Budget scenarios, politics complicated for food stamps, crop insurance, farm program payments in 2015
February 02, 2015 |06:00 AM
As the Obama administration prepares to release its fiscal year 2016 budget proposal today and Agriculture Secretary Tom Vilsack plans a briefing for reporters, a series of analyses of the Congressional Budget Office projections released last week show a complicated picture for USDA spending in the coming year that will also complicate any efforts to change those programs.
Conservative Republicans have expressed interest in reducing spending on the Supplemental Nutrition Assistance Program — by far USDA’s biggest program — but CBO said the number of people receiving SNAP (food stamp benefits) fell in 2014 and is expected to continue to decline as the economy improves.
CBO said outlays for SNAP fell by 8 percent in 2014 to $76 billion after having risen each year since 2008, when the most recent recession began.
CBO estimates that the program’s spending will rise modestly this year to $78 billion do to food price increases, and that 46 million people will receive those benefits, but projects that by 2025, 33 million people will be enrolled in SNAP and the program’s outlays will total $75 billion.
Food stamp benefits to children are at an all-time high, the Associated Press reported last week.
Farm bill critics have suggested that any budget reconciliation should include a cut to crop insurance subsidies. The government pays 62 percent of the cost of crop insurance premiums, and the most likely proposal would be to reduce that percentage, especially for the biggest farmers.
But lower crop prices would lead to a reduction in the value of the crop and, in turn, a reduction in the cost of those subsidies, thus complicating the budgetary and policy arguments.
The lower prices could also lead to an increase in the expenditures for the programs for crop farmers in the commodity title of the farm bill, David Rogers wrote in Politico last week.
CBO projections of lower prices also led CBO to project that fewer farmers than expected would choose the Agricultural Risk Coverage-County program and instead select the Price Loss Coverage option, which would make payments based on price, Chris Clayton noted in DTN/The Progressive Farmer last week.
Agricultural economists had expected Midwest farmers to sign up for ARC and southerners to pick PLC. but fewer Midwest farmers may choose ARC if prices for corn and soybeans remain low.
▪ Politico — Payments to farmers may exceed farm bill’s expectations
▪ DTN/The Progressive Farmer — Farm Bill: More Corn in PLC?
▪ Associated Press — Census: 1 in 5 Children on Food Stamps
▪ Congressional Budget Office — The Budget and Economic Outlook: 2015 to 2025
Conservative Republicans have expressed interest in reducing spending on the Supplemental Nutrition Assistance Program — by far USDA’s biggest program — but CBO said the number of people receiving SNAP (food stamp benefits) fell in 2014 and is expected to continue to decline as the economy improves.
CBO said outlays for SNAP fell by 8 percent in 2014 to $76 billion after having risen each year since 2008, when the most recent recession began.
CBO estimates that the program’s spending will rise modestly this year to $78 billion do to food price increases, and that 46 million people will receive those benefits, but projects that by 2025, 33 million people will be enrolled in SNAP and the program’s outlays will total $75 billion.
Food stamp benefits to children are at an all-time high, the Associated Press reported last week.
Farm bill critics have suggested that any budget reconciliation should include a cut to crop insurance subsidies. The government pays 62 percent of the cost of crop insurance premiums, and the most likely proposal would be to reduce that percentage, especially for the biggest farmers.
But lower crop prices would lead to a reduction in the value of the crop and, in turn, a reduction in the cost of those subsidies, thus complicating the budgetary and policy arguments.
The lower prices could also lead to an increase in the expenditures for the programs for crop farmers in the commodity title of the farm bill, David Rogers wrote in Politico last week.
CBO projections of lower prices also led CBO to project that fewer farmers than expected would choose the Agricultural Risk Coverage-County program and instead select the Price Loss Coverage option, which would make payments based on price, Chris Clayton noted in DTN/The Progressive Farmer last week.
Agricultural economists had expected Midwest farmers to sign up for ARC and southerners to pick PLC. but fewer Midwest farmers may choose ARC if prices for corn and soybeans remain low.
▪ Politico — Payments to farmers may exceed farm bill’s expectations
▪ DTN/The Progressive Farmer — Farm Bill: More Corn in PLC?
▪ Associated Press — Census: 1 in 5 Children on Food Stamps
▪ Congressional Budget Office — The Budget and Economic Outlook: 2015 to 2025
