U.S. farmers can be assured they won’t notice any “significant differences” in their bottom lines due to budget cutting measures to the current farm bill, says Sen. Saxby Chambliss, (R-Ga.), chairman of the Senate Committee on Agriculture, Nutrition and Forestry.
Speaking at the recent Southern Peanut Growers Conference in Panama City, Fla., Chambliss said his committee would come up with savings in agriculture that will not change policy, but will allow farmers to participate in cutting the nation’s record federal budget deficit.
“The Administration took the farm bill, tore it up, threw it out the window, and said, ‘you guys have to start all over again,’” says Chambliss. “The problem I had with the President’s request for deficit reduction was that farmers and ranchers all across America were asked to pay a disproportionate share of those deficit savings.”
Chambliss says he is a “budget hawk,” and he believes the federal government is spending too many tax dollars in Washington. “We have got to get our arms around this federal spending issue. I’m proud of our President, who decided he would take this issue head-on. If we’re truly going to take control of spending, then we have to control both the discretionary and the mandatory side.
“We’re dealing with a $1.5 trillion budget in Washington today, and one-third of the budget is discretionary spending. That’s what we’re dealing with now in the appropriations process. This could include a disaster program for agriculture or an education program. But the mandatory side is where two-thirds of the money is, and that is where most of your tax money is spent,” he says.
Mandatory budget items include Social Security and Medicare, which can’t be touched or changed, says Chambliss. “It also includes Medicaid, a lot of highway programs, educational programs to an extent, and farm programs or the farm bill. The President says we need to get our arms around the mandatory side of spending, and that we’re going to ask everyone to make deficit reduction savings in the mandatory programs because we want to reduce the deficit by 50 percent during the second four years of his administration. I can appreciate that, and I’m willing to work with him towards that goal,” he says.
But this can be accomplished, he adds, without changing the current farm bill. “I told the President that we made a contract with farmers and ranchers in 2002, and that contract should run for six years. I don’t mind moving a few numbers around, but I’m not going to change the policy that’s set forth in that farm bill. His budget changes policy, and we cannot do that. Men and women have made financial commitments for equipment, land, and rent, and we have committed this six-year farm bill to them, and we simply cannot change it,” says Chambliss.
President Bush asked for about $9 billion in savings from the farm bill, he says. “So we set out on our own to try and figure out exactly what our proportionate share ought to be. We have three pots from which we spend in the area of agriculture — the conservation title, the food stamp and nutrition title, and the commodity title. We looked at each one of these titles for possible savings.”
Some programs in conservation are being fully utilized, says Chambliss, and it’s money well spent. Other programs, however, are not being fully utilized, and some savings could be achieved from those, he adds.
Savings also can be gained from the nutrition side of the budget, he says. “When I first came to Congress in 1995, the GAO conducted a study showing that the food stamp program was subject to a waste/fraud abuse factor of 25 percent. We started making changes to the food stamp program at that time, and we have reduced the waste/fraud abuse factor down to 6 percent. But even 6 percent of a $34 billion program is a lot of money, so we’ve had the opportunity to achieve some savings there.”
The commodity title, he says, has the most direct effect on farmers. “We are not going to change the policy in the farm bill. We can move some money around. It’s amazing how we can move a penny or a half-cent and achieve savings due to the sheer volume of how farmers operate. We came up with a number of about $2.8 billion in savings that we could achieve in a fair and equitable manner for everyone.
“We arrived at that $2.8 billion by taking the deficit savings the President wanted to achieve and applying that back to 4.7 percent, which is the percentage of agricultural spending on the mandatory side. At the end of the day, the budget committee agreed that we could achieve savings of $3 billion. We’ll come away from this with deficit savings from agriculture that will not change policy.”
Some have speculated that the deficit savings numbers might be a preview of how the next farm bill will look, says Chambliss.
“That’s far from the truth. I have no idea exactly what that farm bill will look like. But I can tell you the factors that will be in play for the next farm bill that we didn’t have in 2002. The first is the numbers. In 2002, we were in a surplus budget situation, so there was more money available than what we’ll have in 2007. Secondly, the Brazilian cotton case has had a major impact not only on cotton, but it’s having a major impact on all other commodities in the farm bill.
“Every commodity has to look at this case and make decisions as to what changes we need to make within the particular titles to meet WTO requirements. WTO is a great organization that has served us well to this point. We must be sure we’re WTO-compliant in this next farm bill.”
It’s critically important, says Chambliss, that the United States has trade agreements, especially with its largest trading partners. “If you’re an auto or computer manufacturer in America, you got a good deal from NAFTA and GATT. But when you look at the agriculture and trade portion of those agreements, we took a hit to the benefit of the heavy manufacturing side. But when the new administration came in, we saw a new attitude. If we don’t have strong trade agreements for American farmers, we won’t survive in the world market from an agricultural perspective.”