The National Association of Wheat Growers (NAWG) expressed thanks recently for the efforts of several Senate Agriculture Committee members on the budget reconciliation package that passed out of committee, but expressed dismay at the effects these cuts are likely to have in farm country.

"This fall, farmers are facing debilitating cost increases for fuel and fertilizer, and unlike other businesses, we can't pass on these costs in surcharges," said NAWG President Sherman Reese. "In fact, everybody else's fuel surcharges are passed on to us. We pay increased costs for the goods delivered to our farms, and fuel surcharges to get our products to market. Some of our members have had to pledge the cash value of their life insurance to obtain operating credit for seeding their crop; their bankers can literally pursue them to the grave. Others are facing expensive quality or production losses from weather problems and plant diseases. So this is not a good time to cut back what safety net we do have."

"The 2002 farm bill was a contract," he continued. "Farmers relied on the government's word to keep its end of the deal, and these reductions and delays in payments will have real dollars and cents impacts on our members. Waiting for the remainder of an advance payment that was already budgeted will drive up interest costs, when farmers had planned on those funds in their cash flow projections. These impacts also go way beyond just farmers, but upon that part of middle America in rural communities that depend on a healthy farming economy to stay in business."

"Fuel and fertilizer prices are ending some farming careers this year," he said. "And cuts to the safety net will make it that much worse."

While disheartened by the proposed cuts, NAWG also expressed thanks to several Senators who worked to keep the reductions as small as possible.

"We appreciate the efforts of Chairman Saxby Chambliss, who was placed in a very difficult position by competing interests, but who was ultimately able to navigate a compromise proposal through the process. In addition, we want to recognize the efforts of Senators Pat Roberts, Mike Crapo, Craig Thomas, Max Baucus, Ken Salazar and Richard Lugar, who worked diligently to keep the size of the package at $3 billion in cuts," said Reese.

The proposal approved by the Senate Agriculture, Nutrition and Forestry Committee makes the following cuts in agricultural programs:

--A 2.5% reduction in all farm program payments, including Direct Payments, Countercyclical Payments, and Marketing Loan Deficiency Payments, for the 2006-2011 crop years.

--Institutes a forfeiture penalty on nonrecourse sugar loans, equal to 1.2% of the applicable loan rate.

--Eliminates the Step-2 program for cotton in August 2006.

--Extends the Milk Income Loss Contract (MILC) program, through Sept. 30, 2007, reducing the payment factor from 45 percent to 34 percent.

--Reduces the amount a producer can receive in an advance direct payment from 50% to 40% for 2006, and to 29% for the 2007-2011 crop years. The remainder will be paid in the final direct payment, so the changes effectively delays receipt of the advance.

--Reduces the acreage cap on the Conservation Reserve Program (CRP) to 36.4 million acres.

--Limits expenditures on the Conservation Security Program (CSP) to $1.954 billion for the years 2006-2010.

--Limits expenditures on the Environmental Quality Incentives Program (EQIP) to $1.185 billion in fiscal year 2006 and $1.270 billion in each of fiscal years 2007 through 2010.

--Limits funding for the Initiative for Future Agriculture Systems (IFAFS) to $104 million in fiscal year 2006 and $130 million for each of fiscal years 2007 through 2010.

NAWG was founded in 1950 to provide one strong voice for Wheat growers nationwide. Partnering with 21 state associations in Wheat growing states, NAWG represents Wheat grower interests in the nation's capitol, where it delivers its message on farm policy, foreign trade policy and environmental issues. NAWG also works with agri business to promote research and development of promising new technologies to benefit Wheat producers and consumers. And, in conjunction with the State Wheat Associations, NAWG offers educational programs that provide growers with the techniques and skills needed to compete in today's global marketplace.