Farmers have been expecting a cut in their Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) payments as a result of mandated Congressional sequestration federal spending cuts, and until this week they’ve heard a great deal of talk about how much those cuts would be.
Now they know—6.8 percent across the board.
Agriculture Secretary Tom Vilsack met with members of the House Agriculture Committee Wednesday (Oct. 7) for a hearing on dietary guidelines and during that session announced the amount in ARC and PLC cuts that will be made.
Applying to all ARC/PLC payments for 2014-2016, the reduction farmers can expect will be 6.8 percent across the board, but sequestration cuts will apply to other USDA programs as well, including marketing loans, sugar loans and the Noninsured Crop Disaster Assistance Program.
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Previously USDA announced that Conservation Reserve Program payments will not be affected by federal sequester cuts.
News of sequestration cuts to farm payments is nothing new. Federal budget sequestration was passed by Congress in 2011 and outlined specific cuts for mandatory and discretionary federal programs. But farmers have heard conflicting talk about how much cuts they should expect in their ARC and PLC payments.
At one time USDA told farmers they were considering increasing the level of cuts farmers would receive if they failed to register before the Oct. 1 deadline, the start of this fiscal year. Some talk centered on a graduated rate reduction of 6.8 percent for farmers who registered by the deadline and a 7.3 percent rate reduction for those that registered after the deadline. But Vilsack said Wednesday cuts would be uniform regardless of when farmers signed up for coverage.
"Payments [will be reduced] across the board, regardless of when they [farmers] came into the office," Vilsack told committee members during Wednesday's hearing.
USDA reports they will begin making payments in the coming weeks for 2014 crops.
In other action in Wednesday's hearing, the USDA and Health and Human Services' (HHS) proposed federal dietary guidelines was a hot topic with both Vilsack and HHS Secretary Sylvia Burwell defending the proposed guidelines before the committee, saying they will not be published until the end of the year. Those guidelines are revised by the federal agencies once every five years.
The chairman of the committee, Texas Republican Michael Conaway, said it's important for the government to get the recommendations right because changing guidelines causes consumer confusion.
"It is essential that the guidance that comes out of this process can be trusted by the American people," Conaway said.
Vilsack told the Committee that a controversial sugary food and soda tax and stricter limits on salt consumption will not be part of the guidelines this year. Both cabinet secretaries said those recommendations are outside the scope of the guidelines, especially after lawmakers and industry representatives pushed to have them dropped from the new federal dietary guidelines earlier this year.
Vilsack said recommending consumption of fruits and vegetables, grains, dairy, lean meats and seafood, while encouraging Americans to limit saturated fats, sugars and sodium will, however, still be part of the federal guidelines when released in late December.