Sequestration Seems Likely

Under the Budget Control Act passed in August, 2011, without a farm bill, “sequestration” will take place. That is to say there will be automatic budget cuts. For farm bill spending that would be a 15.6-billion dollar cut, based on rough estimates from the Congressional Budget Office. By law the Supplemental Nutrition Assistance Program and the Conservation Reserve Program are exempt from sequestration.

So, where will the cuts come from? Most likely from crop insurance subsidies, followed in terms of size of cut by commodity program payments and then conservation incentives.

In the meantime, Congress could pass a new deficit-reduction plan that avoids sequestration and enables another spending reduction mechanism. That could give Congressional committees power to determine how to cut spending within their jurisdictions.