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6 February 2010 - Get Set for Another Battle

I think there is a strong possibility that many of you involved in farming and ranching will be doing a lot more plowing and cultivating on Capitol Hill this year because right now it looks like we are in for some interesting battles involving agriculture and the agricultural budget.

During his State of the Union address I heard President Obama mention ‘farmers' once when he talked about expanding exports. But in the budget message the President sent to Congress a few days ago there are several farmer mentions, all involving cuts in agricultural programs. I'm not going to debate the merit of the agricultural programs the President has placed on the chopping block, but I do want to give you a sense of the battle that is shaping up on Capitol Hill.

President Obama, among other requests in his budget message, asked Congress to slash crop subsidies to "wealthy farmers" and to cut federal support for crop insurance; moves the President said would save ten-billion dollars over ten years. Now, if you think you have heard this before, you have...just a year ago when the President made the same requests and Congress said no way. But in his State of the Union Address he said "We don't quit".

In his proposed budget, the President suggested a sharply lower cut-off income level to qualify for crop supports and said it would save two- and-a-quarter billion dollars over ten years. He estimated eight-billion dollars would be saved by reforming administration of the federally subsidized crop insurance program to end "huge windfall profits". U.S.D.A is currently negotiating a new master agreement with insurers to substantially reduce overhead payments which more than likely will mean higher premiums for producers.

The fight on Capitol Hill will not only come from agricultural groups but from within the Democratic Party. Congressman Collin Peterson, Minnesota Democrat and Chairman of the House Agriculture Committee, in response to the President said "It is the job of Congress to write the annual budget and based on my conversation with House leadership no one is interested in making cuts to the Farm Bill after the battle we fought to pass it a year-and-a-half ago".

Now the dollar numbers I've quoted sound like big numbers and they are, but keep this in mind. How much of a dent will agricultural cuts make in the overall federal budget when the USDA budget accounts for ½ of 1% of the federal budget? Not much! But as producers you cannot afford to sit in the stands and be a spectator, you must be on the field as an active player to protect your interests in the most important industry in this country.

My thoughts on Samuelson Sez.