Congressmen questioned Agriculture Secretary Tom Vilsack on a broad array of budget proposals Wednesday as USDA officials appeared before the House Appropriations Subcommittee for Agriculture to make their case about budget priorities for the next fiscal year.
Vilsack explained USDA's proposed budget, which could boost spending on child nutrition programs by $1 billion a year while effectively freezing the department's discretionary spending, which accounts for about $21 billion a year. With a boost in mandatory spending tied to nutrition programs, the Obama administration actually proposes increasing USDA's overall budget by $10.3 billion in fiscal 2011 to $129.6 billion.
In his testimony, Vilsack said the 2011 budget request "supports the administration's vision for a strong rural America through achievement of four strategic goals."
Those goals include improving and expanding child nutrition programs such as school lunches and breakfasts; improving the rural economy through expanded broadband and a continued push for green energy; strengthening agricultural production and profitability through the promotion of exports with a specific emphasis on biotechnology while responding to the challenge of global food security; and ensuring the nation's forests and private lands are protected "and made more resilient to climate change" while protecting water resources.
Lawmakers each had their own issues with the overall proposal or with related items. Chairman Rosa DeLauro, D-Conn., pressed Vilsack about food safety, wanting to know what it will take for USDA to remove a contractor from the school-lunch program. Vilsack said USDA's testing program for school-lunch providers is now being reviewed by the National Academy of Sciences, which likely will recommend some changes later this year.
Rep. Jack Kingston, R-Ga., ranking member of the appropriations subcommittee, questioned the value of a partial spending freeze given that USDA's budget has increased 26 percent since 2007.
"I want to point out I don't think the freeze is enough," Kingston said. "It's not a real freeze when you consider a 26 percent increase in the last two years."
Kingston also took issue with USDA's spending on the Biomass Crop Assistance Program (BCAP), a new program in the 2008 farm bill meant to help offset the cost of feedstocks for bioenergy providers. Originally pegged by the Congressional Budget Office to cost $70 million over five years, the program's cost has ballooned to $517 million in fiscal 2010 alone.
Vilsack told a group of biofuel state officials on Monday that he expects the program will spend $400 million to $500 million a year on bioenergy projects. Kingston questioned that spending.
"I think the BCAP program is the agriculture equivalent of Cash for Clunkers," Kingston said, adding that the program is paying people in the forestry industry for "what they had been doing for free."
Vilsack later told Kingston that USDA has its proposed rule for BCAP out for comment and is looking at various options for potentially placing some limits on how much people or industries could collect in government payments under the program.
Rep. Tom Latham, R-Iowa, wanted to know more about the proposed cuts to crop insurance, which are being negotiated now in a new five-year contract between the insurance industry and USDA. The latest draft of the contract would cut about $6.9 billion out of crop insurance over 10 years.
Vilsack defended the proposal, saying "rebalancing" was necessary in the industry, given the rise in profits since 2000.
"You are seeing dramatic increases in the amount of profits for the companies and the agents," Vilsack said.
Vilsack added that crop insurers have had strong profits in 13 out of the last 15 years. USDA proposes to cut the industry's average underwriting gains from 16 percent a year to 12 percent a year. "We think that is fair," Vilsack said.
Rep. Sanford Bishop, D-Ga., said he was concerned about the proposal to eliminate cotton and peanut storage payments, to which Vilsack responded that those were the only two commodities getting such payments.
Bishop also said he was worried about a proposal to cut direct payments. Vilsack said the proposal to cut direct payments "is focused on a very small percentage of farmers" and would affect about 30,000 out of 1.4 million farmers who collect direct payments.
"If we are going to be serious about deficits, we have to look someplace," Vilsack said.
Republicans also noted that USDA's budget proposes to spend $50 million a year to implement "cap-and-trade" carbon offset initiatives at USDA. Republicans questioned the need for such spending given that Congress is unlikely to pass a bill this year.
"The hopes of getting that done are not very bright at this point," Latham said. "I'm just wondering whether the research dollars could be spent somewhere else."
Vilsack said USDA needs to examine the importance of how crops will be affected by extreme weather changes, as well as possible increases in diseases and pests that could come from climate change.
Further, GOP members pointed out their skepticism about the need for climate-change mitigation.
"I would think people would take a second look at climate change given there is so much fraudulent data out there," Kingston said.
Source: DTN