President Trump proposes 20%+ cut to USDA 2018 budget
On May 23, U.S. Agriculture Secretary Sonny Perdue announced the proposed 2018 budget for the U.S. Dept. of Agriculture (USDA), an almost 21% reduction and the third-largest percentage cut proposed for any agency, behind the Environmental Protection Agency and the State Department.
On May 23, U.S. Agriculture Secretary Sonny Perdue announced the proposed 2018 budget for the U.S. Dept. of Agriculture (USDA), an almost 21% reduction and the third-largest percentage cut proposed for any agency, behind the Environmental Protection Agency and the State Department. “I don’t think there’s any reason to try to sugar coat this,” said Perdue in a conference call with reporters to discuss the administration’s fiscal 2018 budget proposal for the agency. “I’ve communicated with our team at USDA and just said ‘look, when times are tough we just dig down and do more’—and that’s what we will do here.”
Roughly 82% of the budget, about $117 billion, are for mandatory programs such as the Supplemental Nutrition Assistance Program (SNAP), crop insurance, and some conservation programs. The remaining 18%, about $23 billion, are associated with discretionary programs such as the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC); food safety; rural development loans and grants; research and education; soil and water conservation technical assistance; animal and plant health; management of national forests, wildland fire, and other Forest Service activities; and domestic and international marketing assistance. The department also plans to slash about 5.5% of its total workforce.
Here’s a look at the proposed budget for some of the key USDA departments:
Agricultural Research Service: The budget reduces funding for the ARS by $360 million, or 26%. The agency also plans to shutter 17 research locations out of a total of 90, which includes agriculture laboratories. The budget requests approximately $993 million for ARS research programs, with an emphasis on basic research and efforts to support the transfer of research and development products to industry.
Crop Insurance: The budget proposes a 36% cut in the federally subsidized crop insurance program over the coming decade, a far more sweeping set of reforms than what was proposed during the Obama era. Crop insurance is the largest of USDA’s farm support programs at nearly $8 billion a year. The changes, which would require congressional approval, would limit the ability of large farmers to take advantage of those programs and cut government subsidies by more than $2.5 billion each year. The administration also proposed to limit access to crop subsidies to people with less than $500,000 in adjusted gross income, roughly half the current level.
SNAP: A program seeing one of the largest cuts is the Supplemental Nutrition Assistance Program (SNAP), which is losing $4.6 billion in funding in 2018 and increasing to more than $20 billion annually by 2022. The budget states that participation will fall to an average level of 42.2 million participants per month from 42.8 million in 2017 as the economy improves. Under SNAP’s long-standing rules, benefit amounts are calculated according to an applicant’s income, location, and family size. The proposal would cap the amount that families with six or more family members can receive, at $925 per month.
The budget proposes several reforms to SNAP eligibility and benefit calculations that “will target benefits to the neediest households and encourage work among able-bodied adults, which are expected to save about $75.1 billion over 10 years.” The budget also proposes a state match for SNAP benefit payments, phased in at an average of 10% in 2020 to an average of 25% in 2023. Finally, the budget proposes to establish an application fee for retailers applying to accept SNAP benefits and for retailer reauthorization, which it states will save about $2.4 billion.
WIC: The WIC provides participants with benefits, redeemable at certified WIC retailers, for foods dense in nutrients known to be lacking in the diets of eligible groups. The budget provides $6.15 billion for WIC, a cut of $150 million from the estimated $6.35 billion the department said was budgeted in fiscal 2016. According to the budget, this amount is sufficient based on the estimated 7.2 million low-income women, infants, and children that are expected to participate in the program each month in 2018. In addition, the budget includes a $1 billion cancellation of unobligated balances in WIC, because “the program has experienced a buildup of unused resources from a decline in program costs, driven by an unexpected decrease in both participation and food cost inflation rates.”
Child Nutrition Programs: This budget includes the National School Lunch Program (NSLP), School Breakfast Program (SBP), Summer Food Service (SFSP), Child and Adult Care Food Program (CACFP), and Special Milk Program (SMP). The proposed budget funds these programs “at a level that will support anticipated increases in participation and food cost inflation.” The budget projects serving 5.43 billion lunches and snacks (an increase of 65.6 million, or 1.2%, over the current estimate for 2017) and 2.64 billion breakfasts in schools, 2.25 billion meals in child and adult care centers, and 199.4 million meals through the SFSP. In addition, the budget provides about $23 million to continue the Summer Electronic Benefit Transfer (Summer EBT) demonstration pilots in several states.
FSIS: The budget proposes discretionary funding of approximately $1 billion for the Food Safety Inspection Service (FSIS), which is about $25 million over the 2017 funding level. The budget includes an increase of $15.5 million to support approximately 8,500 field personnel as well as other support personnel. It requests $12.1 million to fill frontline inspection program personnel vacancies. The budget does not include funding for the Siluriformes Inspection Program under FSIS, resulting in a $2.5 million decrease from the 2017 funding level. The Budget proposes to return the function to the Food and Drug Administration (FDA).
The proposed budget also eliminates the country’s flagship program of international food aid, called Food for Peace. The current USDA budget includes $1.7 billion for that program. Also, the McGovern-Dole International Food for Education program would be eliminated, for a savings of about $195 million. The proposed budget cites “lack of evidence that it is being effectively implemented to reduce food insecurity.” George McGovern and Bob Dole, who created the program in 2000, received the 2008 World Food Prize for their efforts to establish this initiative.
The proposed budget will now make its way to Congress for consideration. In the next edition of the IFT Weekly newsletter we will cover the response to this budget proposal, from industry organizations and academics to agricultural leaders.