Corn growers will be hit hardest if President Bush's budget is passed, says a representative of the National Corn Growers Association (NCGA) at the 2005 Commodity Classic, Austin, Texas.
"We need to take the president's budget proposal seriously," says Sam Willett, NCGA's Director of Public Policy. "Right now there's quite a bit of concern in bringing down a budget deficit that's going to be at least $425 billion, and that's not including projected costs for Iraq and Social Security reforms."
President Bush introduced a budget in early February that would slash direct payments by 5%, reduce payment limits, and cut other programs by an overall $1 billion in annual program benefits to row crop farmers, estimates Willett.
Willett spoke during an NCGA briefing that preceded the opening of the 2005 Commodity Classic, a gathering of 3,000 farmers representing NCGA and American Soybean Association.
"The mainstream media, with the help of Ken Cook (Environmental Working Group President), have laid the groundwork for a full assault on the farm safety net," he says. On the day of the briefing USA Today printed a point-counterpoint editorial discussing the merits of cutting farm spending. The editorial bemoaned farm subsidies dished out to millionaires, celebrities and 'corporate farmers.'
"I don't know about you, but I don't know too many corporate farmers," says Willett.
NCGA, along with several other commodity groups, have joined together to make the case in Washington to support the 2002 Farm Bill, "as it's written and authorized," says Willett.
"Our message will be, do not re-open the Farm Bill," he says. "The farm bill has not cost nearly as much as folks predicted it would when it passed in spring of 2002."
The Administration's proposal would amount to an estimated 40% cuts in LDPs and marketing loans, says Willett. According to the Center for Agriculture and Rural Development (CARD), average LDP on 2004 corn crop is 28 cents per bushel. Average marketing loans for corn is 28 cents per bushel. Farmers have taken LDPs on 8.8 billion of the record 2004 11.8 billion-bushel harvest, says Willett. About 1.27 billion bushels are under marketing loans; of those, 265 million bushels have been repaid.
"Under the Administration's plan, 40% of your crop would not have been eligible for LDPs or marketing loan gains," says Willett. "That restriction on marketing loan programs, if implemented, would have a pretty severe impact not only on your marketing ability but also your total farm income.
Under the Bush budget proposal, USDA would look at direct payment yield history, rather than updated yields filed for countercyclical programs.
"We need to be cognizant that this would have a disproportionate impact on corn growers," says Willett. "The marketing loan assistance program really does mean a lot as far as the safety net for corn growers.
"What we really don't know is how committed the administration is to these proposals," he adds.
Willett also says Bush's budget proposal would cut $140 million out of Federal Crop Insurance programs through a change in premium structure. "Crop insurance would become less affordable if this is adopted," he says.