When the 109th Congress convenes early next year members will face the onerous chore of dealing with a budget deficit measured in billions of dollars and, although a small percentage of the total government outlays, agriculture is in line to take some hits.

“Agriculture may be a target,” says John Maguire, vice president, Washington operations, National Cotton Council.

Maguire, addressing the NCC mid-year meeting recently in Asheville, N.C., said agriculture's share of the budget might come under scrutiny. And the recent adverse ruling by the World Trade Organization (WTO), which questions U.S. farm policy, especially in regard to cotton, may provide detractors more ammunition.

“But we believe we have a commitment from Congress that they will not put into the farm bill what goes on in Geneva (where WTO hearings are being held),” Maguire said.

He said the Step 2 cotton program also could be a target.

“And payment limitations could come back as some legislators assume that limits will affect only a few farmers. Certificate and market loan benefits also may be on the table,” Maguire said.

Other issues include export credit programs and specialty crops.

New specialty programs

“Specialty crop advocates (fruit and vegetable producers) want $5 billion in new programs,” Maguire said. “They will mount a strong effort for a five-year program.”

The problem with that, Maguire said, is that it means more money from an already limited source.

“But we want to see how we can cooperate with the specialty crop group and bring them in as part of the agriculture coalition instead of fighting among ourselves.”

Maguire said the Brazil case against the U.S. cotton program likely would be among the top cotton issues the 109th addresses.

“Also, U.S. membership in WTO is up for reconfirmation. That happens every five years.”

Fast-track trade promotion authority for the president also comes up for renewal and Maguire expects that it will be requested.

He said the 109th Congress likely would begin debate on the next farm bill.

“We'll face some challenges,” he said. “There is the perception that agriculture did very well in 2002. But, at that time, we had a budget surplus and the program has spent much less money than anticipated.”

Maguire said several bills pending in the 108th Congress also affect agriculture. Chief among these is appropriations legislation. Maguire said agricultural funding in the appropriations legislation would be below the 2004 level, which was less than 2003.

“That means two consecutive years with less money,” he said.

House proposal

He said a House proposal would keep funding for programs but reduce mandatory conservation funding by $450 million to pay for discretionary programs.

“We expect no farm bill amendments (in the House) other than the conservation cuts,” he said. He's less certain about the Senate but said one possibility is that the Senate would pass the House version and go straight to conference to avoid conflicts.

He said critical needs for cotton include funding for boll weevil and pink bollworm eradication efforts and earmarked research projects such as a gin laboratory at Clemson University.

“We will oppose all damaging amendments. We know Sen. Grassley is still around, so payment limitations remain a possibility.”

A transportation bill, energy bill, taxation, the tobacco buyout and trade legislation also vie for attention before the election.

Maguire said the House and Senate have passed energy bills but committees have not yet ironed out differences between the two. Maguire said renewable fuels could be part of that legislation.

Several trade agreements have been enacted and await either the president's signature or implementing legislation. Others are in various stages of debate or negotiation.

Maguire said trade pacts with Australia and Morocco have passed, as has extension of AGOA. CAFTA and an agreement with the Dominican Republic have been signed. “Implementing legislation is not ready yet,” Maguire said.

Haiti pact concern

He expressed concern that an agreement with Haiti could undermine the Caribbean Basin Initiative (CBI) by allowing Haiti to assemble and produce products from materials from anywhere and come in duty free.

He said an agreement with Bahrain awaits signatures.

“A number of free trade agreement negotiations are still going on, including the Andean, FTAA, SACU, Panama and Thailand.”

Maguire said the make-up of the 109th Congress and committees important to agriculture probably will change. He thinks the Republicans will maintain control of the House of Representatives but the Senate is in question.

“In the Senate, six vacancies exist in cotton belt states, North and South Carolina, Georgia, Florida, Louisiana and Oklahoma, and five of those have been held by Democrats.

e-mail: rsmith@primediabusiness.com