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April 11, 2013

How Does the Obama Budget Affect Agriculture?

For more information on Newsline, contact: Kari Barbic, Media Specialist, American Farm Bureau Federation, karib@fb.org.

The White House finally released its budget for 2014. American Farm Bureau economist Matt Erickson says, unfortunately, that proposal leaves a lot of uncertainty for U.S. agriculture. AFBF’s Johnna Miller has that story.
Miller:President Obama’s 2014 budget plan calls for $38 billion in cuts over 10 years to agricultural programs, targeting three areas: elimination of direct payments – which most in agriculture consider inevitable, cutting conservation programs and slashing crop insurance. American Farm Bureau economist Matt Erickson says that last one suggests a big disconnect.
Erickson:If you look at the House and the Senate, they’ve repeatedly said that we want to strengthen the crop insurance program. If you look at the president’s proposal, he’s not investing in the crop insurance program. He’s actually taking money away from the crop insurance program, the true safety net for farmers and ranchers.
Miller:Agriculture is one of the riskiest endeavors out there. A farmer never knows if a hurricane is going to wash his crop away. A rancher never knows if a drought or wildfire is going to destroy all the pasture for his cattle. Erickson says that’s why crop insurance is so important for the nation’s food supply.
Erickson:The 2012 drought we saw a lot of losses. Farmers and ranchers had no control over the weather. Crop insurance was there. If it was a good year and the farmer or rancher didn’t experience a loss, they wouldn’t get a crop insurance check because within the crop insurance program you have to experience a loss.
Miller:Looking at the broader picture, Erickson says, now that all the budget plans are in, be ready for the debt ceiling debate to rear its head again. Remember that last time it came up, we ended up with spending caps and the sequester.
Erickson:I think the big concern is just uncertainty. From a market standpoint, consumers are always affected by markets and markets just do not like uncertainty. Looking at the House budget, the Senate budget and the president’s budget, they’re all platforms for the budget debate. The question is, are we going to take these tools within each budget and how are we going to put the pieces to the puzzle together.
Miller:Johnna Miller. Washington.
Miller:Newsline is updated Mondays and Thursdays by 5pm Eastern. Thank you for listening.

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