The old maxim among carpenters is “measure twice, cut once” but the Office of Management and Budget’s (OMB) proposed budget for Fiscal Year 2020 turns the saying on its head.
U.S. agriculture is entering its 6th straight year of recession and farmers are increasingly calling on Washington to act to head off the oncoming farm financial crisis if conditions continue unabated.
Escalating debt-to-asset ratios reported by USDA last week and rising farm bankruptcies have spurred an increasing number of farm and ranch leaders to call for an extended Market Facilitation Program or congressionally enacted relief, whether in the form of a strengthened Farm Bill safety net or one-time legislative relief.
Rural leaders are anxiously anticipating what agriculture lenders are predicting in the event that current conditions persist into next year, concerned that lenders will have to turn away large numbers of farmers and ranchers who will be trying to secure credit to keep their family operations going through these extremely difficult times.
Given these conditions, OMB was certainly out of touch when it proposed deep and harmful cuts to the farm policies this past Monday. It was not just out of touch with conditions unfolding in rural America, but it was completely out of sync with the intent of Congress and the President of the United States as expressed just last December.
For it was just late last year when the 2018 Farm Bill was enacted into law and year-long consideration of that measure resulted in the rejection of the lion’s share of OMB’s latest budget proposals.
Burgeoning annual deficits and debt and decades-long legislative paralysis on tackling fiscal issues certainly explain OMB’s disharmonic budget proposal.
But, explaining is not equivalent to justifying.
First, as previously explained, the proposed cuts could not come at a worse time for agriculture.
Why does this matter?
It matters because agriculture is the driving force in rural America.
However, even beyond rural America, agriculture has proved in the past just how important it is to the national economy.
And that importance can and does swing in both directions — whether it’s offsetting the adverse impacts of lost manufacturing in the early 2000s on the plus side, or the farm economy dragging down the national economy as happened in the mid 1980s on the negative side.
Suffice it to say that undermining the farm safety net, particularly in the current economic environment, would be a colossal mistake.
Second, OMB cannot balance the budget on agriculture any more than the Brits could sink the Bismarck with a BB gun.
Were OMB to eliminate the entire farm safety net, the savings derived from such a move would take 50 years to accrue to a level where it could offset just one year’s annual deficit. So, rather than reflect a serious attempt to eliminate deficits and debt, the deep cuts proposed to the farm safety demonstrate just how unserious the whole effort has become.
The farm safety net represents one third of 1 percent of the entire budget and has proved highly successful over the years in leveraging the safest, most abundant, most affordable food and fiber supply in the world. But eliminating these policies cannot make a dent in the deficit or debt and that much should be obvious to everyone, not least to the country’s official bean counters.
And, finally, we are familiar with the adage that “gratitude is fleeting,” but we had no idea just how fleeting it was.
For it was just 5 short years ago when the Agriculture Committees were called upon to cut $23 billion in spending during debate over the 2014 farm bill — a level of savings that was later upped after passage to more than $100 billion in taxpayer savings.
And it was only three months ago when Congress passed and the President signed into law the 2018 farm bill that was deemed budget neutral, but essentially locked in these $100 billion in savings over the next 10 years.
Were other segments of government to even approach achieving this level of savings, our nation could begin to discuss for the first time since the 1990s the happy subject of what to do with budget surpluses.
To be sure, this OMB is not the first in an administration to produce a miserable agriculture budget totally divorced from reality, nor do we suppose for a moment that it will be the last. But, at a time when America’s farmers and ranchers and rural America are really looking for, hoping for, and needing some good news, misery does not love company.
Congress and the President should not only reject the OMB budget, but they ought to begin to carefully consider how working together they can strengthen the farm safety net to ensure the nation’s farmers and ranchers will be able to weather the current economic storm.
As history has borne out many times, avoiding a farm financial crisis is a whole lot cheaper than ending one.