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Budget battle may help shape farm programs

Senators and House members are preparing for the annual battle of the budget, a fight that could go a long ways toward determining the shape of commodity and conservation programs in the 2007 farm bill.

The chairmen of the House and Senate Agriculture Committees each have asked the chairmen of their respective Budget Committees for additional funding authority for the next farm bill. The latter were scheduled to begin voting on the fiscal 2008 Budget Resolution over the next few days.

Rep. Collin Peterson, D-Minn., who heads the House ag committee, has asked Budget Committee Chairman John Spratt, D-S.C., for an additional $6 billion for biofuels development, while Senate Ag Committee Chair Tom Harkin, D-Iowa, is seeking more money for food stamps and other nutrition programs.

Peterson, meanwhile, told reporters he thinks leaving the commodity title of the existing farm bill unchanged might be farmers’ best hope for maintaining a viable safety net in the farm bill Congress is scheduled to write later this year.

Earlier this month, the Congressional Budget Office said that commodity programs – direct, counter-cyclical and marketing loan payments – cost $18.2 billion in fiscal year 2006 but could cost less than $10 billion in fiscal 2007 and fall to as low as $7.8 billion in 2008 because of high grain and oilseed prices.

The decreased spending, while good news for taxpayers, also means less money is available for the baseline that Congress uses to determine future funding levels for farm bill programs. Overall, USDA spent $11.5 billion less between 2002 and 2006 than Congress expected it to spend on CCC farm support and related funding.

Farm organizations including the American Farm Bureau Federation, the National Cotton Council and the National Corn Growers Association have asked Congress to at least fund the 2007 farm bill at the same level as authorized in the 2002 farm bill.

If the 2002 farm bill was extended, program outlays for corn, cotton, rice, soybeans, wheat and other program crops are expected to drop from $99 billion to $66 billion, according to American Farm Bureau economists. That’s in contrast to spending on nutrition programs, which could increase to $366 billion from 2008-2013.

“The 2002 farm bill was carefully constructed to provide predictable support for commodity, conservation and nutrition programs,” said AFBF President Bob Stallman. “Congress struck a balance in funding each of these programs and determined the tax dollars they were willing to spend over the life of the farm bill.”

More recently, environmental groups have also been urging Congress to increase funding for voluntary USDA conservation programs in the new farm bill, including significant increases in the Environmental Quality Incentives, Wildlife Habitat Incentives, Conservation Reserve and Wetlands Reserve Programs.

Peterson said the lack of additional funding means changing farm programs along the lines being sought by the Corn Growers, the American Soybean Association and environmental groups will be difficult.

“Anyone who is going to try to take this farm bill apart will have a fight on their hands,” Peterson told reporters participating in a telephone conference call. (NCGA’s Corn Congress has endorsed a revenue counter-cyclical program for the 2007 farm bill while ASA is asking Congress to adjust target prices to make farm programs more equitable.

Some analysts have been saying that the increasing demand for corn for ethanol and the resulting higher prices for grain and oilseed could mean farmers have less need for traditional farm programs.

The 2002 farm bill’s counter-cyclical and marketing loan programs are designed to provide farmers with increased income support when commodity prices are low. Peterson said the farm safety net is too important to abandon to the hope that farm prices will remain high.

Noting that budget and farm price projections can be off the mark, Peterson said, “We need to maintain the safety net in case they are wrong.”

The Senate Budget Committee was scheduled to convene on March 14 to take up the Budget Resolution and to start voting on it March 15. The House Budget Committee said it will write its fiscal year 2007 Budget Resolution the week of March 19.

Farm and other interest groups were urging their members to contact their senators and representatives to ask them to support a Budget Resolution that would increase mandatory spending levels in the farm bill by $20 billion and discretionary spending levels for the 2008 agricultural appropriations bill by at least $1 billion.

“Our chances for winning major farm bill reform or increased funding levels for conservation, renewable energy and rural development programs will be determined in large part by action on the Budget Resolution,” said an e-mail sent by The Minnesota Project.

The environmental groups, which include Environmental Defense, Environmental Working Group, Land Trust Alliance, National Audubon Society Natural Resources Defense Council, Republicans for Environmental Protection, the Soil and Water Conservation Society and the Wilderness Society asked House ag committee leaders to expand incentives for farm, ranch and forest land management practices.

In particular, the groups asked for funding to:

· Increase cost-sharing assistance through the Environmental Quality Incentives Program to $2 billion annually;

· Expand the Wildlife Habitat Incentives Program to $300 million annually;

· Reserve 20 percent of working lands conservation funds to promote cooperative conservation agreements that link together groups of farmers to meet regional environmental challenges.

· Protect at least 5 million acres of farm and pasture land from development through the Farm and Ranchland Protection Program and the Grassland Reserve Program and create a new a program to help local governments and land trusts acquire community forests and other open spaces.

· Reform the Conservation Reserve Program by enrolling more streamside buffers and other marginal, environmentally sensitive lands that can filter runoff and provide habitat for wildlife.

· Expand the Wetlands Reserve Program to 5 million acres;

· Make the Conservation Security Program available to more producers who meet high levels of environmental performance;

· Expand forestry incentive programs to $250 million annually.

· Expand energy title programs to provide grants, loans and loan guarantees to farmers and farmer-owned businesses to develop energy on farms in ways that also meet our environmental challenges.

· Expand efforts to help farmers make the transition to organic production systems.

“We believe that the next farm bill must dramatically expand incentives for land stewardship and preservation,” the groups said.

Expanding these popular, oversubscribed conservation programs would not only help meet our environmental challenges but would also serve more farmers, bring our farm programs into compliance with our trade obligations, and earn more public support for farm spending in a time of deficits.”


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