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The federal government has long provided credit assistance to farmers, in response to insufficient lending in rural areas or a desire for targeted lending to disadvantaged groups. One federal lender is the Farm Service Agency (FSA) in the U.S. Department of Agriculture (USDA). It issues direct loans to farmers who cannot qualify for regular credit, and guarantees repayment of loans made by other lenders. Thus, FSA is called a lender of last resort. Of about $240 billion in total farm debt, FSA provides about 2% through direct loans, and guarantees about another 4% of loans. Another federally related lender is the Farm Credit System (FCS), a cooperatively owned, federally chartered lender with a statutory mandate to serve agriculture-related borrowers. FCS makes loans to creditworthy farmers, and is not a lender of last resort. FCS accounts for about 39% of farm debt. Commercial banks are the largest farm lender and hold 44% of total farm debt.
The potential of terrorist attacks against agricultural targets (agroterrorism) is increasingly recognized as a national security threat, especially after the events of September 11, 2001. Agroterrorism is a subset of bioterrorism, and is defined as the deliberate introduction of an animal or plant disease with the goal of generating fear, causing economic losses, and/or undermining stability. Attacks against agriculture are not new, and have been conducted or considered by both nation-states and substate organizations throughout history. The results of an agroterrorist attack may include major economic crises in the agricultural and food industries, loss of confidence in government, and possibly human casualties. Humans could be at risk in terms of food safety or public health, especially if the chosen disease is transmissible to humans (zoonotic). Public opinion may be particularly sensitive to a deliberate outbreak of disease affecting the food supply. Public confidence in government could be eroded if authorities appear unable to prevent such an attack or to protect the population's food supply. Agriculture has several characteristics that pose unique problems for managing the threat. Agricultural production is geographically disbursed in unsecured environments. Livestock are frequently concentrated in confined locations, and then transported and commingled with other herds. Pest and disease outbreaks can quickly halt economically important exports. Many veterinarians lack experience with foreign animal diseases that are resilient and endemic in foreign countries. Agriculture and food production generally have received less attention in counter-terrorism and homeland security efforts. But more recently, agriculture has garnered more attention in the expanding field of terrorism studies. Laboratory and response systems are being upgraded to address the reality of agroterrorism.
The desire by many to redesign farm policy and reallocate the remaining farm bill baseline-in a sequestration and deficit reduction environment-is driving much of the farm bill debate this year. Several high-profile congressional and Administration proposals for deficit reduction have specifically targeted agricultural programs with mandatory funding. The political dynamics of sequestration and broader deficit reduction goals leave open difficult questions about how much and when the farm bill baseline may be reduced. In this context, Congress faces difficult choices about how much total support to provide for agriculture, and how to allocate that support among competing constituencies. Funding to write the next farm bill is based on Congressional Budget Office (CBO) baseline projections of the cost of farm bill programs, and on varying budgetary assumptions about whether programs will continue. The CBO baseline is an estimation (projection) at a particular point in time of what federal spending on mandatory programs likely would be under current law. In May 2013, CBO projected that the current farm bill programs, if they were to continue beyond the 2008 farm bill, would cost $973 billion over the next 10 years (FY2014-FY2023). This baseline estimate already has been reduced by $6.4 billion over the same period because of the sequestration ordered on March 1, 2013. When new bills are proposed that affect mandatory spending, their impact (or "score") is measured as a difference from the baseline. This baseline and scoring process sets the mandatory budget for considering a new farm bill. The Senate-reported farm bill, S. 954, would reduce spending by $17.9 billion (-1.8%); and the House-reported bill, H.R. 1947, would reduce it by $33.4 billion (-3.4%). CBO noted that if sequestration was repealed and the baseline was increased by the $6.4 billion adjustment that has been taken, then the farm bill proposals would reduce spending by $24 billion (Senate) and $40 billion (House) over the next 10 years. Moreover, some popular 2008 farm bill programs do not have a baseline to continue, and will require additional budgetary offsets if they are included in a new farm bill.
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