Agriculture

On June 21, 2012, the Senate voted 64-35 in favor of S. 3240, the Agriculture Reform, Food, and Jobs Act of 2012, which would cut the deficit by $23.6 billion over a ten year period. At first glance this seems like a lot of money, until you realize that the bill authorizes a total of $969 billion in spending for fiscal years (FY) 2013 to 2022, and that the $23.6 billion reduction represents just 2.4 percent annual savings or $2.36 billion per year over the coming decade. The legislation does eliminate some wasteful programs, such as the Average Crop Revenue Election program, direct payments, and counter-cyclical payments, but many profligate programs are left largely unreformed and new ones have been created.

When is $24 billion not a lot of money? When it represents all the savings taxpayers can expect from the supposedly new-and-improved Farm Bill, formally known as S. 3240, the Agriculture Reform, Food, and Jobs Act of 2012, which may reach the Senate floor by mid-June. The bill, which was co-authored by Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) and Ranking Member Pat Roberts (R-Kan.), outlines what the Congressional Budget Office (CBO) estimates will amount to $969 billion in spending on commodity programs, rural development, farm credits, conservation, agricultural research, and nutrition programs, among others, from fiscal year (FY) 2013 to 2022.

The U.S. Department of Agriculture’s (USDA) Rural Electrification Administration (REA) program began during the New Deal Era of the 1930’s. The program’s primary goal was to promote rural electrification to farmers and residents in out of the way communities where, due to the high cost borne by utility providers, such investments were not considered feasible. By 1981, 98.7 percent of these homes and businesses received electricity and 95 percent received telephone service. Rather than declaring victory and closing its doors, REA was transformed into the Rural Utilities Service (RUS), which expanded to provide loans for broadband communications to underserved areas of the country. Through the RUS program, the USDA acts as a credit agency that assists rural electric and telecommunications utilities obtaining financing, as well as administers nationwide water and waste loan and grant programs that are intended to improve the quality of life and promote economic development in rural America.

Reports on the progress of Congress’s Joint Select Committee on Deficit Reduction in its quest to identify $1.2 trillion in savings by November 23, 2011 are decidedly mixed. An open hearing on October 26 yielded some hand-wringing, but little in the way of new information about the final outcome. An October 27, 2011 article in The Hill hints that the committee may be deadlocked.

Draft legislation by House Agriculture Committee Ranking Member Collin Peterson (D-Minn.) proposes new dairy programs that will cost thousands of jobs and increase the price of milk and other dairy products. With high unemployment levels and families struggling to make ends meet, this is not what the nation needs.