02/08/06 2007 budget and ag

The response from all sectors has been flowing, and varied, since President Bush announced his proposed 2007 fiscal year budget. Let's start with the nuts and bolts of the ag budget, which comes in at $93 billion dollars, down from $96 billion in fiscal year 2006. Like other government agencies, the President has asked U.S.D.A. for across the board cuts. And those reductions, according to U.S.D.A. Secretary Mike Johanns, are reflected in farm program spending. It's similar to the proposals made by the Bush Administration last year, which were opposed and defeated in Congress. But Johanns is quick to point out even with the proposed reductions, farm payments are greater in amount than 2002 Farm Bill projections. JOHANNS: Beginning in 2005 the situation changed and expenditures increased to historically high levels, well above the 2002 Farm Bill estimates. They are projected to exceed $21 billion in 2006. But that despite that analyst of the numbers, several in the farm community feel reductions in commodity programs are significant. Mary Kay Thatcher of the American Farm Bureau Federation says eight per cent of the cuts in the President's total overall budget come from ag, which only makes up one half of one per cent of that budget to begin with. THATCHER: You're looking at hits of five per cent in marketing loans, a five per cent cut in direct fixed payments, a five per cent cut in countercyclical. And while it is the budget reductions that are most noted, Johanns says that the savings from those reductions will apply to priority areas of the ag budget. For example, funding for areas of food safety and security and connected research has increased. JOHANNS: Funding increases include $23 million in increases to strengthen the Food Emergency Response Network and the Regional Diagnostic Network. This increase will help to ensure a quick response to food emergencies and plant and animal diseases. And there is a significant increase in funding to counter the potential threat of Avian Bird Flu. Another aspect of the ag budget that has raised an eyebrow or two is the proposed requirement that farmers purchase crop insurance in order to be eligible for commodity payments. On the plus side is funding to increase biofuel research and development, and affordability. But the rest of the ag budget, and the President's proposed 2007 budget, has some areas that Northwest lawmakers are both praising and are concerned about. More on that in our next program.