House and Senate Agriculture Committee leaders submitted detailed policy recommendations to the Joint Select Committee on Deficit Reduction. The recommendations detail policy changes to begin in 2013 that are necessary to achieve the $23 billion in budget deficit reduction recommended earlier by the leadership of the Agriculture Committees. The recommendations, which address every title of farm law, could be considered by the 12 members of the Joint Committee for inclusion in an overall deficit reduction package. The members of the Joint Committee are not required to accept the recommendations though bipartisan support for this package should provide the Joint Committee with strong motivation to seriously consider it.
The Joint Committee has until midnight on Nov. 23 to produce a plan to reduce the deficit by $1.2 trillion over the next 10 years beginning with 2013 or sequestration is triggered on Jan. 1, 2013. It is uncertain if the Joint Committee will produce a plan and if the plan will include the detailed recommendations of the agriculture leaders.
The proposals by the Agriculture Committees for future commodity programs are as follows: grain oilseed, peanut and rice producers will have an option of a revenue program (Ag Risk Coverage or ARC) or a target price program. ARC covers revenue losses that exceed 13 percent with a maximum payment of 12 percent of target revenue and is paid on 60 percent of planted acres. Upland cotton producers will have the option to purchase revenue insurance that covers losses exceeding 10 percent of target revenue with a maximum indemnity of 20 percent of target revenue based on 100 percent of planted acres. Marketing loans will continue to be available. The limitation on ARC program benefits will be $105,000 per legal entity. Marketing loan gains continue to be unlimited. The adjusted gross income test for eligibility for ARC and marketing loans will be $950,000. Indemnities under crop insurance programs are not subject to the limits or means tests.
Most conservation programs - EQIP, CSP and others - are continued with slight modifications. The CRP acreage enrollment cap will be gradually reduced from the current level of 32 million acres to 25 million acres. The Market Access Program (MAP) is funded at $200 million annually through 2017, Foreign Market Development (FMD) is authorized at $34.5 million annually, and GSM export credit guarantees are continued at current levels.
Additional details are available on the NCC’s website at www.cotton.org/issues/2011/upload/11supercommitteefarmbillrecs.pdf.