President Trump released his $4.7 trillion Fiscal Year 2020 budget this week with proposed increases in defense spending and $8.6 billion for the Mexican border wall. The proposed budget would cut spending for Medicaid, agriculture, environmental protection, transportation, education and other non-defense departments and agencies.
USDA would be one of the departments hardest hit by President Trump’s proposal. The budget proposes cutting agriculture by 15% with major cuts in crop insurance, conservation and the Supplemental Nutrition Assistance Program, and includes stricter means testing for commodity programs. Many of the budget proposals were soundly rejected during consideration of the 2018 farm bill.
Crop insurance: The administration is proposing a 31% cut in the current crop insurance program. Producers would pay a larger share of crop insurance premiums going from the current 38% to 52% under the proposed budget. A 12% cap would be placed on insurance company underwriting gains. Farmers with an adjusted gross income over $500,000 would not be able to participate in the crop insurance program.
SNAP: The farm bill fight over work requirements for SNAP recipients will continue under the proposed budget. The budget proposes tightening the SNAP work requirements by requiring nearly all able-bodied adults up to the age of 65 to work or be in an approved training program. Current work requirements are limited to able-bodied adults without dependents at home and are under 50 years old. Also, the budget is proposing again the “Harvest Box” in which a portion of SNAP benefits would be in commodities. This was suggested last year by the USDA and was widely criticized.
Commodity programs: The means test for commodity programs would be lowered from $900,000 to $500,000 AGI.
Programs eliminated: The budget proposes eliminating a number of USDA programs including Rural Business-Cooperative Services programs, Single Family Housing Direct Loan program, McGovern-Dole International Food and Education Program, Food for Progress and school equipment grants.
User fees: The administration’s FY ’20 budget is proposing Food Safety Inspection Service user fees to cover all domestic inspection, import re-inspection and most of the central operations costs for federal, state and international inspection programs for meat, poultry and egg products. User fees are also proposed for animal welfare, veterinary biologics, and biotechnology regulatory services. Congress will have to approve legislation to implement these user fees which is not expected to happen.
Congressional indications are this budget is dead on arrival.
Effort to extend biodiesel tax credits
Congressmen Darin LaHood (R-IL) and Dave Loebsack (D-IA) have been joined by 42 congressional members in a bipartisan effort for a multi-year extension of the biodiesel tax credit.
In a letter to House leadership, the members say, “Biodiesel production could add 63 cents of value to every bushel of soybeans. That value is especially important right now, when farm income is at its lowest point in more than a decade, crop prices are below the cost of production, and farmers are bearing the brunt of ongoing trade disputes. We strongly support a multi-year extension of the incentive to provide the policy certainty necessary to help the biodiesel industry and rural economies continue to grow.”
EPA proposes allowing year-round E15
vironmental Protection Agency released its proposed rule that would allow for year-round sales of E15. Currently, E15 cannot be sold during the summer months, June 1 through Sept. 15.
The National Corn Growers Association says, “Allowing year-round sales of higher blends of ethanol not only grows a domestic market for farmers, but E15 gives consumers more choice at the pump, a lower price option and greater environmental benefits from a cleaner fuel. It’s time to remove the barrier to all of these benefits.”
The proposed rule also makes proposed reforms to Renewable Identification Numbers markets including:
- Prohibiting certain parties from being able to purchase separated RINs;
- Requiring public disclosure when RIN holdings exceed specified thresholds;
- Limiting the length of time a non-obligated party can hold RINs; and
- Increasing the compliance frequency of the program from once annually to quarterly.
The EPA plans to hold a public meeting on March 29. Also, the public comment period on the proposed rule ends on April 29.