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Agriculture

Major cut proposed for rural development
USDA shift from grants to loan guarantees continues

The budget calls for terminating or reducing funding for 33 USDA programs for a savings of $2.3 billion. The proposal includes $2.1 billion for rural development programs, a cut of nearly $300 million. Beyond the funding reductions, the budget anticipates accelerating a recent trend of shifting USDA community assistance programs from grants to loan guarantees.

The budget is a mixed bag for land conservation programs. The most significant reduction is for the Wetlands Reserve Program which will receive a 60% reduction in funding as the Administration is assuming it will reach its acreage enrollment cap with $181 million. The budget does not propose to fund additional watershed operations projects and instead redirects those funds to other agency programs. More funds are proposed for the Environmental Quality Incentives Program (EQIP) than were received in the FY08 omnibus, but the budget proposes to permanently cancel mandatory funds in excess of $1.05 billion which is what was allocated for 2009. The budget does not align with pending Farm Bill versions approved by the House and Senate and now in conference. The urban forestry program is slated for a severe cut in funding.

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