The Obama administration's proposed fiscal 2012 budget for USDA would cut spending for federal farm programs but increase funding for feeding programs and renewable energy. Overall, President Obama's $3.7 trillion budget decreases the USDA's discretionary spending by $3.2 billion from the 2011 proposal to $23.9 billion, with the department receiving about $145 billion in total funding. The fiscal 2010 enacted amount was $27 billion.
Funding for mandatory programs is also expected to decrease by $300 million, according to the department budget summary released Feb. 14.
Among other things, the proposal would reduce direct payments to high-income farmers, refocus homeownership programs and improve conservation programs.
The president's budget refocuses agriculture spending to try to address the needs of smaller farms rather than farms with record profits, continuing one of Obama's goals from his previous budget proposal. The plan cuts farm program payments by $2.5 billion over 10 years and will affect 2 percent of program participants, according to a statement by Agriculture Secretary Tom Vilsack.
The proposal would cut off subsidies to farmers and landowners who have more than $500,000 in annual net farm income and $250,000 in off-farm earnings. Both limits would be $250,000 less than under current law.
The tighter rules on payments would save an estimated $2.5 billion over 10 years. The annual payments are the largest means of subsidy by far for grain and cotton farms, and the subsidies have drawn increasing political fire in recent years since farmers get them in good times and bad.
The budget plan would also lower by about 25 percent the current cap on direct payments to individuals by limiting the per producer amounts. The 2008 farm bill limit of $40,000 per producer participant in direct and countercyclical payments and $32,000 for the average crop revenue election ( ACRE ) program would be reduced to $30,000 and $24,000, respectively. This would provide a $1.5 billion savings over a 10-year period.
Discretionary spending for nutrition programs would receive $7.9 billion as a part of the proposal, up from $7.8 billion for the fiscal 2011 estimate. Total food and nutrition service funding increased from $104.9 billion to $111.9 billion in the 2012 proposal, according to the USDA's budget summary.
The budget proposal would provide $1.4 billion for conservation assistance through the environmental quality incentives program.
A summary of the budget proposal for USDA is available online in PDF format at this link.
