With budget deficits and debt ceilings serving as the backdrop, the House Appropriations Committee this week released a subcommittee draft of the fiscal year (FY) 2012 Agriculture Appropriations bill. While the draft proposal is light on dairy specifics, Dairy Profit Weekly editor Dave Natzke said it may offer some insights. With Republicans representing the majority on all House committees, the overriding theme is reduced spending.
“The proposal was scheduled to be marked up in the agriculture subcommittee this week, so we could start to see more dairy detail,” Natzke said. According to the draft, overall spending for agencies and programs covering agriculture will receive about $126 billion in discretionary and mandatory funding in FY 2012, down about $2.7 billion from this year, and $7 billion less than President Obama requested in his budget proposal.
Undoubtedly, dairy will face its share of those cuts. For example, the proposal reduces the USDA’s Risk Management Agency budget, which could negatively impact the Livestock Gross Margin-Dairy income margin insurance program, which ran out of money just half-way through this year.
“Many of your urban listeners might not realize it, but feeding and nutrition programs make up nearly three-quarters of USDA’s budget, and those are also cut, which could impact dairy in a couple of ways,” he said.
First, dairy products make up a piece of food and nutrition programs, and cuts could reduce dairy product sales.
Second, support of food and nutrition programs has traditionally created a congressional coalition in support of farm policy. However, that coalition could fracture under the pressure of intense budget fighting, as food and farm interests reach for the same piece of budget pie.
Agricultural research, animal and plant health inspection, rural development and conservation programs also face cuts under the plan.
In any event, a final budget is a likely a long ways away, especially with the pending rewrite of the 2012 Farm Bill and, of course, next year’s national elections looming.