Milling & Baking News - February 15, 2005 - 12

W A S H I N G T O N

Fiscal '06 ag budget promises
lower outlays, some controversies
Continued from Page 1
million in fiscal 2006 funding for the
U.S.D.A.'s operations relating to the
multi-department Food and Agriculture Defense Initiative. The requested
funding was up from $298 million in
projected fiscal 2005 spending and compared with $111 million in 2004.
The increase from 2005 included $37
million aimed at strengthening the Food
Emergency Response Network and the
Regional Diagnostic Network to ensure
the capacity to respond quickly to food
emergencies and plant and animal diseases. An additional $35 million was
allocated for research to develop means
to quickly identify pathogens, develop
improved vaccines and better understand the genes that provide disease
resistance. And $51 million in additional
funding was requested to enhance surveillance and monitoring activities to
quickly detect pest and disease threats.
Of the total request for 2006, $62 million would be allocated to food defense
initiatives, including $39 million for defense-related programs of the Food Safety Inspection Service and $23 million for
the Agricultural Research Service. The
estimate for fiscal 2005 spending was
$27 million, with $19 million allocated to
F.S.I.S. and $8 million to the A.R.S.
Programs aimed at agriculture
defense were allocated $255 million
under the President's budget, up from
estimated spending of $150 million in
the current fiscal year and $95 million
in 2004. Of the $255 million requested
for fiscal 2006, $46 million would be allocated to the A.R.S., $175 million to the
Animal and Plant Heath Inspection Service and $35 million to the Cooperative
State Research, Education and Extension
Service.
An additional $59 million was requested to complete construction of the
animal research and diagnostic laboratory at Ames, Iowa.
The overall proposed program level
for F.S.I.S. in fiscal 2006 was $973 million, up $36 million from estimated
program spending of $937 million in
2005 and compared with $905 million
in fiscal 2004. Of the program level, $850
million would have to be appropriated
by Congress. The remaining $123 million would come from user fees. The
bulk of the funding allocation would be
for federal food safety and inspection, at
$887 million.

Commodity programs trimmed
The President's budget forecasts net
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outlays on commodity programs in fiscal 2006 at $16,771 million, down $5,002
million, or 23%, from a projected $21,773
million in the current fiscal year and
compared with $8,415 million in 2004.
The fiscal 2005 outlay estimate included $2,873 million in disaster funding and
projected increases in counter-cyclical,
loan deficiency and other payments because of sharp declines in prices resulting from abundant 2004 production of
major program crops.
The decline in outlays forecast for
fiscal 2006 was attributed to projected
commodity price recovery. Further, the
President's deficit-reduction proposal

Outlays on all support programs relating to feed grains in fiscal 2006 were forecast at $7,573 million, down from a projected $8,389 million in the current year
and $2,841 million in fiscal 2004. Outlays
on programs relating to wheat in 2006
were forecast at $2,319 million, up from
a projected $1,495 million in the current
year and compared with $1,173 million
in fiscal 2004. Outlays on programs relating to soybeans and upland cotton were
forecast to exceed those relating to wheat
in fiscal 2006, as was projected to be the
case in the current year.
The President's proposed $587 million
package of deficit reduction measures relating to farm programs, some of which
would require legislation, include:
reducing the payment limitation for all
C.C.C. commodity payments, including
marketing loan gains to $250,000, along
with the removal of the "three entity"
rule; making marketing assistance loans
based on historical production; reducing
all commodity payments to farmers by
5%; applying a 1.2% marketing assessment on sugar processors, and keeping
the costs of the dairy price support program at a minimum.
The President's deficit-reduction
proposals relating to the farm programs
already have generated considerable opposition from farm organizations and
farm-state senators and representatives.

Tighter food aid budget
to reform farm support programs would
result in savings of about $587 million
in Commodity Credit Corp. outlays in
2006, according to the U.S.D.A. Over a
10-year period, the proposed reforms
were expected to save nearly $5.7 billion.
Outlays on loan deficiency payments
in fiscal 2006 were forecast at $4,074
million in the President's budget, down
$610 million, or 13%, from a projected
$4,684 million in the current year and
compared with $461 million in fiscal
2004.
Fiscal 2006 outlays on direct payments
to producers were forecast at $5,303 million, down $44 million from the $5,347
million projected for the current year
and compared with $5,289 million in
fiscal 2004. Countercyclical payments to
producers in fiscal 2006 were forecast at
$5,950 million, up $2,008 million from an
estimated $3,942 million in the current
year and compared with $809 million in
fiscal 2004.
Net outlays for price support and
marketing assistance loans in fiscal 2006
were forecast at $3,505 million, down
$1,518 million from the $5,023 million
projected for the current year and compared with $1,246 million in 2004.

Funding totaling $1,371 million was
requested by President Bush for foreign
food assistance in fiscal 2006, down $572
million from a projected $1,963 million
in the current year and compared with
$2,016 million in spending in fiscal 2004.
P.L.480 Title II funding, which provides for the purchase of U.S. agricultural commodities for donation abroad,
was proposed at $964 million for fiscal
2006, down $382 million from the $1,346
million projected for the current year
and compared with $1,655 million in
spending in fiscal 2004. The funding included a budget request of $885 million
and projected reimbursements from the
Maritime Administration for prior year
cargo preference costs. It should provide
for the donation of 1.7 million tonnes in
U.S. agricultural commodities.
It should be noted that the President's
budget requested $300 million in additional funding for the U.S. Agency for International Development's International
Disaster and Famine Relief Assistance
account to support emergency food aid
assistance activities to be administered
separately by USAID.
"This change is intended to expedite
the response to emergencies overseas
by allowing food aid commodities to
Milling & Baking News, February 15, 2005 / 13

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Milling & Baking News - February 15, 2005

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