Direct Payments, which totaled $4.955 bil. in 2013, will decline to $4.936 bil. in 2014. The $370 MILC payment will drop to zero, and the $170 mil. bio-based fuel production program will also go to zero funding.
Total commodity programs drop from $7.290 to $6.541 bil. The CRP program generally holds steady at $2.165 bil. with a $6 mil. increase. Commodity Credit Corporation funding drops from$10.137 bil. to $9.538 bil. to cover those and a wide variety of other FSA programs. Within the cuts to the Direct Payment program, feed grains drop from $2.325 to $2.294 bil., wheat drops from $1.254 to $1.086 bil., and soybeans from $571 mil. to $556 mil. FSA disaster programs have a zero budget for 2014, down from $911 mil. in 2013.
Risk Management Agency
While it is hard to budget for a disaster, the RMA is planning a substantial reduction in indemnity payments for 2014. The budget proposal calls for $11 bil., down from $17 bil. in 2013. Regarding the drought and other natural crop disasters, RMA says, “As of March 25, 2013, based on actual indemnities for crop year 2012 the loss ratio is about 1.44.
At this time, the pace of loss claims for the 2012 crop year is beginning to slow; accordingly, current estimates are that the crop year 2012 loss ratio will reach about 1.5.” The agency says the actual total government cost for the crop insurance program was about $7.6 bil. $4.5 bil. was provided to producers to cover crop loss, and $3.1 bil. went to insurance companies to cover administrative expense.
(That means the crop insurance companies covered the nearly $10 bil. balance of indemnity payments issued for crop loss.)
The budget proposals says, “Since 2009, USDA has helped more than 627,000 rural families buy, refinance, or repair a home, and provided over 15,000 grants and loans to help over 60,000 small rural businesses create and save over 320,000 jobs.” Rural Development contains a number of small programs with funding of $1 to $55 million. However, the guaranteed loans to business and industry program is proposed for funding at $741 mil., down from $776 mil. in 2013. Total funding for Rural Business Service programming is $953 mil. a cut from $1.028 bil. in 2013.
Although the loan program for rural electric utilities drops from $7.024 bil. to $4.0 billion in 2014, the loan program for telecommunications and broadband expansion holds steady at $690 mil. Funding for broadband distance learning is held to $63 mil. in loans at $10 mil. in grants. One of the big program expansions raises funding for loans for water and wastewater from $873 mil in 2013 to $1.2 bil. in 2014. Overall spending on rural utilities drops from $9.259 bil in 2013 to $6.327 bil. in 2014.