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Wheat Growers Cringe Under Budget Cuts by Scott Yates, Washington State Staff Writer Capital Press, October 28, 2005

SPOKANE - If it's not one thing, it's another for U.S. wheat growers who have suffered through rising input costs and now Congress' decision to cut promised farm programs.

An 11-to-9 vote saw the Senate Committee on Agriculture, Nutrition and Forestry slash $3 billion from the agriculture budget over the next five years. For small-grain growers in the Northwest, that means a 2.5 percent reduction in farm program payments from 2006 to 2011. That includes Direct Payments, Countercyclical Payments and Marketing Loan Deficiency Payments.

Additionally, the portion of payments growers can receive as an advance declines from 50 percent to 40 percent in 2006 and to 29 percent in 2007 until 2011. Although they will be paid the remainder of the payment in the final direct payment, Sherman Reese, president of the National Association of Wheat Growers, said farmers had relied on the advance in their cash flow projections.

"The 2002 Farm Bill was a contract. Farmers relied on the government's word to keep its end of the deal, and these reductions and delays in payments have real dollars-and-cents impacts on our members," he said.

In an op-ed piece distributed before the Senate vote was taken, Reese argued that cutting farm programs would put "many thousands of acres of wheat and other commodities out of production" and potentially reap consequences "that will turn what is currently a crisis in agriculture into devastation in America's heartland from which we may never recover."

Although Reese understood Congress' need to find emergency spending cuts made necessary by hurricanes Katrina and Rita, he said, agriculture was also feeling the weather-driven effects and needed consideration.

"The hurricanes' disruption of energy production facilities in the Gulf have led to a dramatic spike in energy costs, which impacts farmers more than just about any other sector in the U.S. economy," he said. "Unlike other sectors of our economy, farmers cannot pass on fuel surcharges to their customers, and they end up absorbing everyone else's fuel surcharges."

Every Republican senator on the committee voted in favor of the $3 billion cut, including Mike Crapo of Idaho, Pat Roberts of Kansas, Richard Lugar of Indiana and Craig Thomas of Wyoming. Every Democratic senator on the committee, except Patrick Leahy of Vermont, voted against it, including Tom Harkin of Iowa, Kent Conrad of North Dakota, Max Baucus of Montana and Ken Salazar of Colorado.

The chairman of the committee, Saxby Chambliss, R-Georgia, said an ag disaster supplemental is awaiting the calculation of losses suffered by Southeast agriculture, ravaged in the past month by two hurricanes.

He promised that "in due time" a supplemental disaster package will be forthcoming.