By MICHELE F. MIHALJEVICH
Indiana Correspondent

WASHINGTON, D.C. — After Congress reached a compromise last week on a federal debt ceiling agreement, officials with corn, soybean and wheat organizations were left wondering how potential future funding cuts will affect the farmers they represent.
Had President Obama and Congress not come to an agreement to raise the debt ceiling, the nation could have defaulted on its debt. Under the plan signed Aug. 2 by the president, $900 billion in discretionary funding will be cut from various departments over a 10-year period.

In addition, a committee of 12 members of Congress – six Republicans and six Democrats – will be tasked with reducing the deficit by $1.5 trillion over the next decade. The committee’s recommendations are due by Nov. 23 and must be voted on by Congress by Dec. 23.

The plan allows the president to immediately increase the debt ceiling by $400 billion. It also calls for an additional $500 billion increase if a Congressional resolution of disapproval isn’t enacted.
“We’re concerned about every program because every program is subject to being cut,” said Jon Doggett, vice president of public policy with the National Corn Growers Assoc. “As Americans, we understand that everyone needs to readjust their involvement with the federal government.

“The top priorities of corn growers are crop insurance, crop insurance – and then there’s crop insurance. The most important thing for our growers is they must have a way to manage the risk.”
Doggett doesn’t see crop insurance taking a big hit in the budget process, in part because its basics are pretty easy to explain to most people.

The budget-cutting process shouldn’t affect ethanol production as long as the federal Renewable Fuel Standard (RFS) remains, Doggett noted.

The 2007 energy bill included a clause allowing for the relaxing of the fuel standard if there were a significant shortage of corn, but Doggett said the administration and the U.S. Environmental Protection Agency administrator understand the significance of ethanol to rural America.

The federal RFS requires 36 billion gallons of various renewable fuels to be blended into gasoline by 2022.

In addition to crop insurance, Dana Peterson, CEO for the National Assoc. of Wheat Growers (NAWG), said its leaders are also watching the status of research funding.

“The House Appropriations Committee pretty much slashed and burned some of the research budget. We’re extremely concerned about that,” she said.

NAWG officials have heard there’s no intention to cut more from the USDA budget as a part of the $900 billion in cuts to be made in discretionary funding, Peterson said, adding there’s still a lot of uncertainty in Washington.

“Nothing will really be known until after the committee is formed,” she explained. “And we’ll know more about the $900 billion in cuts after Congress comes back from its recess. It’s all a concern for us.”

The process of reducing the government’s debt isn’t going to be a short-term situation, said Steve Wellman, first vice president of the American Soybean Assoc. (ASA).

“There are tough questions to be answered and tough cuts to be made,” he stated. “Cuts in agriculture could range from $11 billion to $48 billion over a 10-year period. We’ll continue to work with Congressional leadership because there are certain areas we definitely need to protect.”

For soybean growers, the continuation of a strong crop insurance program is important, as are programs such as the USDA Foreign Agriculture Service that help in promoting the export of U.S. products, he explained.

“We have to be careful those areas are still there to grow and maintain our markets,” he said.

“In addition, we want to protect conservation programs on working farmland. It’s important to have those programs. We’re confident there will be cuts in agricultural spending. We just don’t know where those cuts will come from.”

NAWG is asking wheat growers to contact their district and state leaders to express their thoughts on the budget process, Peterson added.

“Rural communities are fairly insulated from the economic disaster, and that’s a safety net for farmers,” she noted.

“We want to share with members of Congress the good that agricultural programs have done the last few years. Agriculture is being very wise with the dollars being spent.”

With Congress on a recess, Wellman said it’s a perfect time for soybean growers to talk with their representatives face-to-face at meetings in their home districts. “We also encourage our members to share their concerns with their state associations, who will in turn share with ASA directors and leadership,” he said.
Regardless of future budget cuts, farmers will continue to do their jobs, Doggett noted. “It’s easy for us in agriculture to look at the downside, but we’re getting really good prices and people are making money. We’re feeding a lot more people than we’ve ever done before,” he said.

“We have a lot of opportunities and we don’t have to always look to the federal government for help. We’ll continue to do what we do best and that’s feed people.”

For some broader details on potential cuts to ag funding, refer to a related article on page 10 of this issue.