×

Rural America and farm sector to take a hit with Trump's budget plan

Rural America and the farming region where President Donald Trump found some of his strongest support would take a big hit under the White House's fiscal 2018 budget blueprint.

Lawmakers on both sides of the aisle were critical of the plan's cuts to rural and farm programs.

In particular, the U.S. Department of Agriculture would see a whopping 21 percent cut in discretionary spending, including reduced funding for water programs, statistical areas and staffing of its local Farm Service Agency offices around the country. There would be cutbacks in discretionary activities in rural development and rural business too.

Trump's election showed he had strong support in the nation's heartland and key farming regions. Rural areas facing economic hardship due to lower crop prices and weaker farmer incomes turned out in big numbers for Trump.

"Our members across the country know that we have to balance the budget," said John Newton, director of market intelligence for the American Farm Bureau Federation, the nation's largest farm organization. But the trade organization still opposes cuts to agricultural programs.

According to the so-called skinny budget, Trump requests $17.9 billion in discretionary spending, or a $4.7 billion decrease from the annualized continuing resolution level of government funding.

House Ag Committee Ranking Member Collin Peterson of Minnesota said the cuts in USDA are bad for the heartland. "It demonstrates a lack of understanding of farm programs and their impact on rural America," he said.

Added Peterson, "Cuts to the water and wastewater loan program are wrongly portrayed as duplicative when they are the only ways for small rural communities to update their waste systems. County offices are already understaffed and further cuts would mean private organizations would be tasked with helping farmers navigate farm programs. Again, it's a general lack of understanding of what really takes place in rural America."

USDA is still operating with an acting deputy running the department. Former Georgia Gov. Sonny Perdue was nominated for the Agriculture secretary post but still hasn't been confirmed.

"I hope once an Agriculture secretary is in place that he will be able to explain the value of these programs and services," said Peterson, who is a member of the Minnesota Democratic Farmer Labor Party.

House Agriculture Committee Chairman K. Michael Conaway (R-Texas) also was critical of the Trump plan to slash USDA's budget.

"I am concerned that the cuts, while relatively small in the context of the total federal budget, could hamper some vital work of the department," Conaway said. "I think it is very important to remember that net farm income is down 50 percent from where it stood just four years ago. America's farmers and ranchers are struggling, and we need to be extremely careful not to exacerbate these conditions."

A spokesperson for the USDA said they had no further information to share on details of the budget blueprint or cuts. "The details of the budget should be forthcoming in the next few weeks," the official said in an email response.

Mandatory programs under the USDA such as food stamps, or the federal government's nutrition assistance program, represented more than 80 percent of the department's $156 billion in spending during 2016. Mandatory programs also include child nutrition and school lunch programs.

The Trump administration's fiscal 2018 budget blueprint document said the cuts in discretionary spending at USDA's farm agency centers will streamline county office operations and "re­flect reduced rural development workload, and encourage private sector conservation planning." The USDA operates more than 2,100 farm service centers, with a presence in nearly every rural county.

"Some of those folks [at centers] are boots on the ground representatives of the USDA across the country so that's also something that would be a concern," said Newton. He noted that the centers are located at the county level across the nation and work with individual growers on farm loan programs, marketing loans, commodity support and conservation initiatives, among other things.

While the draft budget calls for cuts in USDA's statistical capabilities, it also said the department would maintain "core" analytical functions.

Even so, it's unclear from Trump's budget exactly where the USDA's statistics capabilities would be cut. The research staff at the department produces regular reports and statistical information about many livestock commodities, including cattle and hogs, as well as major crops such as corn, soybeans, wheat and sugar beets.

"We're not exactly sure what areas of statistics will be cut," said Newton. "But we would be very concerned because all growers rely on market information to make planting and selling and harvesting decisions."

Moreover, he said the USDA research is used to help settle markets and for price discovery to help industry participants.

Back in 2013, sequestration forced funding cuts to the USDA that resulted in the agency suspending a number of statistical estimates and reports. At the time, the agency cut one monthly cattle report and suspended data collection and survey programs for some specialty crops.

"The people at the USDA that I know are probably sweating it now," said David Maloni, chief commodity strategist at the American Restaurant Association.

Maloni said he doesn't expect any major cuts that would affect price reporting or for crop reporting. Instead, the USDA may look to cut where there's some overlap in information.

Overall, the USDA is made up of nearly 30 agencies and offices, and it has nearly 100,000 employees at more than 4,500 locations across the country and overseas. Some USDA employees work in foreign offices to help promote agricultural trade.

Watch: This is a 'heartless budget'