What is in this article?:
- Farm commodity prices are high, expectations for the 2011 crop year optimistic and producers are finalizing their cropping acreage breakdown. At the same time, spending deficits remain unsustainable, the U.S. economy remains in a low gear and a record 44 million Americans – one in eight – were on food stamps late in 2010.
- Into this situation, President Obama released his fiscal year 2012 budget (which begins on Oct. 1). Early reviews were mixed, with Republicans accusing the White House of largely side-stepping the deficit.
During a Monday afternoon conference call with reporters, Agriculture Secretary Tom Vilsack repeatedly justified Obama’s budget approach as seeking “balance.”
Vilsack was reminded that major U.S. commodity groups oppose a means test for farm payments.
“In terms of the means test, this is the reality,” said Vilsack. “You have on the one hand, a national consensus – Republican, Democrat, independent, whatever – that we have to get the deficit under control. So, you’ve got to make some tough choices and decisions about precisely where you can look at reductions.
“At the same time, there is an acknowledgment of the need, based on the fact that in certain commodity circumstances or certain areas of the country or certain size operations are struggling or having greater difficulty than the general ag economy. So, you do need a safety net, you do need loan programs, you do need crop insurance programs, you do need disaster programs, and, to a certain extent, you need some kind of payment structure.
“The question is: who should get those payments given the current … reality of a very strong ag economy, generally – particularly for larger producers – with cotton prices up, with corn and bean prices up, wheat prices relatively strong? Who should receive the benefit of those payments?
“Budgets are a series of tough choices. And this budget is one of the toughest budgets all of us have faced.”
There was no counter-cyclical payment in 2010 and the money allocated wasn’t spent. How will such unspent funds be tallied?
“The counter-cyclical (situation) reflects the reality … in the 2011 circumstance. We don’t have a budget yet in 2011 so it’s kind of tough to compare the current year because we flat-out don’t have a budget.
“But the budget we’re proposing doesn’t provide for any counter-cyclical payments based on where commodity prices, and so forth, are.”
Asked about the House Republican agriculture budget proposal, Vilsack said he “appreciates that everyone is serious about tackling these deficits” but cautioned that budget cutting must not kill needed economic growth.
“We have to be smart … and responsible how we go about it. We have to make sure we don’t compromise our ability to invest in growth opportunities. The growth opportunities in the 2012 budget are biofuels, additional research on livestock … and crop production and protection, work potentially in conservation, ecosystem markets and exports. Those are all growth opportunities … and we want to make sure we don’t jeopardize our capacity to grow our way out of this deficit in addition to cutting our way out of the deficit.
“It’s a balance. So, we’ll work with our friends in Congress … to try to find where that proper balance is.”