February 24, 2005

The administration recently released a $125.6 billion budget proposal for the USDA [PDF] during FY 07, a $7.3 billion decrease from FY 06 levels. The proposal contains a number of policy changes to commodity programs and reduces funding for a number of critical conservation programs.

One of the strategic goals outlined in the proposal involves enhancing the competitiveness of rural and farm economies. To accomplish that, the administration proposes tightening payment limits, changing crop insurance eligibility requirements and reducing commodity and dairy payments to producers by five percent.

The proposed changes to commodity programs have received mixed reviews from members of Congress and the agricultural community. In response to the proposal, members of the House Committee on Agriculture sent a letter [PDF] to their colleagues on the House Committee on Budget urging them to refrain from making additional changes to agricultural programs that are set to expire in 2007. In the Senate, Agriculture Committee Chairman Saxby Chambliss noted in a press release that the administration’s proposal unfairly targets agriculture, even though spending on agriculture programs is $13 billion less than originally projected.

A statement released by American Farmland Trust President Ralph Grossi noted that the president’s budget confirms what farmers, ranchers, and observers have long known: “significant changes to American farm policy are inevitable.” However, Grossi emphasized that changes to commodity programs should be part of a larger farm policy discussion and not simply be budget cutting measures.

Another of the administration’s key proposals for the 2007 budget involves providing record levels of financial and technical assistance to support farm bill conservation programs. While funding for these programs increased slightly in the FY 07 proposal, several programs were cut in order to provide increased funding in other areas.

Funding for the Wetland Reserve Program, which is central to the president’s wetland initiative, doubled from $250 million in FY 06 to $403 million in FY 07. The Conservation Reserve Program also benefits under the proposal with funding scheduled to increase $106 million to $2.093 billion in FY 07. Another program that would receive additional funding in FY 07 is the Conservation Security Program (CSP), the nation’s first comprehensive stewardship incentive program. Funding for the CSP is proposed at $342 million, an increase of $83 million over FY 06, but still well below the level originally projected in the 2002 Farm Bill.

The president’s budget proposal continues the trend of reducing funding for several critical conservation programs. These programs help to provide environmental benefits such as clean air and water and permanently protect farm and ranch land and wildlife habitat. They also enable farmers and ranchers to comply with an increasing number of environmental regulations.

The Conservation Technical Assistance (CTA) program, which provides critical conservation planning assistance to farmers and ranchers, was cut $62 million below FY 06 levels. Despite its high demand, funding for the CTA has gone from $742 million in FY 05 to $634 million in FY 07.

The budget also proposed to reduce funding for the Farm and Ranch Lands Protection Program (FRPP) to $50 million, a level $47 million below that authorized in the 2002 Farm Bill. Grossi called on Congress to restore funding for FRPP in order to help stem the loss of our best farmland to development.

The budget debate now shifts to the House and Senate Budget Committees which will begin to develop budget resolutions for their respective chambers. AFT will continue to work with members of the conservation community to ensure that funding for valuable conservation programs is protected during the budget and appropriations process.

FY 07 President's Budget