MEMPHIS – The National Cotton Council expressed
its disappointment with an amendment to the Senate Budget Resolution
that moves funds from production agriculture to an untested
conservation program that has not yet been implemented.
During consideration of the FY04 Budget Resolution March 13,
Senator Grassley (R-IA), Chairman of Finance Committee and member of
Agriculture Committee, offered an amendment, which if included in
the final budget resolution, could require the respective
Agriculture Committees to amend the 2002 farm law in a manner that
would move $1.398 billion from farm programs to the new, as yet
uninitiated Conservation Security Program.
NCC Chairman Bobby
Green said that Senator Grassley’s proposal appears to further
reduce existing limitations on farm program benefits, which already
penalize commercial-sized operations.
"This amendment comes
at a time when the new farm law is less than 10 months old and not
even fully implemented, " Greene said. "It will undermine confidence
in the farm law, resulting in producers experiencing difficulty in
obtaining production financing, reluctance to make long-term
investment in the industry’s infrastructure and disrupting planting
and marketing decisions."
Greene commended Senator Sessions
(R-AL) for his efforts to convince members of the Budget Committee
to reject Grassley’s amendment. Senator Sessions argued that the
Budget Resolution is not the place to mandate changes in farm policy
that was only recently enacted after two years of full and thorough
debate.
Grassley suggested that the cuts in farm programs be
achieved by dramatically reducing the limit on program benefits
provided in the recently enacted 2002 farm law. His proposal would
establish a new, significantly lower limit on total annual benefits
that would apply to cotton, rice, peanuts, grains and oilseeds -- a
"one-size fits all" program without consideration for the economics
of individual crop production. Grassley has continued to actively
promote his proposal in the press, but did not introduce
legislation, nor furnish members of the Senate Budget Committee or
Agriculture committee details about his proposal prior to offering
this amendment.
Greene said that as the respective budget
resolutions move to the House and Senate floors next week, the NCC
would continue its efforts to persuade members not to include
provisions that would require the Agriculture Committees to modify
the new farm law.
"Any more stringent payment limit
provisions or eligibility requirements will negate the benefits
contained in the new farm bill for commercial-size producers,"
Greene said. "More restrictive limitations or eligibility
requirements only add to transaction costs for producers and create
additional administrative costs to USDA."
Greene noted that
Senator Grassley stated he believes his proposal reduces land rental
offers. If that happens, all landowners would be adversely affected,
not only absentee owners, but farm widows and retired farmers.
USDA’s ARMS data show that farms with smaller annual sales hold a
substantially higher proportion of their assets in land than do
larger sales operations. Therefore, any general reduction in land
values would cause a much larger reduction in the equity position of
smaller sales operations.
The Courtland, AL, ginner also
noted that the effect of this amendment could be devastating to
Sunbelt agriculture. "More restrictive limitations or eligibility
requirements would cause shifts to other program crops in the
Sunbelt and would shift production to specialty and hay crops in the
West, disrupting markets in both cases, Greene said.
Greene
also expressed concern that the House Budget resolution, if enacted
as approved by the Committee, would result in draconian cuts in
agriculture programs by requiring changes in the law to achieve
spending reductions of nearly $20 billion over the next 10 years, of
which $600 million must be cut in FY04 and nearly $5 billion in the
period
FY04-08.
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