Department of Agriculture

Proposed Spending Cuts

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Chris Edwards

May 2010

All agricultural and rural subsidies in the Department of Agriculture’s budget should be abolished to save taxpayers more than $30 billion annually. In addition, agricultural trade barriers should be repealed. Current agricultural and rural policies are economically and environmentally damaging, and they create unfair transfers of wealth.

The department’s food subsidy activities—food stamps, school lunches, and WIC—are properly local and private functions. They should be devolved to the states, with each state determining appropriate policies for its own residents. Such reforms would save federal taxpayers about $98 billion annually. Some states may decide to fund food subsidies on their own, but competition between the states would likely result in smaller, more innovative programs.

Forest Service subsidies to state governments and private businesses should be ended. Congress should also explore options to transfer the national forests to the states or to new independent trusts that would be self-funded from forest-related receipts.

The table shows that these reforms would eliminate more than 90 percent of the USDA’s budget, saving federal taxpayers $131 billion annually, or about $1,100 per U.S. household. Under the proposal, the USDA would retain responsibility for animal and plant health inspections, food safety, grain and packing inspections, and conservation activities.

    
Department of Agriculture
Proposed Spending Cuts
Program Spending in 2010
   
($ million)
Agricultural Subsidies  
 Farm Service Agency $16,584
 Risk Management Agency $7,033
 Foreign Agricultural Service $1,604
 Nat. Inst. of Food and Agriculture $1,483
 Agricultural Research Service $1,369
 Agricultural Marketing Service $1,272
 Agricultural Statistics Service $162
 Economic Research Service $80
Food Subsidies  
 Food Stamp program (SNAP) $72,482
 School Lunch and related programs $17,307
 Nutrition program (WIC) $7,704
 Other $452
Rural Subsidies  
 Rural Housing Service $1,928
 Rural Utilities Service $613
 Rural Business Coop. Service $297
 Rural Development  $296
Forest Service  
 State and private forestry grants $515
 Land acquisition $74
 Explore options to restructure forests n/a
Total proposed cuts $131,255
Total department outlays $142,016
Source: Estimated fiscal year outlays from the Budget of the U.S. Government, FY2011.
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