02/07/06 Administration proposes payment cuts

Farm and Ranch February 7, 2006 In a rerun of what it proposed last year, the Bush Administration is proposing an across the board reduction of commodity support payments for the 2007 federal budget. Agriculture Secretary Mike Johanns outlined elements of the proposal yesterday. Johanns: "Reducing all commodity payments by five percent. Reducing the payment limitations CCC commodity payments, including marketing loan gains, to 250-thousand dollars along with removal of the three entity rule." USDA is also proposing to reduce crop insurance premium subsidies and lower the amount paid to reimburse insurance companies for administrative costs. All producers would be required to purchase crop insurance to receive direct crop payments. Congress didn't buy much of what the Administration proposed last year but Johanns thinks it's a different situation now. He says the argument that agriculture has already given in that commodity program costs were less than expected in the early years of the 2002 Farm Bill doesn't hold anymore because projections now show it will cost more than expected in the end. The Secretary also pointed out that subsidy payments didn't take any reductions in the recently completed spending reconciliation bill. Johanns: "We are proposing these things recognizing that these programs have by and large been spared from deficit reduction." Congress of course will have the final say. I'm Bob Hoff and that's the Northwest Farm and Ranch Report on the Northwest Ag Information Network.