On February 7, 2005 the Administration released its proposed Budget.  Below are the preliminary cuts that have been made to critical Energy Title programs authorized in the 2002 Farm Bill.  

• Section 9002: Federal Procurement of Biobased Products:

• Section 9004: Biodiesel Fuel Education Program:

• Section 9006: RBS Renewable and Energy Efficiency Grant/Loan Guarantee Program:

*$5 million for grants and $5 million for loan guarantees  

• Section 9008 NRCS Biomass Research and Development Program:

•  Section 9010 CCC Bioenergy Program:

Section 6401: RD Value-Added Agricultural Product Market Development Grants: 

The Administration’s Budget Request contains significant cuts across numerous programs, accomplishing an overall 2.1 percent decrease in discretionary spending.  The Dept. of Agriculture’s Budget Outlays saw a decrease from FY05, of $94.9 billion to $94.6 billion. Many of these cuts were made to discretionary spending, with levels falling from $22 billion to $19.4 billion.  The Commodity Credit Corporation will see a drop in net outlays, while the Federal Crop Insurance Corporation and Food and Nutrition Service Programs will see modest increases.  The Administration’s Food and Agriculture Defense Initiative received a $78 million increase in funding from FY05 levels, for a total of $376 million.  This initiative will increase support for efforts underway at the Food Safety and Inspection Service (FSIS), the Agricultural Research Service (ARS), and the Animal and Plant Health Inspection Service (APHIS).  

Significant cuts were made to the commodity programs, decreasing existing levels by $5 billion, from$33 billion in FY05 to $28 billion in FY06.  These reductions are meant to adhere to the Administration’s goal of providing alternate forms of financial support for the nation’s farmers in lieu of maintaining current agricultural subsidies.  The Administration intends to ensure “an economically sound future for American agriculture by providing a financial safety net for farmers…while promoting more efficient production decisions.”  Programs like the Conservation Reserve Program (CRP) and the Conservation Securities Program (CSP) experienced increased funding levels, in order to reward farmers’ environmental stewardship.  The CSP (administered by USDA’s Natural Resources Conservation Service, NRCS) received a 35 percent increase for a new funding level of $274 million in FY06 up from $202 million in FY05.  The CRP (administered by the Farm Service Agency) saw a modest increase in funding levels from $1.9 billion in FY05 to $2.02 billion in FY06.  The CRP was reauthorized by the 2002 Farm Bill to include funds for conservation land containing renewable energy projects.   

A similar program, also administered by NRCS, titled the Resource Conservation and Development Program was deemed by OMB to be redundant with existing conservation programs and therefore received a 50 percent reduction in funding levels (from $51 million to $26 million in FY06). The Environmental Quality Incentives Program (EQIP), a program administered by NRCS that provides assistance to landowners facing soil, water and related natural resources challenges, received modest cuts with a FY06 funding level of $1 billion (down from $1.017 billion).  EQIP is projected to support the conservation of 141.5 million acres in FY06 compared with 34.4 million acres to be enrolled under CRP.  Total acres enrolled in FY05 were 117.5 million acres under EQIP and 34.3 million acres under CRP.  

Now that the Administration has released its Budget Request, Congress will begin the process of reconciliation, with a tentative date of April 15 to reach consensus on a Budget Resolution.  A great deal of effort will be needed to protect and restore funding for many of these programs discussed, while keeping in mind the projected funding levels beyond FY06 may see even greater cuts.  

For more information regarding the 2002 Farm Bill Programs, please visit www.eesi.org or contact Alexandra Morel (amorel@eesi.org or 202.662.1885).  

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