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New debt ceiling raises uncertainty in future funding of ag spending

by Joan Murphy | August 04, 2011

WASHINGTON — The hard-fought budget ceiling bill President Obama signed Aug. 2 may have implications for agriculture programs, spending at the Food & Drug Administration and the farm bill, but it’s still too early to tell, according to produce industry sources.

The new law sets up a two-part process for cutting spending and avoiding a debt-ceiling crisis. For the first part, Congress will follow a 10-year spending cap that would generate nearly $1 trillion in deficit reduction.

But the second part, where Congress creates a 12-member bipartisan committee to recommend an additional $1.5 trillion in cuts over the next decade, is likely to put the squeeze on federal discretionary programs.

The “super committee” must come up with a plan by Nov. 23 and Congress must approve it by Dec. 23 or face across-the-board cuts.

There will be no immediate impact on agriculture, predicted Robert Guenther, senior vice president of public policy for United Fresh Produce Association.

But it may accelerate discussion of the 2012 farm bill to get it passed this year, a move favored by the produce industry group, Mr. Guenther said.

He said that he hopes the House and Senate agriculture committees charged with meeting the budget targets set by the super committee make fair, not disproportionate cuts, on farm programs later this year.

“We can work in that environment,” he added.

But most sources agree that there are many unknowns about how federal regulatory programs, such as FDA’s fledgling Food Safety Modernization Act, agricultural research or specialty crop grants, will fare if Congress hones in on discretionary spending.

The debt deal may require up to a 20 percent cut in FDA spending at a time when the agency was asking for a $500 million increase for its food program, said a former FDA official.

A shortage of funds could affect enforcement of FDA food-safety programs, Mr. Guenther added.