NCC Commends Chairman Chambliss on Developing Balanced Reconciliation Package

WASHINGTON, DC – The National Cotton Council expressed appreciation to Senate Agriculture Committee Chairman Saxby Chambliss (R-GA) for his leadership in developing a balanced reconciliation package and steering it through the committee today. The package passed by a vote of 11-9.

“The National Cotton Council is especially grateful to Senator Chambliss for his leadership in defeating an amendment by Senator Dayton (D-OH) that would have changed the payment limitation provisions of current farm law,” NCC Chairman Woods Eastland said. “If adopted the amendment would have been extremely disruptive to farmers, lenders and agribusiness at a time when the industry is already coping with dramatic increases in fuel costs and many Sun Belt farmers are reeling from the damage of two devastating hurricanes.”

Eastland noted, however, that Senator Chuck Grassley (R-IA) put members on notice that he intends to offer a similar amendment when the legislation is considered by the Senate.

In leading the adoption of a carefully balanced package, Chairman Chambliss ensured the necessary decisions were made by the Agriculture Committee rather than the Budget Committee. Senator Chambliss told the Senate ag panel members, “I assure you that changes made by the Budget Committee would most likely not be in the best interests of American agriculture.”

Chambliss also noted in a Senate Agriculture Committee news release that the Committee-adopted plan achieves savings from farm commodity programs, but leaves unchanged the farm program structure created in the 2002 farm bill. Savings to conservation programs is achieved without affecting landowners’ or farmers’ existing multiyear contracts in any program. Agricultural research programs remain intact, recognizing past funding levels. In preparing for the writing of the 2007 farm bill, the Committee bill also preserves budgetary resources, known as the “baseline,” for the upcoming farm bill debate by generally suspending spending reductions in fiscal year 2011.

The Congressional Budget Office estimates that the Committee’s bill reduces outlays for mandatory programs under the Committee’s jurisdiction by $196 million in fiscal year 2006 and $3.014 billion over the next five years covering fiscal years 2006 through 2010. By achieving the savings required by the budget resolution, the Committee’s action can not be changed by the Budget Committee as it develops the omnibus legislation to be considered by the Senate. However, the package can be amended on the floor.

The major provisions of the Committee package include a reduction by 2.5 percent in all payments that producers receive in Direct Payments, Counter-Cyclical Payments, and Marketing Loan Gains or Loan Deficiency Payments for the 2006-10 crops. In addition, the package calls for the termination of the Step 2 program for upland cotton on August 1, 2006. To achieve balance across the farm bill, spending reductions are also included for dairy, sugar, conservation and research programs.

Regarding the elimination of Step 2, Eastland reiterated earlier statements that terminating the program prior to the conclusion of the current farm bill is an acknowledgement of U.S international obligations. He noted again that, “A decision to completely terminate a U.S. farm program in the middle of a farm bill is virtually unprecedented. The loss of the Step 2 program will reduce offtake of U.S. cotton and put additional pressure on prices received by farmers.”

Chambliss noted that, “We plan to work next, hopefully in a bipartisan manner, to provide disaster assistance to farmers and ranchers and others in need in separate legislation in the wake of Hurricanes Katrina and Rita and other adverse weather events. In the aftermath of these dramatic events, farmers are struggling with production losses, sharply higher energy prices and lower farm prices.”

Chambliss also welcomed the decision by USDA to delay closing any Farm Service Agency (FSA) offices under the so-called FSA for the Future initiative. He committed the Committee to work with farmers and USDA to develop plans that will ensure FSA has the resources necessary to continue to administer and deliver programs.