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Less money likely for next farm program

One probable change in the next farm bill is that it will be funded less generously than the current one.

The cut could be as much as $30 billion over the next 10 years, about $74 billion instead of the March 2006, Congressional Budget Office baseline score of $104 billion for continuing the current farm bill. Projected stronger grain prices for the next 10 years reduce expenditures for CCPs and LDPs due to the counter-cyclical nature of these programs.

An estimate of what CBO’s baseline would be, given current projected crop prices, puts farm bill spending at the $74 billion figure. “That’s $30 billion off the table to write the next farm bill,” says James Richardson, co-director, Texas A&M Agriculture and Food Policy Center.

Richardson was one of several speakers discussing possible outcomes for upcoming farm bill debates at a recent Texas Commodity Forum in Amarillo, Texas.

Richardson said other factors including increased emphasis on conservation, renewable energy and fruits and vegetables in the 2007 farm bill could affect the amount of funds devoted to the commodity title. “Money for these will come out of the commodity title,” he said.

Richardson also anticipates tighter payment limits in the next farm law. He said revenue insurance proposals discussed at Senate and House Ag Committee hearings and the Secretary of Agriculture’s “listening sessions,” have gained little traction with the Ag Committee.

“We’re not seeing any indication that Congress is giving (those proposals) serious consideration,” he said.

Richardson also said the Doha Round of WTO negotiations, considered by many to be dead, may still have a pulse.

“Doha can be reinvigorated,” he said. “The last WTO round also died and it took five years to reach an agreement.”

Richardson said Brazil continues to push for changes in the U.S. cotton program. “They are pressing for more litigation, citing serious prejudice,” he said, even though the United States eliminated the Step 2 program and took other remedies.

Richardson said House and Senate leadership changes taking place in the next Congress means new players in charge of committees.

“But neither side (Republican or Democrat) will risk helping the other a lot with a 2008 presidential election looming.”

After the dust settles, Richardson expects the next farm bill to look very much like the current one, because the counter-cyclical CCP and LDP provide a low cost safety net when market prices are high.

The ag committees’ hearings and the listening sessions showed “most farmers like the current farm bill,” he said. “Some don’t like parts of it but they need to rebuild their coalition.”

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