Commodity Groups Worry About Bill Funding

A coalition of farm and commodity groups wants USDA to halt re-negotiation of the standard reinsurance agreement until they can be sure that the House and Senate Agriculture committees will be able to tap into any savings under the new agreement for spending in the 2012 farm bill.

A coalition of farm and commodity groups wants USDA to halt re-negotiation of the standard reinsurance agreement until they can be sure that the House and Senate Agriculture committees will be able to tap into any savings under the new agreement for spending in the 2012 farm bill.

In a letter to Agriculture Secretary Tom Vilsack, the 10 organizations point out that the budget baseline established by the Congressional Budget Office assumes a $3.9 billion savings over 10 years as a result of cuts proposed in an early draft of the standard reinsurance agreement. 

"Congress was not 'credited' with a savings mandate for the SRA renegotiation provision included in the 2008 farm bill," says their letter. "However, CBO appears to be basing its savings on what it believes to be a plausible outcome to those negotiations. We further understand that if the final negotiations provide more than $3.9 billion in reductions, CBO will immediately update its baseline to reflect those savings and Congress will not be credited with the savings either."

The concern is that any cuts in the federal crop insurance program could harm that program and "sharply reduce the agriculture budget in the advent of a baseline budget farm bill." In addition, say the groups, "It would make a potential budget reconciliation process next year extremely difficult."

To address its concerns, the coalition is calling on Secretary Vilsack to halt the SRA re-negotiation that the department is conducting with the crop insurance industry and continue to operate under the current SRA . The groups hope that Congress will then take appropriate legislative actions that will prevent the farm bill baseline from declining.

The 10 organizations that signed the letter are the American Farm Bureau Federation, American Soybean Association, American Sugar Alliance, National Association of Wheat Growers, National Barley Growers Association, National Corn Growers Association, National Milk Producers Federation, Southern Peanut Farmers Federation, USA Rice Federation and Western Peanut Growers Association.

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