Reconciliation Cuts $2.723 Billion in Ag Spending

MILC program preserved but major cuts seen in conservation and commodity programs. Compiled by staff

Published on: Dec 19, 2005

Over the weekend House and Senate conferees argued on how to fairly treat agriculture in the Deficit Reduction Omnibus Reconciliation Act. In the end, a total of $2.723 billion is cut from the agricultural budget over the next five years.

The Senate's position of no reduction for food stamps was included. However, no extension of any provision in the commodity title of the farm bill is granted. The Milk Income Loss Contract Program is extended for two years, but without the Senate's suggested 2.5% payment cut.

Senate Agriculture Committee Chairman Saxby Chambliss, R-Ga., expressed support for the "Deficit Reduction Omnibus Reconciliation Act," yet expressed concern about final results forced by House leadership.

"While the baseline is preserved for some conservation programs through extension, the House opposed similar treatment for commodities," says Chambliss. "This short term reprieve from cutting crop payments means commodities will not be protected like conservation during reauthorization.  This will be a big problem for farmers as we begin to write the Farm Bill in 2007."

Below is a summary of the agriculture spending cuts for fiscal years 2006-2010.

Commodity Programs:

  • No extension of commodity programs
  • No across-the-board cuts for commodity programs
  • Advance direct payments reduced to 40% crop year 2006; further reduced to 22% in crop year 2007
  • Cotton Step 2 program terminated effective Aug 1, 2006
  • MILC dairy support extended, without the Senate's 2.5% cut, adds $998 million spending

Conservation Programs:

  • EQIP extended to 2010, funds reduced $1.27 billion FY 07 – 09; $1.3 billion FY 10
  • CSP extended to 2011, funds capped $1.954 billion FY 06 – 10; $5.65 billion FY 06 – 15
  • Watershed Rehabilitation program - Cancellation of funds available prior to Oct 1, 2006

Rural Development/Energy/Research Programs:

  • Renewable Energy Program: Limit FY 07 funds to $3M
  • Value-added Grant program: Cancel unspent funds prior to Oct 1, 2006
  • Enhanced Access to Broadband Telecommunication Services in Rural Areas: Cancel unspent funds prior to Oct 1, 2006
  • Rural Business Investment Program: Cancel unspent funds prior to Oct 1, 2006
  • Rural Business Strategic Investment Grant Program: Cancel unspent funds prior to Oct 1, 2006
  • Rural Firefighters Grant Program: Cancel unspent funds prior to Oct 1, 2006
  • Initiative for Agriculture and Food Systems: Cancel unspent funds for FY 07 - 09