John Block Reports from Washington

Hello everybody out there in farm country. This radio commentary is brought to you by the Renewable Fuels Association, Monsanto, and John Deere. They are all friends, supporters, and allies of a healthy farm economy and prosperous rural America. Thank you.

And now for today’s commentary—

President Obama has asked the Congressional bipartisan “super committee” to fashion legislation to cut our nation’s debt by 3 trillion dollars over the next 10 years. As part of that plan, the Department of Agriculture is asked to slash spending by 33 billion dollars over the next decade. When you look at some of the details of the Administration’s recommendations, you can’t help but notice that all of the ag cuts are coming out of the farm side of the USDA budget. This focus on the farming side jumps out considering that 80% of USDA’s spending is for food and nutrition programs, not farm programs. We have 45 million people on food stamps and we have growing fraud problems in those programs. We could use more investigation and oversight to save some money there.

The big money savings, however, is in the President’s plan to cut 30 billion dollars of direct farm payments. I don’t have a problem with cutting direct payments. They cannot be justified any longer. Farmers do not have to do anything to get the money. It is automatic depending on crop acres. I think direct payments should be eliminated.

The Administration plans to take a big chunk out of crop insurance – as much as 8 billion dollars. No doubt about it. Farm programs will take a big hit. I expect that some kind of crop insurance may be about the last bit of safety net that agriculture will be able to save. A crop insurance cut is hard to justify.

The President does not target the Conservation Program to save money. He should. If we are worried about producing enough food for a hungry world, then take a look – we have 30 million acres in a conservation reserve. Half of those acres – 15 million – could come out of the reserve and be put into crops without really doing any serious harm to land conservation. That could save a big chunk of money. I am a big supporter of conversation. The Conservation Reserve Program was started when I was Secretary of Agriculture but the time has come to pare it back.

Although the farming industry has become accustomed over time to the old farm programs, these are different times. Net farm income this year has jumped 24% to a new record of more than 100 billion dollars. Crop receipts are up 19%. Livestock receipts up 16%.

The public press is hammering at us to cut back farm subsidies. If there ever was a time for reform, this is it.

My final observation is – don’t get too concerned yet. We don’t know if the “special committee” will get anything done; and if they do, what it will be.

In closing, I would encourage you to access my website which archives my radio commentaries dating back 10 years and will go back 20 years when complete. Check on what I said back then. Go to www.johnblockreports.com.

Until next week, I am John Block in Washington.