Idaho farming regions in rural America, where Trump found some of his biggest supporters are going to take a big hit under the proposed 2018 budget. The USDA will see its budget cut by about 21 percent. This will mean that they have less money to spend on water programs and on staffing for its local Farm Service Agency offices countrywide. The recent election showed that Trump had a lot of support in the rural areas of Idaho. People facing economic hardship because of low crop prices turned on in drove to give Trump their support.
What Leaders Have to Say about It
While the director of market intelligence for the American Farm Bureau Federation agrees that the budget has to be balanced, they still oppose such cuts to agriculture. Collin Peterson, the House Ag Committee Ranking Member of Minnesota, said such cuts would be damaging to the heartland. He said that these cuts demonstrated that Trump had no understanding of the impact such cuts have on rural America. The USDA secretary has yet to be confirmed. Collin Peterson said that when the Agriculture Secretary took up his role, he would be able to explain how valuable these programs were to farmers in America. K. Michael Conaway, who is the House Agriculture Committee Chairman, also criticized the plan. He expressed concern that the cuts would hamper important work carried out by the department. He pointed out the fact that average farm income had dropped to about 50 percent of where it was just four years ago.
What about Mandatory Programs
The USDA has mandatory programs such as the nutritional assistance program and food stamps. These programs made up about 80 percent of its spending in 2016. The programs also include school lunch programs and child nutrition programs.
The Statistical Cuts
It is not yet clear whether Trump plans to cut the statistical capabilities of the USDA. The research staffs at the USDA produce reports and data about commodities such as hogs, cattle, and major crops such as wheat and soybeans. It is not yet clear which areas of statistics will be cut. However, it is an area of concern since all growers rely on market data when making planting, selling, and harvesting decisions.
In 2013, the USDA was forced to make cuts because of the sequestering. It led to the agency having to suspend some of its statistical reports. It was forced to cut its monthly cattle report and suspended data collection for some crops. However, it is not expected that there will be any major cuts, which would affect crop or price reporting.
In general, the USDA has more than 100,000 employees working in over 30 of its agencies and offices. The employees are found in over 4,500 locations across the country and abroad. USDA staff work abroad to promote agricultural trade for the US.
Some of the Hard Hitting Areas
One of the hardest hit areas by Trump’s budget is that of insurance premiums. The US government chips in to help Idaho farmers pay insurance premiums in case crop prices fall or the yield per acre falls. The result would be that the Federal government would reduce spending by about $28 billion in 10 years. Under the proposal, Trump wants to cap insurance subsidies for farmers at $40,000 for every farmer. The thinking behind this is that farmers do not really need incentives to take part in crop insurance. The reason for this is that having insurance is also already an important part of their business model.
Trump has proposed to cut subsidies to farmers by $9 billion. This will be achieved by reducing the maximum income level from $900,000 to $500,000 for one to be eligible. These cuts would also reduce the staff at the USDA by about 5.5 percent. This would lead to about 5,263 lost jobs. Economists and farmers all agree that agriculture needs more support. It employs about 11% of all employees in the US and contributes nearly $1 trillion to domestic productivity
There is No Need for Panic
Experts say there is no reason for farmers to worry. Brent Gloy, an agriculture economist, says it is going to be hard for Trump to get anything done. In fact, a seating member of Congress says the insurance cuts by Trump are unlikely to get past Congress. This is similar to proposed cuts by Obama and Bush, which never saw the light of day. Even farmers say that it is too early for Trump supports to feel let down by Trump. Subsidies for crop insurance have been helpful to farmers when wheat and corn prices have plummeted in recent years.
What Trump’s Side Has to Say
Trump’s administration says the proposed cuts are in line with the promise to balance the budget. Sonny Perdue, who is the acting secretary of Agriculture, says people knew what they were doing when they voted for Trump. He stated that these cuts were a chance for American people to see more being done with less. Some farmers are even supportive of these cuts. They believe that some subsidies are responsible for overproduction of certain crops, which hurts market prices. The budget will eliminate a flagship program known as Food for Peace. This was an international food aid program that would have cost the USDA $1.7 billion.
These are Merely Proposals
Of course, these are just proposals that Congress will have to consider. If past records are anything to go by, it is likely that Congress will reject a huge chunk of them. The agricultural committee chairmen of the House and Senate released a joint statement that did not directly talk about the proposal. However, they did promise to fight to ensure that farmers have a strong safety net.
Additionally, the Chairmen promised to ensure that nutritional assistance programs were aiding the most vulnerable in society. This is an indication that they will revive the rural-urban coalition, which has in the past worked to protect farm subsidies and food aid. Idaho Car Title Loans