Cotton and agriculture face serious challenges as the 112th Congress looks to trim budgets and farm interests compete for a piece of a smaller pie. A lot of newcomers on key committees, especially the House Agriculture Committee, could make the chore even more challenging.

The budget will be the key, said John Maguire, National Cotton Council senior vice president for Washington operations.

“Preserving the budget baseline for the 2010 farm bill will be an issue” for both the House and Senate agriculture committees, Maguire said during the opening session of the Beltwide Cotton Conferences in Atlanta.

Both Houses have new leadership. Rep. Frank Lucas, R-Okla., is chairman of the House Agriculture Committee following Republican gains in November elections. Debbie Stabenow, D-Mich., is Senate Agriculture Committee chair, taking over from Blanche Lincoln, who was defeated.

Agriculture lost a lot of rural, conservative, Blue Dog Democrats, Maguire said. “Of 28 Democrat members (of the House Agriculture Committee) from the 111th Congress, 16 were defeated. And six of the remaining members have cotton. Of the 25 Republicans on the House Agriculture Committee, 16 are freshmen and 10 have cotton.”

Maguire said the House Republican agenda will focus on the budget deficit, banning earmarks, regulatory review and trade. Possible cuts to agriculture programs include a $10 billion reduction from direct payments, conservation and export enhancement programs. “Budget reconciliation may require adjustments to current law,” he said.

On the plus side for agriculture, farm programs account for less than 1 percent of the total federal budget. “Agriculture has contributed $4 billion to deficit reduction and current farm bill costs are well below projections and are declining.”

A target for House Republicans, Maguire said, is to reduce discretionary spending by 21 percent. Defense, homeland security and veterans programs are the only programs exempt. “New House rules will require a constitutional basis for all legislation, no earmarks and Paygo (all spending increases must be offset). A separate vote will be required to raise the debt limit.”

Regulatory review will include EPA. Also on the agenda are financial market reform and food safety implementation.