apparel Manufacturers Trust Fund, cutting $30 million in 2018 and saving $60 million over 10 years; eliminate the Foreign Market Development Cooperator Program, cutting $24 million in 2018 and saving $34 million over 10 years; and eliminate the Pima Agricultural Cotton Trust Fund, cutting $16 million in 2018 and saving $16 million over 10 years.

Research, Education and Economics: Funding for the National Agricultural Statistics Service is increased for 2018 to conduct the 2017 Census of Agriculture but is down in other areas.

The termination of some research programs and the closure of 17 facilities would reduce the budget for the Agricultural Research Service by $360 million.

The National Institute for Food and Agriculture would lose $59 million, and the Economic Research Service would lose $8 million.

Marketing and Regulatory Programs: Legislative proposals would eliminate the Specialty Crop Block Grant Program, cutting $85 million in 2018 and saving $771 million over 10 years, and eliminate the Farmers’ Market and Local Food Promotion Program, cutting $30 million in 2018 and saving $30 million over 10 years.

Budget cuts also reflect establishing user fees to cover services.

The plan would establish a user fee for Agricultural Marketing Service marketing orders and agreements, collecting $200 million over 10 years.

Similar proposals are planned for the Animal and Plant Health Inspection Service and Grain Inspection, Packers and Stockyards Administration. That would fund the APHIS budget $20 million in 2018 and collect $200 million in fees over 10 years and cut GIPSA’s budget $30 million in 2018 and collect $300 million in fees over 10 years.

Food Safety: Budget cuts reflect the transfer of catfish inspections to the Food and Drug Administration and an anticipated reduction in user fees for overtime, holiday and voluntary inspection services by the Food Safety and Inspection Service.

The proposal would also establish a user fee to cover all domestic inspections, import re-inspections and central operations for meat, poultry and egg inspections. Total collections are estimated at $5.9 billion over 10 years, with implementation beginning in 2019.

In addition, Trump’s proposed USDA budget for 2018 reduces staff by 5,263, a 5.5 percent reduction from the 95,890 employees in 2017.

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