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Congress, Farm Groups React Negatively to Ag Budget Proposal

Early statements out from Congress and farm groups voice strong opposition to the President's budget proposal. There is wide support for Congress to again hold its ground in preventing the 5% across the board cuts in commodity and dairy programs.

Secretary of Agriculture Mike Johanns thinks Congress will be more likely this year than last to accept President Bush's similar budget proposal he outlined on Monday. In 2005, agricultural groups said the farm bill was contributing to deficit reduction by several years of low program payouts. Johanns told reporters Monday that particular defense no longer works with current projections showing historic levels of support paid out in 2005.

Last year's reconciliation package brought some spending constraints in the long-term, Johanns says. "A current contribution was not made in current farm programs," he says. The only exception was the end of cotton's Step 2 program, likely more because of a WTO ruling than budget concerns, Johanns adds.

Elements of the proposed reforms, which are similar to last year's proposals, include:

• Lowering the payment limit cap for individuals to $250,000 for commodity payments, including all types of marketing loan gains;
• Reducing crop and dairy payments to farmers by 5%,
• Requiring the dairy price-support program to minimize expenditures; and  
• Imposing a sugar marketing assessment to be paid by sugar processors on all processed sugar and implementing a small assessment on milk marketed by producers.

Reaction from around the country

Senate Agriculture Committee Chairman Saxby Chambliss: "To their credit, farmers have been willing to share deficit reduction that comes in manageable amounts. Congress did not pass last year's 2006 budget proposals. The 2007 budget proposals are very similar, and once again unfairly target agriculture. I expect Congress to reject them again."  

Sen. Tom Harkin, Senate Agriculture Committee ranking member: "The President promised to invest in renewable fuels, but his budget falls well short of what's needed to make a dent in our country's dangerous and costly dependence on oil. The President also talked kindly about investing in rural development and conservation when he signed the farm bill, but yet the Bush budget cuts the very initiatives he touted. These empty promises and this budget are the wrong path for Iowa and the nation's rural economy." 

Congressman Collin C. Peterson, House Agriculture Committee ranking member: "The plan does nothing to address escalating federal spending or this Administration's unending record of deficits. For agriculture, at best, this budget is a rehash of the President's strategy of sacrificing farm support for a sell at any cost international trade policy."

National Cotton Council Chairman Woods Eastland: "Spending on commodity and conservation agriculture programs account for less than 1.5 percent of total mandatory spending, yet commodity programs are being asked to shoulder more than eight percent of required reductions. Agriculture should not be singled out or asked for greater sacrifice than other federal departments."

"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," Eastland 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."

National Farmers Union President Dave Frederickson: "With lower prices and higher input costs, cutting the safety net is the last thing the administration should be proposing. Farmers and ranchers need a profit from the marketplace, and the President's proposal does little to help achieve this goal"