Milling & Baking News - February 22, 2011 - 20

Washington 

U.S.D.A. unveils $145 billion budget for ﬁscal 2012
WASHINGTON — The U.S. Department of Agriculture on Feb. 14 unveiled its $145 billion budget request for ﬁscal 2012. The budget was $3 billion smaller than the administration’s budget request for ﬁscal 2011 (a federal budget for ﬁscal 2011 has yet to be enacted) but was $14 billion larger than the budget enacted for ﬁscal 2010. The U.S.D.A.’s budget for ﬁscal 2012 took into account $121 billion in funding required to operate mandatory programs, down $1 billion from a requested $122 billion for ﬁscal 2011 but up $18 billion from ﬁscal 2010. The department requested $24 billion to operate discretionary programs in ﬁscal 2012, down $2 billion from the administration’s request for ﬁscal 2011 and down $4 billion from a budgeted $28 billion in ﬁscal 2010. Secretary of Agriculture Tom Vilsack said the budget reﬂected the need to cut several programs as part of government-wide efforts to reduce the federal budget deﬁcit even while initiating or increasing “targeted investments” in areas that support job creation, economic competitiveness and exports. The budget would reduce funding for rural development initiatives by $535 million compared with requested 2011 funding, and the administration targeted select farm program payments to save another $1 billion. The budget indicated funding would increase for renewable energy research and commercialization with that sector considered vital to future economic and job growth. The U.S.D.A.’s budget for ﬁscal 2012 indicated farm and commodity programs would account for 13% of all outlays. The key change in the nation’s farm programs sought by the administration was a reduction in direct payments made to producers. These payments have been made annually since the 1996 farm act was implemented. They initially were called agricultural market transition act payments indicating they were viewed as temporary payments to assist producers during a transition to a more completely market-based farm economy. But subsequent congresses instead of allowing the payments to expire allowed them to become the centerpiece of the farm income support system. The U.S.D.A. budget for ﬁscal 2012 would provide $3,879 million for
20 / February 22, 2011 Milling & Baking News

direct payments to farmers. That level was down $1,071 million, or 22%, from an estimated $4,950 million in direct payments in ﬁscal 2011 and compared with $4,898 million in direct payments in ﬁscal 2010. The savings in direct payments from previous years would be accomplished by means of legislation sought by the administration to implement statutory reductions in the current cap on direct payments and a

three-year phased reduction in farm program average adjusted gross income (A.G.I.) eligibility limits for larger farmers and wealthy landowners. The administration’s budget envisions no countercyclical payments being made to producers in ﬁscal 2012 because crop prices were forecast to remain well above levels required to trigger the payments. Countercyclical payments were estimated at $189 million in ﬁscal 2011 and were $903 million in ﬁscal 2010. The budget for the marketing assistance loan program in 2012 was proposed at $21 million, down from an estimated $25 million in outlays in ﬁscal 2011 and compared with $316 million in ﬁscal 2010. Again, with prices so high, not many producers were expected to make use of the program that allows them to take out nonrecourse but easily redeemable loans with their crop as collateral. The president’s budget aimed to fully fund the nation’s nutrition and food assistance programs, which were projected to account for 74% of all outlays during ﬁscal 2012.

The budget proposed ﬁscal 2012 funding for the mandatory Supplemental Nutrition Assistance Program (formerly the Food Stamp program) at $73,184 million, up 6% from an estimated $68,893 million in ﬁscal 2011 and compared with an enacted level of $58,278 million in ﬁscal 2010. The U.S.D.A. noted the budget anticipates participation leveling out at 45 million persons in ﬁscal 2011 and then declining slightly in 2012 although still rounding to 45 million. The 2012 budget also called for $11,910 million in additional SNAP beneﬁts required under the 2009 economic recovery act compared with $10,744 million in ﬁscal 2011 and $10,781 million in ﬁscal 2010. The 2009 economic recovery act increased the maximum SNAP allotment by 13.6% effective April 2009, a level to remain constant until the statutory SNAP beneﬁt cost-of-living adjustment increased beneﬁts above the recovery act levels, or Oct. 31, 2013, whichever comes ﬁrst. Consequently the department anticipated the average per-person beneﬁt will remain relatively constant from ﬁscal 2010 to 2012. The administration said it would seek legislative language to extend the recovery act provision that eliminates the time limits for able-bodied adults without dependents for an additional year for a one-time cost of $92 million in ﬁscal 2012. Also, the administration proposed restoration of SNAP beneﬁt cuts included in the Healthy, Hunger-Free Kids Act of 2010, which accelerated the sunset date of the SNAP recovery beneﬁts to Oct. 31, 2013. The administration wants the sunset date to revert to March 31, 2014. This would not affect the ﬁscal 2012 budget. The budget proposed to fully fund child nutrition programs, including the school lunch and school breakfast programs, in ﬁscal 2012 at $18,959 million, up 9% from an estimated $17,473 million in ﬁscal 2011 and compared with an enacted $16,891 million in ﬁscal 2010. The 2012 budget funds changes to child nutrition programs required under the Healthy, HungerFree Kids Act. The budget would provide funding totaling $7,390 million to the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), up 2% from an estimated $7,252 million in spending in ﬁscal 2011 and an enacted $7,252 million in ﬁscal 2010. The WIC program is the U.S.D.A.’s largest
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Milling & Baking News - February 22, 2011

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