The President delivered his budget to Congress in early February, which included massive cuts to the Department of Agriculture, including:

·                    $5.7 billion in cuts over 10 years from commodity programs

·                    A 5 percent reduction in payments to producers including Direct and Counter-Cyclical Payment Programs, Loan Deficiency Payments and Marketing Loan Gains

·                    A reduction in the cap on crop payments of more than $100,000

·                    Elimination of the 3-entity rule

 “As the Budget Committee assembles the nation’s budget, I urge them to be sensitive to the needs and importance of the American farmer,” Berry said. “The White House has indicated with its funding priorities that today’s family farmer is expendable. I couldn’t disagree more; and the long, bipartisan list of Representatives who joined on our letter to the Budget Chairman indicates the President is simply out of touch with the rural needs of this country.”

The full letter to Budget Chairman Jim Nussle follows:

The Honorable Jim Nussle

Chairman

Committee on the Budget

Dear Chairman Nussle:

            We write to state our support for America's farm policy.  We strongly hold that the House Budget Resolution must preserve the Farm Bill or risk injuring America's farmers, rural communities, and hungry families.

U.S. farm policy is really about people.  Whether it is a family farmer or rural retailer, cutting Farm Bill programs will have a dramatic impact on everyday life in rural America. Examining the Farm Bill changes proposed by the President's budget proposal, for example, reveals deep cuts to farmers who would face anywhere from a 10 to 30 percent cut in gross income.  Most farmers, who must compete against foreign producers benefiting from higher subsidies and tariffs, operate at slim margins, and such deep cuts would erase profit margins for many producers.  Additionally, cutting farm programs while the United States is in the midst of negotiating a multilateral trade framework in the Doha Round of the WTO could undermine our position - making it even more difficult for our farmers to compete.

            Hardships family farms would experience as a result of the President's Budget would not stop at field's edge.  Our farm programs are fundamentally important to the economic fabric of rural America as a whole; entire communities would endure economic loss.  Americans already experiencing hard times rely on the U.S. Department of Agriculture's (USDA) food nutrition assistance programs.  We cannot ignore the fact that hunger remains a daily struggle for millions of Americans.

            Aside from deserting our rural communities and the hungry, cutting agriculture programs and re-opening the Farm Bill will create more fiscal problems than it solves.   The Farm Bill is a fiscally responsible alternative to the ad hoc assistance commonplace prior to adoption of the current safety-net.  The federal government spent an average of $24.5 billion per year for each of the three years preceding the Farm Bill (including ad hoc assistance), but in the three years since passage of the Farm Bill ending in 2004, spending has averaged only $15.6 billion - almost $9 billion less per year than the average for the preceding 3 years and $5.4 billion less per year than the amount provided for in the budget.  Although farm spending is estimated to increase beyond levels originally projected in the Farm Bill for Fiscal Year 2005, the total spending under the new Farm Bill would remain more than $13 billion less than original projections. From a fiscal perspective, the Farm Bill is an effective tool for spending restraint.  Additionally, cutting the Farm Bill, whose agriculture programs only account for about one half of one percent of the federal budget, will not create enough savings to justify undercutting an industry that is responsible for 15% of our nation's Gross Domestic Product (GDP), twenty-five million jobs, and a supply of food and fiber that is the safest, most abundant, and most affordable in all the world.

            Beyond saving money, the Farm Bill acts as a multi-year contract that farm families rely on to make plans for the future.  Re-opening the Farm Bill's safety-net, designed to last through 2007, would create more uncertainty for farmers who must already contend with market instability, unpredictable weather, and variable supply costs.  Interrupting U.S. farm policy at random prevents farmers from being able to make long-term decisions, and making cuts to programs like Federal Crop Insurance diminish farmers' risk management tools.            

            Finally, conservation initiatives under U.S. farm policy are unrivaled in their success in rehabilitating wetlands, wildlife and wildlife habitat, curbing soil erosion, and improving air and water quality through voluntary, incentive based practices.  We hope to build on this success rather than turn back.          

            As your committee begins deliberating the House Budget Resolution for Fiscal Year 2006, we implore you to stand by the commitment we have made to our nation's farmers, our rural communities, and the hungry by maintaining the baseline for agriculture.