Less for agriculture, more for conservation, says USA

The US government is looking to spend less on agricultural support next year, and to redirect more funds to conservation and renewable energy.


Presenting Washington’s latest budget proposals for 2007 this week, US agriculture secretary Mike Johanns said it was essential to exercise financial restraint.


“The budget provides important resources for farmers and ranchers, while doing our part to avoid passing on the federal deficit to our children and grandchildren,” he said.


In total, the USA is looking to shave $3bn (£1.7bn) off its farm budget, taking it down to $93bn (£52bn).


Mr Johanns said there were two main sources for the cuts.


“One is that we will not need the emergency disaster funding that we need in 2006,” he said.


The USDA has recently announced another $2.8bn (£1.6bn) in aid to assist victims of the 2005 hurricane season.


The other area of saving is in farm programmes, which are due to drop from $21bn (£11.8bn) to $19bn (£10.6bn) in 2007.


In particular, Mr Johanns has tabled a 5% cut in all commodity supports and further savings in the cost of crop insurance.


Recent expenditure on these programmes had reached historically high levels, he said, and were way in excess of what was envisaged in the original 2002 Farm Bill.


But Mr Johanns also outlined areas where expenditure would rise in 2007.


“The budget proposes over $4bn (£2.2bn) to continue implementation of the conservation programmes authorised in 2002.”


Some $345m (£193m) was also being made available as grants and loans for energy projects, including $85m (£48m) for renewable energy research. And $82m (£46m) was earmarked to combat avian influenza.


On food aid, the US government has proposed a small increase to $1.3bn (£728m).


Controversially, 25% of this would be in the form of cash, rather than as physical commodities.


The American Farm Bureau Federation has reacted angrily to the proposals, saying that farming is being asked to take a disproportionate share of the pain.


“Farming accounts for less than 0.5% of national product, yet is taking 8% of the cuts,” said policy director Mary Kay Thatcher.


Reducing farm programmes ahead of any WTO agreement was also folly, since US farmers may have to pay twice.


She also opposed the idea of making 25% of food aid as cash.


“This opens the doors to fraud,” she told FW.


philip.clarke@rbi.co.uk