USDA defers farm payments to deal with sequester
March 21, 2013 | 05:21 PM
The Agriculture Department’s Farm Service Agency temporarily suspended disbursement of payments for many FSA programs starting on March 1 as part of reducing expenditures that went into effect under the sequestration provision of the Budget Control Act, a USDA source said today.
USDA is authorized to use a limited interchange authority within FSA programs that allows the transfer of funds from direct payments to other FSA programs so that the effects of the reductions are not felt in those programs, but there is a 30-day Congressional notification period that must pass before the agency can move forward with this transfer, the source explained.
USDA notified Congress on March 19 of its intention to transfer money from the direct payment program to other FSA programs. This would have the result of capturing the savings required by the sequester by reducing payments made through the direct payment program account by up to 8.5 percent.
Therefore, payments in the following programs will continue to be deferred for the next 30 days: 2011 Supplemental Revenue Assistance Payments Program (SURE), Noninsured Crop Disaster Assistance Program (NAP) for both 2012 and 2013 crop years, and the Milk Income Loss Contract Program (MILC).
After 30 days, FSA intends to resume making these program payments in full.
“While USDA’s efforts will minimize disruption to the extent possible, we cannot mitigate the negative effects that cuts of this magnitude will have on our mission,” a spokeswoman for Agriculture Secretary Tom Vilsack said. “We continue to urge Congress to replace sequestration with balanced deficit reduction.”
Earlier this week, Vilsack told reporters that 350,000 farmers would be required to repay small portions of payments under the SURE, NAP and MILC programs and that USDA would handle those repayments by reducing the direct payments that most of these producers get.
Cutting back the direct payments would reduce both farmers’ and USDA’s adminstrative costs, Vilsack said.
USDA is authorized to use a limited interchange authority within FSA programs that allows the transfer of funds from direct payments to other FSA programs so that the effects of the reductions are not felt in those programs, but there is a 30-day Congressional notification period that must pass before the agency can move forward with this transfer, the source explained.
USDA notified Congress on March 19 of its intention to transfer money from the direct payment program to other FSA programs. This would have the result of capturing the savings required by the sequester by reducing payments made through the direct payment program account by up to 8.5 percent.
Therefore, payments in the following programs will continue to be deferred for the next 30 days: 2011 Supplemental Revenue Assistance Payments Program (SURE), Noninsured Crop Disaster Assistance Program (NAP) for both 2012 and 2013 crop years, and the Milk Income Loss Contract Program (MILC).
After 30 days, FSA intends to resume making these program payments in full.
“While USDA’s efforts will minimize disruption to the extent possible, we cannot mitigate the negative effects that cuts of this magnitude will have on our mission,” a spokeswoman for Agriculture Secretary Tom Vilsack said. “We continue to urge Congress to replace sequestration with balanced deficit reduction.”
Earlier this week, Vilsack told reporters that 350,000 farmers would be required to repay small portions of payments under the SURE, NAP and MILC programs and that USDA would handle those repayments by reducing the direct payments that most of these producers get.
Cutting back the direct payments would reduce both farmers’ and USDA’s adminstrative costs, Vilsack said.