07/20/06 Farm Bill costs

Farm and Ranch July 20, 2006 The Washington Post has been running stories critical of the farm bill and payments that program crop farmers receive. Not so well publicized is the fact commodity payments by the USDA are forecast to drop this year by four-billion dollars. USDA chief economist Keith Collins says payments for corn are the largest part of the farm program and last year corn prices were low which increased government spending. Not so this year. Collins: "As result of higher corn prices we are seeing a very dramatic drop in corn program spending. Each 10-cent increase in the corn price reduces farm program spending by roughly a billion dollars. So we are talking about raising the corn price from last year, a $1.98 bushel to $2.45 this year, and that accounts for much of the expected drop in our farm program costs this year." U.S Senate Ag Committee Chairman Saxby Chambliss also recently pointed out that farm bill spending is coming in under budget. Chambliss: "In 2002 when we wrote that farm bill Larry Combest, Charlie Stenholm and a number of us were criticized by the Wall Street Journal and the Atlanta Constitution because it was an expensive farm bill. Well here we are 13-billion dollars under the projected expense." Even so Chambliss says agriculture won't get any credit for those savings going into writing the next farm bill. He looks for budgets to continue to be tight even though the White House recently announced reduced federal deficit figures. I'm Bob Hoff and that's the Northwest Farm and Ranch Report on the Northwest Ag Information Network