Posted by: Phillip Fraas
February 05, 2007

On January 31, Secretary of Agriculture Mike Johanns released the Bush Administration's proposals for the 2007 farm bill. The package is very detailed--almost 200 pages long--and contains some provisions bound to generate controversy in Congress. What with its detail and its early release, the USDA plan is bound to steal the spotlight for the next few weeks, before alternative proposals begin surfacing from within Congress itself.

Like just about any farm proposal coming out of a Republican administration, it is tilted toward increasing the market orientation of the farm programs; and it appears to have been intended as well to send a signal to our trading partners that the Bush Administration is prepared to reduce U.S. trade-distorting agricultural subsidies. Further, it addresses some of the criticism leveled at the farm programs by a series of articles in the Washington Post in recent months (which have been chronicled in this blog). But for all that, and with just a few exceptions, it is a fairly middle-of-the-road proposal, certainly not as radical a departure from existing programs as the "freedom to farm" bill enacted by Congress in 1996.

The reaction to the USDA package so far has been muted. The EU has stated that the subsidy cuts are not amibitious enough; but I have not seen any comments from Congress or interested ag groups savaging it.

How much of what USDA proposes will Congress adopt? It is too early to tell, though it can be expected that members of Congress will embrace--and likely consider adding to--the USDA bioenergy and resource conservation proposals. For now, the USDA proposals will become the focus of farm bill discussions. The Senate Committee on Agriculture, Nutrition, and Forestry has already scheduled a hearing on them for Wednesday, February 7.

I will follow-up in a couple of days with more details on the USDA package, and discuss where the controversies are (advance hint: look at its payment limitation and price/income support mechanisms), what it will cost if enacted, who its winners and losers are, and so on. In the mean time, the President releases the Administration's fiscal year 2008 budget proposal today, which no doubt will incorporate the USDA farm bill assumptions. I will let you know if there are any surprises there as well.

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