The Senate approved the agriculture budget portion ($2.723 billion) of the Deficit Reduction Reconciliation Conference Report. However, because of changes made to the Medicaid portion of the bill the measure is sent back to the House before final approval.
The total $39.7 billion reduction package cuts commodity, conservation, agricultural research and on-farm renewable energy grants money. It does extend the Milk Income Loss Contract Program for another two years.
Senate Agriculture Committee Chairman Saxby Chambliss pushed to extend most farm subsidy programs until 2011 in the Senate version of the reconciliation package. The House and White House opposed the extension, which was dropped during conference.
Extending most subsidy programs until 2011 would have also hindered efforts to reach a global trade deal to open overseas markets to our farm exports. In addition, extending subsidy programs until 2011 would have invited more retaliatory tariffs on all American exports, including farm exports.
The changes require the House to approve the modified reconciliation bill that the Senate passed Wednesday morning. Then it will go on to the President for his signature. The House has left for holiday break, and is unlikely to approve the measure before the end of the year.
Below is a summary of the agriculture spending cuts for fiscal years 2006-2010.
- 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
- EQIP extended to 2010, funds reduced $1.27 billion FY 07 â€“ 09; $1.3 billion FY 10
- CSP extended to 2011, funds capped $1.954 billion FY 06 â€“ 10; $5.65 billion FY 06 â€“ 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