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By Mike Barnett
Editor
Significant cuts for agriculture in the Bush Administration FY 2006 budget, released Feb. 7, have drawn fire from a number of farm groups, including the American Farm Bureau Federation (AFBF).
The administration has proposed cutting $587 million from farm price support programs. The proposal would cut direct payments by 5 percent across the board, and would cap farm program payment limitations at $250,000, a drop from the current $360,000. The three-entity rule would also be eliminated. The Milk Income Loss Contract program would be extended, but payments reduced. And, under the proposal, the federal crop insurance program would lose $140 million annually, starting next year.
Texas Farm Bureau (TFB), along with AFBF, said the structure and funding of the current farm bill must be maintained.
"Farm planning is a multi-year process," said Steve Pringle, TFB's legislative director. "The 2002 farm bill provided a long-term commitment to our producers. It would be wrong to shift policy before the end of the term provided for in the legislation."
Pringle was especially critical of the payment limitation proposal, noting that the president's proposed budget goes against his own advisory panel's recommendation.
"Following the last farm bill, a payment limitation commission appointed by former Ag Secretary Veneman said that no changes should be made in payment limitations until producers are given time to comply with those changes," Pringle said. "This would put producers in an unfair situation."
The legislative director said Texas would be hit harder by payment limits than any other state because of its high number of cotton and rice producers.
"Those commodities are heavy in terms of production inputs," he said. "They have a high cost of production and, therefore, the assistance levels tend to be higher. The payment limitation will significantly impact Texas producers—moreso than any other state."
Pringle also warned that cuts to the U.S. farm program would place America's farmers and ranchers at a serious competitive disadvantage during World Trade Organization (WTO) agricultural talks.
"U.S. trade negotiators need the full leverage provided by the current structure of our negotiations—in particular the outcome on domestic support commitments, which will set the tone for future farm bills," he said.
The National Cotton Council (NCC) of America, agreed. In a statement released Feb. 8, the Council warned that reductions in U.S. agricultural support prior to the completion of the Doha round of international trade negotiations "is the equivalent of unilateral disarmament."
"Substantial changes in U.S. commodity programs can weaken our negotiating position, undermine current proposals, and send the wrong signal to other WTO member countries," the statement said. "Should the U.S. unilaterally disarm in agriculture, there will be little reason for other countries to reduce subsidies or open their markets to U.S. agricultural products."
The American Farm Bureau Federation, along with a diverse coalition of more than 100 organizations, sent a letter to Agriculture Secretary Mike Johanns voicing concern about the possible agriculture spending reductions prior to the announcement.
According to the coalition letter, reductions or restructuring of the 2002 Farm Bill would "seriously undermine many nutrition, conservation, crop insurance and farm programs that are important to all Americans."
"Many of these critically important programs already have sustained budget reductions in recent years," the letter continued, citing reductions in funding for many discretionary agriculture programs, and reductions of $4 billion in mandatory agriculture spending. "A budget that risks further cuts or structural weakening in these important programs will put at risk the promising environmental benefits of the bill, and the nutritional health of some of the poorest populations in our country.
"With prices for many major commodities falling sharply from last year, reductions to farm programs would come at precisely the time that these supports are most needed for rural America.
"All of the American families and industries impacted by the Agriculture Department's programs have labored hard to work with Congress and USDA to create programs in the farm bill that work for our constituents within the specific budget limits provided by Congress," the statement said, noting that farm bill costs through the past three years were more than $15 billion less than initially projected when Congress passed the 2002 bill.
AFBF's Public Policy Director Mark Masyln specifically addressed his organization's concern with the proposed cuts.
"There's an awful lot that agriculture does for this country that isn't often recognized, whether it's in food and nutrition, in conservation and the environment, or just the fact that American consumers spend 10 cents of every dollar on food...the lowest in the world," he said. "So we're willing to do our part, but we don't want to take a disproportionate share of the cuts."
USA Rice Producers' Group Chairman Jackie Loewer was quick to express disappointment over the 2006 budget proposals, as was Jon Doggett, National Corn Growers Association (NCGA) vice president of public policy.
"We are frustrated with provisions that will alter the terms negotiated in the 2002 farm bill," Loewer said. "Any modification of the terms negotiated in the 2002 farm bill should be discussed only during the reauthorization process for the 2007 farm bill."
Doggett said NCGA will stand fast in its strong support of the current farm bill.
"NCGA's long-standing policy supports funding of farm programs at current levels and opposes reopening the farm bill before its expiration in 2007," Doggett said. "If we start altering farm programs in the middle of a farm bill, we are going to have corn growers farming the programs and not their farms."
AFBF's Maslyn points out Congress will make the final budget decisions.
"This (the president's budget) sets the tone for the debate and once a number is agreed on, the Congress may have different ideas on how to get to that number," he said.
Although supporting President Bush's effort to "restore fiscal discipline to Washington," Congressman Randy Neugebauer (R-Lubbock), a member of the House Agriculture Committee, released a statement expressing concern over how farm programs are treated in the budget request.
"As Congress considers next year's budget priorities, it is important that we take a look at all USDA spending, not just the farm support programs," the statement said. "The fact that this country enjoys the safest and most affordable food supply in the world should not be taken for granted, nor is it an accident. Rather, it is the result of hard work in the field and sound agriculture policy from Washington.
"I look forward to working with President Bush to restore fiscal discipline to Washington. But I will also work to make sure folks in the 19th District don't shoulder more than their share of the burden."
