16/02/2011

In the USA, the Republican controlled House of Representatives is pushing for cuts to 2010 spending rates by more than $60 billion after the current resolution runs out on March 4. After the cuts, spending overseen by the House Agriculture Committee (also responsible for the Food and Drug Administration) will total just over $23 billion, 18% lower than its current budget.

Although the proposal has yet to pass through the Democratic senate, several groups are protesting the cuts to agriculture, which are three times more than the House is considering losing from nondefense discretionary spending this year; over 20 groups are drafting a letter to all members of the House of Representatives, asking that Congress spare the USDA and FDA from the devastating cuts.

Roger Johnson, president of the National Farmers Union said, “It sounds like a lot, but it represents only 2.3% of the entire $1.028 trillion in discretionary spending in the bill the House is considering.” However, Johnson quibbles that the House is not factoring the $6 billion that the Obama Administration cut last year to support for crop insurance into its decisions towards agriculture.

There are stark differences within the proposed cuts between what the House Appropriations Committee has chosen to cut and what the Obama Administration wants to support next year. Of the USDA budget, almost 80% goes to food stamp and nutrition programs. The House has proposed trimming $747 million from this, or $1 billion from what the President asked for this year. President Obama has responded to the proposals by asking, “If we’re cutting infant formula to poor kids, is that who we are as a people?”

Evaluating the two opposing fiscal proposals, Craig Cox, Environmental Working Group senior vice-president said, “It is unconscionable to propose cutting a program that puts food in hungry children’s mouths while continuing to send billions to farmers and landlords that are headed for a record profitable year.”

Parallels with EU CAP reform

Elements of the Obama Administration cuts are being met with widespread support, such as substantial reductions in subsidies to large farm operations, wealthy landowners and the crop insurance program. The US Environmental Working Group has welcomed these proposals by issuing a statement saying, “Continuing these subsidies is completely unjustified at a time when growers are profiting from years of record-setting income and commodity crop prices are skyrocketing.”

This stance is echoed in the EU where a proposed limit on single farm payments is being suggested as part of the CAP reforms to be finalised in 2013. Limiting the amount of subsidies a farm can receive will provide much needed support for small farmers, ensuring they can compete with larger-scale operations.

However, a ceiling for subsidies was not seen as one of Defra’s top priorities when it submitted its response to the EU Commission’s CAP consultation in January this year. Some in the UK farming industry claim that this is due to fears that capping single farm payments will place British farmers at a distinct disadvantage with countries such as France, where the average farm is much smaller compared to the UK.

Defra’s consultation response stated that, “Capping payments… would be counterproductive to EU aims to develop a competitive agriculture sector, and risk entrenching continued reliance on subsidies instead of independence.”

Farm Bill Conservation Programs to benefit from reforms

It would appear that Obama’s conservation proposals are less clear cut. In a statement released on Monday, US Agriculture Secretary Tom Vilsak announced that the new budget, “increases support for various Farm Bill conservation programs, including CRP [Conservation Reserve Program], on 335 million acres – an average increase of 20 million acres annually since 2009.”

Vilsak highlighted the benefits of initiatives like the CRP, which see farmers in the field rewarded for conservation work saying “these programs provide critical benefits to the American people, filtering our water, cleaning our air and improving our wildlife habitats.”

This system is similar to initiatives such as the Campaign for the Farmed Environment which encourage farmers and landowners to act as stewards, being directly responsible for upkeep and protecting local wildlife. Defra have pushed for similar measures to be supported under the upcoming EU Cap reforms, although a lack of voluntary uptake of the Campaign for the Farmed Environment recently forced Farming Minister Jim Paice into threatening the farmming community with a return to top-down regulation.

The Environmental Working Group has criticised the Obama Administration for proposed elimination of a combined 1,088,783 acres from the Conservation Stewardship Program, Grassland Reserve Program and the Wetland Reserve Program, which protect vulnerable land.

While both EU and US reforms include heavy cuts as a result of budget deficits, the Obama Administration's proposals also include focusing loans on rural electricity cooperatives to support the development of renewable technologies, which the USDA say will create a nation-wide renewable energy industry and result in hundreds of thousands of new jobs in rural America. Tom Vilsak believes this reallocation of funds will play a large part in "helping us reduce our dependence on foreign oil, and reducing risks to our environment."