It’s gonna hurt.
The failure of the U.S. Congress to deal realistically with budget issues for the past few years has already affected the nation’s economy. The phrase “fiscal cliff” that was bandied about late last year and into 2013 turned out to be more of a slope than a precipitous drop, but cuts already made and those coming soon will affect businesses, individuals and farmers and ranchers across the nation.
Reductions mandated by the sequester have meant employees furloughed, government agency travel and other budget items slashed and funding for nutrition programs cut—among other reductions.
The next round will affect programs that farmers and ranchers rely on.
The USDA Farm Service Agency (FSA) warns that producers should consider expected sequestration cuts as the work with 2014 budgets.
A recent FSA news release explains: “The Budget Control Act of 2011 (BCA) mandates that federal agencies implement automatic, annual reductions to discretionary and mandatory spending limits. For mandatory programs, the sequestration rate for FY2014 is 7.2 percent.”
Those cuts are automatic under sequestration. The following programs will be affected:
- Dairy Indemnity Payment Program
- Marketing Assistance Loans
- Loan Deficiency Payments
- Sugar Loans
- Noninsured Crop Disaster Assistance Program
- Tobacco Transition Payment Program
- 2013 Direct and Counter-Cyclical Payments
- 2013 Average Crop Revenue Election Program
- 2011 and 2012 Supplemental Revenue Assistance Program
- Storage, handling
- Economic Adjustment Assistance for Upland Cotton
Conservation Reserve Program payments are specifically exempt by statute from sequestration, and will not be reduced.
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“These sequester percentages reflect current law estimates; however, with the continuing budget uncertainty, Congress still may adjust the exact percentage reduction. Today’s announcement intends to help producers plan for the impact of sequestration cuts in FY2014,” said FSA Administrator Juan M. Garcia.
“At this time, FSA is required to implement the sequester reductions. Due to the expiration of the Farm Bill on September 30, FSA does not have the flexibility to cover these payment reductions in the same manner as in FY13. FSA will provide notification as early as practicable on the specific payment reductions. ”
Expectation of these cuts should encourage farmers and ranchers to adjust payment expectations accordingly. Some of these programs have proven critical to help producers through hard times, to promote U.S. agricultural products in export markets and to augment an already weaker safety net.
Farmers and ranchers also should call, write, email or visit personally with their members of Congress and encourage/insist that they put aside partisan bickering and deal realistically with the budget. They also should, in no uncertain terms, insist that Congress finish a farm bill that should have been passed more than a year ago.
With an election year less than two-months off, convincing entrenched legislators to work together may be a pipe dream, but it is a dream that desperately needs to come true.
Without some compromise, farmers and ranchers stand to be hurt.
In the meantime, producers can find more information about FSA programs by visiting the county USDA Service Center or go to www.fsa.usda.gov/.