NCGA ‘Not Surprised’ by USDA Budget (2-6-07)

The proposed U.S. Department of Agriculture (USDA) budget will rise slightly, with total spending increasing to $89 billion in the2008 fiscal year. The budget is in line with expectations, according to the National Corn Growers Association (NCGA).

The proposed budget is 0.3 percent higher than the 2007 budget. The 2008 fiscal year begins on Oct.1.

"There were really no surprises with the announced budget proposal in light of what we heard last week from the USDA's 2007 farm bill recommendations," said Ken McCauley, NCGA president.

Approximately 75 percent of spending is mandated by law, said USDA. Discretionary spending would rise 3.4 percent to $20.2 billion.
According to USDA, the budget projections for FY 2008 are based on programs passed in the 2002 farm bill, the current law authorizing all farm programs. However, the 2002 farm bill expires before the new budget would take effect, and the farm bill that replaces it would likely change the budget.

Due to expected higher commodity prices, funding levels for crop payments would decrease 13 percent in the next fiscal year.

Mandatory spending on conservation programs would increase 2.4 percent to $1.74 billion from $1.7 billion while discretionary spending would decline 10 percent, to $825 million from $919 million.

The budget also calls for $20 million in new funding for research into ethanol feedstocks and $395 million in assistance for farmers and rural businesses to use renewable fuels in their operations. "Corn growers believe adequate funding levels are needed, as the expansion of renewable energy continues and as we strive to better the conservation program and enhance rural development," said McCauley.