Budget Proposed

USDA Secretary Mike Johanns said President George W. Bush's passion about reducing with the national deficit is reflected in the proposed USDA budget, released earlier this week. "The President's agriculture budget is fiscally responsible, ensures a strong safety net for farmers and ranchers and increases resources to help those in need," Johanns said. "The agriculture budget provides funds to protect America's food supply and agriculture systems, improve nutrition and health, conserve and enhance our natural resources and enhance economic opportunities for agricultural producers."

Total USDA outlays increased from about $72 billion in 2004 to $94.9 billion in 2005 and are projected to remain at roughly that level in 2006 at $94.6 billion. The increase from 2004 to 2005 is largely due to higher Commodity Credit Corporation (CCC) outlays for commodity programs (+$13 billion) and domestic nutrition assistance (+$7 billion).

Johanns emphasized that nearly every USDA department and agency was going to feel the pinch of a smaller budget. “If this budget sends a signal about anything it's that everybody is going to be a part of this deficit-reducing) initiative,” he said. "There's no smoke and mirrors in these proposals because in my judgment budgets aren't magic; they are math.”

"Farmers and ranchers obviously know the importance of a healthy economy,” he continued. “It raises incomes, and it increases the demand for the products that they produce. Like every agency, USDA will share the government-wide burden of controlling federal spending. At the same time, we must work hard to leverage other tools to maintain the strong farm economy-- such as an aggressive trade agenda.”

He pointed out: "I've had the experience as governor of Nebraska to present budgets during times of restraint. I will assure you, it is never easy, but it is necessary; and I fully support these proposals.”

Several budget items will likely affect the meat processing industry either directly or indirectly: * Domestic Nutrition Assistance Participation and Funding: Participation levels in the Department's three major nutrition assistance programs - Women, Infants and Children (WIC), Food Stamps and School Lunch - show continued increases from 2004 to 2006. The budget fully funds the expected requirements for these programs. WIC participation continues to grow to new record levels, with an increase of more than 3 percent above the 2005 estimate to a projected 8.5 million participants. The budget proposes $5.6 billion to support this level and includes a $125 million contingency fund, should costs increase beyond current estimates. Food Stamp participation increases about 10 percent each year, on top of a 12 percent increase in 2004 over the actual 2003 level. The budget includes resources to fully fund estimated Food Stamp participation and also provides a $3 billion contingency fund should actual costs exceed the estimated level. School Lunch participation is estimated to reach 29.8 million children each day.

USDA programs also continue to help feed those in need around the world. The President's budget proposes $100 million for the McGovern-Dole International Food for Education and Child Nutrition Program, an increase of 15 percent over 2005. This funding level will support nutrition assistance for 2.6 million women and children, up from 2.2 million in 2005.

* Food and Agriculture Defense Initiative: The budget proposes $376 million in USDA funding for the multi-agency Food and Agriculture Defense Initiative, which is funded at nearly $600 million government-wide. This initiative began in 2004. Under USDA's contribution, the budget proposes $317 million for programs, and $59 million to complete construction of the National Centers for Animal Health in Ames, Iowa. Funding for programs reflects a $140 million increase above 2005, including: $37 million in increases to strengthen the Food Emergency Response Network and the Regional Diagnostic Network to ensure the capacity to respond quickly to food emergencies and plant and animal diseases; $35 million in increases for research to develop the means to quickly identify pathogens, develop improved vaccines and better understand the genes that provide disease resistance; and $51 million in funds to enhance surveillance and monitoring activities to quickly detect pest and disease threats.

* Bovine Spongiform Encephalopathy Activities: After the discovery Dec. 23, 2003, of a single cow with BSE in the United States, a one-time, enhanced BSE surveillance program was implemented, beginning in June 2004. Funds were also provided in 2004 to begin to implement a National Animal Identification System. The 2006 budget proposes funding for continued testing and implementation of the National Animal Identification System.

In addition, the budget provides an increase of $7.5 million for an enhanced BSE research program. The additional research funding is directed to increasing our scientific understanding of the disease and developing the technology needed by regulatory agencies to establish science-based policies and control programs.