Bush Proposes Milk Tax - Dairy Herd Manangement 02/06/06

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Bush proposes milk tax

By Dairy Herd news source (Monday, February 06, 2006)

 

On Monday President Bush released his Fiscal Year 2007 budget proposal

for USDA. And while he does call for increased spending for biosecurity

projects and for the fight against Avian Bird Flu, most farm programs

take a hit.

 

In addition dairy producers and sugar processors are being asked to pay

an assessment or tax. For dairy it amounts to a 3-cent per hundredweight

tax on all milk produced. For an average size dairy of 120 cows that

translates into a cost of about $720 per year, for an estimated savings

of $578 million over ten years. The proposal also calls for a 5 percent

reduction in spending on all farm payment programs including dairy and

requires the dairy-price support program to minimize expenditures.

 

Listed out below are details of some of the budget highlights. New

spending priorities include:

 

*

$322 million for protecting America's agriculture and food supply

by improving USDA's ability to detect, respond to and recover from

incidents of diseases, pests or poisonous agents.

*

$82 million to continue activities related to avian influenza

preparations and prevention, including surveillance of wild and

domesticated birds.

*

Provides full funding for the Northwest Forest Plan allowing for

800 million board feet of lumber to be harvested from Forest

Service land.

*

Provides funding to enroll 250,000 acres in the Wetlands Reserve

Program to meet the President's commitment to create, improve and

protect at least three million

wetland acres by 2009.

*

Continues Forest Service reforms that will result in a savings of

more than $115 million over three years.

*

Targets Conservation Reserve Program funding to activities that

will have the highest chance of improving conservation.

*

Proposes to exclude all retirement savings when determining if a

household is eligible for food stamps to make it easier for

low-income people to save for retirement and get food stamps if

they need them.

 

Now for the spending cuts.

 

The list below details the cuts proposed by President Bush to help

restrain spending in USDA's FY 2007 budget:

 

*

Reduce all crop payments to producers by 5 percent. Payments to

producers from all commodity programs (marketing loans, direct and

counter-cyclical payments, and the Milk Income Loss Contract

program) would be calculated, and payments would be reduced, by

five percent. (Savings = $4.9 billion over 10 years.)

*

Initiate a dairy assessment to be paid by dairy producers. An

assessment of 3 cents per hundredweight of milk produced would be

paid by all producers on all of their production. (Savings = $578

million over 10 years.)

*

Require USDA to achieve effective dairy price supports at the

least possible cost to the taxpayer. Change the law to require

dairy product prices set by USDA to minimize cost, and allow

purchases only when reported prices are below the support rate.

This would change milk product price ratios to reduce Government

purchases and save on storage costs. (Savings = $618 million over

10 years.)

*

Initiate a sugar marketing assessment to be paid by sugar

processors on all processed sugar. An assessment of 1.2 percent of

the raw sugar loan rate would be paid by processors for sugar from

both cane and beets. (Savings = $364 million over 10 years.)

*

Reduce the payment limit cap for individuals to $250,000 for all

commodity payments, including all types of marketing loan gains

while removing the three-entity-rule and making marketing loans

recourse above the payment limit. (Savings = $1.2 billion over 10

years.)

*

Reduce crop insurance premium subsidies for farmers and lower the

amount paid to reimburse insurance companies for administrative

costs. Require all producers receiving direct crop payments to

purchase crop insurance. This is expected to eliminate the need

for ad hoc disaster assistance. (Savings = $1.26 billion over 10

years.)

 

/USDA,/ /Illinois/ /Farm Bureau, Channel3000.com/

 

/Editor's note: You also can find additional information regarding the

FY 2007 budget proposal on the USDA Web site at:/

/http://www.usda.gov/wps/portal/usdahome?navid=BUDGET//./

 

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