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February 15, 2002
 

Bush ag budget proposal detailed

While President George Bush's proposed fiscal year 2003 budget focused on increased funds to battle terrorism and boost homeland security, Agriculture Secretary Ann Veneman focused Feb. 4 on specifics of the Bush administration's USDA budget proposal. According to Veneman, the budget proposal includes full funding for farm safety net programs, substantial increases for homeland security, funds meat inspection programs at record levels, increases spending for international trade and provides greater resources for low-income Americans who need food assistance.

"The proposed budget reflects the Bush Administration's commitment to support an additional $73.5 billion over 10 years for farm programs," Veneman said. "This budget supports strong farm programs, helps protect the food supply and helps low-income Americans in need of assistance."

Veneman announced that the budget proposes a $146 million increase for programs to: protect the nation's food supply from animal and plant pests and diseases; strengthen food safety programs; and support specific research activities. In addition, $41 billion for domestic nutrition assistance programs and more than $2 billion in contingency funds to cover any unanticipated increases in domestic feeding program participation levels is proposed. In total, the fiscal year 2003 budget calls for $74.4 billion, $2 billion less than was spent last year.

Veneman said that the proposed budget reduces funding in some areas, including elimination of earmarked research projects so that peer-reviewed and national priority research work could be increased. The budget also examines the programs and services USDA manages and proposes several management initiatives to better integrate computer systems and technology.

Checkoff challenge settlement withdrawn

The Campaign for Family Farms (CFF) asked the federal trial court to dismiss its claim that Agriculture Secretary Ann Veneman's decision in February 2001 to continue the pork checkoff program was "arbitrary and capricious."

The federal court ruled last December that Veneman acted in accordance with the law when she entered into a settlement agreement with the Michigan Pork Producers Association, the National Pork Producers Council (NPPC) and three Michigan pork producers continuing the pork checkoff program.

Dismissal of the claim ends the remaining legal challenge to the settlement agreement in the trial court.

"For more than two years, CFF has been declaring that enough valid petitions were submitted to USDA," NPPC President Barb Determan said. "This was their chance to prove it and they walked away."

Trade barriers prevent exports to Cuba

A recent study at Texas A&M University indicates that Texas could ship more than $53 million in additional exports, leading to the creation of 1,400 new jobs if trade barriers were lifted with Cuba.

Dr. Parr Rosson, director of the Center for North American Studies at Texas A&M, and Flynn Adcock, economist and research associate at Texas A&M, found that producers of beef, rice, poultry, forest products, wheat and cotton would be those to gain the most from trade activity.

The study, "Economic Impacts of U.S. Agricultural Exports to Cuba," was commissioned by the Washington-based Cuba Policy Foundation, a non-profit organization.

Gains in new business for animal fats/oils and rice would be the highest among all of the commodities, reaching $11.67 million and $9 million, respectively; followed by beef ($8 million), chicken meat ($6 million), softwood logs and plywood ($6.5 million), wheat and flower ($3.3 million) and cotton ($3 million). The study's moderate export growth forecast, which factors in limited easing of trade restrictions, shows Texas could export an additional $22 million in ag products.

"Texas producers would benefit in commodities such as rice, animal fats and oils, beef, chicken, wheat and wheat flour, as well as cotton," Rosson said. "An additional $50 million would be spent to produce the above products, and that includes everything from input suppliers to retail trade. Overall, there would be a total economic impact of $70 million."

Nationally, the study indicates U.S. farmers could gain up to $3.6 billion in economic activity with Cuba if trade, travel, and investment sanctions against the communist nation are lifted.

"Before the embargo in 1962, Cuba was one of the biggest markets for rice and beef," Rosson said. "Cuba has one of the highest literacy rates, more than 96 percent, and a high-skilled workforce of any country in Latin America. The potential is there for significant growth in trade."

Notable Quotables

"Only repeal can erase the burden and uncertainties of estate tax planning. Many farmers and ranchers feel compelled to spend money for estate planning, an expense that is a drain on ongoing farm operations. And, no one can guarantee that all their efforts will save their farms when they die.

"Farms are capital-intensive businesses whose assets are not easily converted into cash. In order to generate the funds that are needed to pay hefty death taxes, heirs may need to sell part of their businesses. When too many parts are sold, the economic viability of the farm is destroyed."

—AFBF President Bob Stallman, in commending President Bush's call for the end of the "death tax" in his State of the Union speech, and in urging the Senate to follow that lead by permanently repealing estate taxes.