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Lugar, Stutzman Target $40 billion in USDA Cuts to Help Meet Federal Deficit Reduction Goals

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U.S. Sen. Dick Lugar (R-IN) and Cong. Marlin Stutzman (R, IN-3rd) introduced a farm bill today that would save the taxpayers $40 billion.

The Rural Economic Farm and Ranch Sustainability and Hunger Act (REFRESH) would reform farm programs, cutting $16 billion, a 24.5 percent reduction. Conservation programs would be updated and streamlined for a savings of $11.3 billion, a 17.6 percent reduction. Nutrition program eligibility loopholes would be closed saving $13.9 billion, only a 2 percent reduction. Roughly two-thirds of the savings would come from farm and conservation programs, and a third from nutrition programs, which represent three-fourths of the USDA budget.

"This bill provides good farm and nutrition policy and saves $40 billion. Farm Bill politics has long frustrated reform efforts by myself and others. The current urgency to meet our deficit reduction targets gives us the chance to make smart changes. We offer our bill as a thoughtful option for consideration by the House and Senate Agriculture Committees, as well as the Congressional Deficit Reduction "Super' Committee charged with making real federal spending cuts by the end of the year," Lugar said.

"Farmers recognize the need to tackle our nation's crippling $14.7 trillion debt. So, our bill saves taxpayers $40 billion. Long before I came to Washington, I've opposed the direct payments that handcuff farmers and manipulate markets. Today, I'm happy to introduce legislation with Senator Lugar that ends those direct payments. After talking with Hoosier farmers, we've proposed genuine safety nets--options that give confidence and expand opportunities for farmers, not outdated systems that restrict their options," Stutzman said.

The Lugar-Stutzman bill would end current farm programs including direct payments to farmers, counter-cyclical payments, the ACRE program and marketing assistance/loan deficiency payments.

The REFRESH bill would establish an aggregate risk and revenue management (ARRM) program that allows producers to protect between 90 percent and 75 percent of their expected crop revenue. All farmers would be able to purchase supplemental revenue insurance that is underwritten by the USDA Risk Management Agency.

Lugar and Stutzman propose repeal of the mandatory federal sugar program, allowing for market pricing of sugar.

Their bill replaces dairy price support (DPPSP) and milk income loss contract (MILC) programs with a voluntary margin protection program that covers 80 percent of the producers' production history when margins fall below $4 per hundred-weight.

Lugar was the author of the Conservation Reserve Program in 1985. The bill was announced on his farm in a press conference with President Reagan's Secretary of Agriculture John Block. "I am proud of the great successes of the Conservation Reserve Program. But there has been shrinking enrollment and our land rehabilitation successes allow more acres to return to production," Lugar said. Currently 29 million acres are enrolled, and that would be reduced to 24 million acres under the bill. Savings would also be found by combining and improving efficiencies in Wetland Reserve Program, the Grasslands Reserve Program, the Farm and Ranch Lands Protection Program, and the Healthy Forest Reserve Program. Similar consolidations and efficiencies would be found in the Environmental Quality Incentives Program (EQIP), Conservation Stewardship Program, the Agricultural Water Enhancement Program, and the Wildlife Habitat Incentive Program (WHIP).

REFRESH would close eligibility loopholes, eliminate government overlap and improve the efficiency of the Supplemental Nutrition Assistance Program. "The savings of $14 billion comes without devastating the program used by as many as 43 million low-income Americans in need of additional food security," Lugar said.

Lugar was Chairman of the Senate Agriculture Nutrition and Forestry Committee in 1996, the last time major reform was done to U.S. farm programs. Known as Freedom-to-Farm, that bill ended Depression-era federal production controls. Lugar first created the idea of whole farm revenue insurance during the 2002 farm bill debate. The alternative was not successful but gained more support as the FRESH Act during the 2007 farm bill debate. This year, farm commodity groups have begun embracing the concept and several versions of it have been introduced. Lugar manages his family's 604-acre Marion County corn, soybean and tree farm.

Congressman Stutzman sits on the House Committees on Budget and Agriculture. An outspoken advocate of agriculture policy reform and a fourth-generation farmer from Howe, Indiana, Stutzman is co-owner of Stutzman Farms. Together, with his father, two brothers, and brother-in-law, the Stutzmans farm 4,000 acres in northern Indiana, growing soybeans, green beans, and seed corn.

A complete bill summary and bill draft may be found at

http://www.lugar.senate.gov/issues/ag/ and www.stutzman.house.gov.


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