Peterson says uncertainty is only certainty for next farm bill right now

‘Sequestration’–the across-the-board deficit cutting option may work out the best for Ag

Written by Jonathan Eisenthal

Rep. Collin Peterson (D-7th District, MN) opened the 2011 Minnesota Agricultural Leadership Conference last week with a survey of the political landscape in Washington, DC. Congress, like the country it represents, is utterly polarized, he said.

The prospects for the 2012 Farm Bill became the focus of the talk, of great interest to this gathering of leaders of commodity and farm organizations, agricultural business representatives, political advocates, government officials and academics.

This was the second annual Minnesota Agricultural Leadership Conference, organized by the Minnesota Corn Growers Association and drawing leaders from Minnesota Farm Bureau, Minnesota Farmers Union, Minnesota Soybean Growers Association, Minnesota Pork Producers and Minnesota State Cattlemen’s Association, among others, along with representatives of Rice, Cotton and other commodity and agricultural advocacy groups from around the nation. The gathering took place in Brainerd, Minnesota.

Peterson said the negotiations surrounding the next federal budget and the reduction of the federal deficit will impact every aspect of government, including agricultural programs. As ranking (minority) member of the House Agriculture Committee and formerly its chairman, Peterson is in a position to know how agricultural programs will be affected.

President Obama and the Republican leaders made a stop-gap compromise: a super committee has been drafted to come up with a budget that will cut between $1.2 and $1.5 trillion dollars from the deficit. Agriculture, like other ‘jurisdictional’ committees, will lobby the super committee with ideas about what to cut (and what not to). The super committee has to make a formal announcement of its budget plan by November 23. Failing that, automatic, across the board cuts, known as “sequestration”, will go into effect.

“Sequestration may be the best outcome for agriculture,” Peterson told the group.

“The latest figure we’ve heard for sequestration is nine percent,” Peterson said. “The baseline for (farm support spending) is about $210 billion over ten years so that comes out to an $18 billion cut. That’s a lot less than figures we’ve heard from other plans, like $34 billion, or $49 billion in the Ryan Budget.”

House Budget Committee Chairman Paul Ryan, a Wisconsin Republican, released a budget proposal in April that claimed to find $6 trillion dollars in deficit reducing cuts.

Peterson noted that Congress is completely divided about how to solve the deficit–one side wanting to raise taxes, the other wanting to cut spending–and neither side shows any interest in compromise. In such an environment, Peterson said it is extremely unlikely that the super committee charged with finding the cuts, will be able to find anything that could pass Congress. Therefore, sequestration is the likeliest outcome, he said.

“I could solve the budget problem tomorrow,” Peterson told the crowd. “All we have to do is shut down the EPA for two years.”

This statement generated big applause. Numerous farm leaders over the course of the two-day conference referred to unreasonable environmental regulations as one of the greatest threats to independent family farming right now.

Beyond the unlikely event that Peterson can succeed in efforts to limit the scope of the EPA and cut its budget, he expressed support for a strong crop insurance program no matter what shape the next farm bill may take.

Important changes to crop insurance that resulted in major budget savings ($12 Billion dollars by some calculations) were accomplished under the 2008 farm bill, and Peterson said it is important to evaluate how all those changes impacted the system and to make further changes that will bring more crops under the umbrella of crop insurance and increase farmer participation. Peterson believes that, of all the options, crop insurance is the most politically acceptable form of government support that can be promised to farmers.

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