When looking at the deficit reduction plan outlined by President Obama on Monday - U.S. Ag Secretary Tom Vilsack says we need to look at it in the context of what it will take to get America back on track. He says we need to get Americans working again, build a foundation for sustained growth with research and innovation and get this nation’s fiscal house in order. Vilsack says that requires difficult decisions like those recommended by the President.
The President’s proposal includes 33-billion dollars in cuts to ag programs. Suggestions for the crop insurance program have caught the attention of many in the industry and lawmakers:
“I should point out that our actuarial studies shows that in order for the crop insurance industry to remain viable, to be able to offer the products that they need to offer, they need about a 12% return on their investment, and that’s what the President’s proposing. And what I think they’re failing to realize is that if we don’t have some kind of significant deficit reduction program that touches many areas of the government, what will happen is that we’ll have an across-the-board cut based on what congress passed when they did the debt ceiling issue. So, it’s not a question of no liking certain aspects of what the president’s put forward the question is if we’re not going to take action if we don’t take action then the automatic triggers come into play and we’re going to look at further reductions.”
Vilsack doesn’t believe the plan will result in higher premiums for farmers - but will continue disaster programs. Vilsack considers that the most important part of the proposal:
“I don’t know that a lot of folks fully appreciate that come October 1 the SURE program and some of the 2008 farm bill disaster programs go out of business. The president proposes to renew those and extending those, which I think is extremely important. The previous congress when it put together the 2008 farm bill didn’t fully fund those programs through the end of the farm bill, so they’re not in the base line. So, you’d have to find additional resources for that, and that’s basically what you’re doing with the farm insurance resources you’re taking money from crop insurance companies and you’re basically creating an extension of the disaster programs for farmers.”
As for the 2012 Farm Bill, Vilsack says the administration is willing to provide technical assistance and is working with members of the Ag Committees and other interested Congressmen. He says they’re also indicating pressure points that they believe should be addressed:
“One of which is, what do we do about providing for beginning farmers, those that are getting into the business, part of it is making sure that if there’s going to be changes in the direct payment system as the president proposes and as some commodity groups have proposed, you don’t want the unintended consequence of reducing the capacity of conservation programs to protect environmentally sensitive and highly erodible land, you want to make sure that they continue to be in the conservation programs. And so we’ve suggested that there needs to be an understanding of that and an appreciation of that and perhaps greater flexibility and simplification of some of these programs. We’ve also suggested we clearly need to keep the safety net in place, not only crop insurance but it’s also some mechanism where we look at if there’s market failures, and I think what we’re likely to see is a revised and simplified ACRE program.”
Ag Secretary Tom Vilsack