Here’s a summary of the spending reductions in the Agricultural Reconciliation Act of 2005 passed by the Senate Committee on Agriculture, Forestry and Nutrition:
- 2.5 percent for all payments producers receive for the 2006 through 2010 crop years for wheat, corn, grain sorghum, cotton, rice, soybeans, other oilseeds and peanuts. The secretary of agriculture will calculate the amount a producer is eligible to receive in direct payments, counter-cyclical payments, marketing loan gains and loan deficiency payments and reduce the amount by 2.5 percent. MILC payments will also be reduced by 2.5 percent. Total savings: $1.296 billion.
- A forfeiture penalty on nonrecourse sugar loans. The penalty will be equal to 1.2 percent of the applicable loan rate for sugarcane and sugar beets and applies to the 2006 through 2010 crop. Total savings: $65 million.
- A reduction in the amount of the advance direct payment a producer may request from 50 percent to 40 percent in 2006 and to 29 percent for each of the 2007 through 2011 crop years. The producer will continue to receive the full direct payment (minus the 2.5 percent annual reduction) because the amount not advanced will be paid in the final direct payment. Total savings: $1.088 billion.
- A reduction in the acreage cap for the Conservation Reserve Program from 39.2 million to 36.4 million acres through 2010. In 2011, the acreage cap will increase to 38.3 million acres. Current contracts would continue to be honored. Total savings: $129 million.
- A limit on Conservation Security Program expenditures to $1.945 billion for fiscal years 2006 through 2010. The plan increases the expenditure cap to $5.2 billion for fiscal years 2006 through 2015. Total savings: $821 million.
- A limit on Environmental Quality Incentives Program spending of $1.185 billion in fiscal year 2006 and $1.270 billion in each of the fiscal years 2007 through 2010. Total savings: $104 million.
- A limit on funding for the Initiative for Future Agriculture and Food Systems to $104 million in fiscal year 2006 and $130 million each for fiscal years 2007 through 2010. Total savings: $227 million.
The Congressional Budget Office scores the savings for terminating cotton’s Step 2 program on Aug. 1, 2006 at $282 million.