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May 18, 2001

Congress reaches
ag budget agreement

In a federal budget agreement reached May 2, U.S. farmers may anticipate receiving $79 billion in aid over the next 11 years. The agreement includes an additional $5.85 billion this year plus $73.5 billion for fiscal years 2002-2011.

In a letter sent to the full House and Senate, the American Farm Bureau Federation expressed concern that the 2002 budget resolution only included the $5.85 billion in additional agricultural spending for low-income assistance this year.

"America's farmers and ranchers are facing the fourth consecutive year of low prices," the letter stated. "They continue to experience rising input costs and continued low prices. While they prefer to receive their income from the market, additional federal assistance is necessary until the market conditions improve or we can pass a farm bill with an improved safety net."

However, House Agriculture Committee Chairman Larry Combest (R-Texas) said the $79 billion committed to agriculture will provide sufficient funding to address income shortfalls for producers' 2001 crop year, as well as provide stronger and predictable farm policy for the future.

"This budget provides an unprecedented increase for agriculture—nearly doubling the amount available to be spent for farm programs," he said. "I am extremely pleased to have the resources necessary to craft a stronger, more predictable farm safety net for the future."

"The commitment from House Agriculture Committee members focuses first on producers' goals for flexible and predictable farm policy," the House Ag Committee chairman said. "Farmer and commodity groups have detailed the policy needs. Congress has again proven support for rural America in this budget, and the House Ag Committee can now move to complete the rewrite of farm policy this summer."

The House Agriculture Committee members have completed more than 30 hours of hearings on upcoming farm policy.

When Congress began reviewing the federal budget in February, AFBF, joined by 22 other farm groups, made a funding request for $9 billion in emergency federal income assistance during the 2001 fiscal year.

Later, in testimony before the House Agriculture Committee, AFBF urged legislators to consider an additional $12 billion per year that would be needed for Farm Bureau's overall farm bill proposal, starting in fiscal 2003 (or in fiscal 2002 if the new farm bill is completed earlier). Farm Bureau has also recommended that up to $1.5 billion a year be authorized on as-needed basis for counter-cyclical payments to producers of fruits and vegetables.